The Bard may have discounted the import of a name with his famous quote “What’s in a name? That which we call a rose by any other word would smell as sweet.” But businesses that chose to live that aphorism died more often than not. Examples are the (in)famous “Nova” for GM in Latin America which translates loosely as “does not move” and “Allegis”, a mix of hotels (Westin), airline (United) and car rental (Hertz). However, the surging hotel market has spurred a shakeup in hotel ownership with the big names choosing to rid themselves of property while attempting to burnish their brands.
The real property lite strategy has resulted in the new (and disparate) owners changing brands and names. The Wall Street Journal wrote about its effects on the consumer. Despite years of franchising in a range of industries from fast food to mufflers to hotels, a surprisingly large number of end-user customers are unaware that the moniker is just that – a mere shingle, albeit in many instances with strict standards, that belongs to some corporate office in a distant city or even country. Unfortunately, that results in differing outcomes even in high end hotels like the Ritz-Carlton, as the article in the Journal notes. A customer at the high end chain was surprised to find a $12 fee for the hotel gym on top of a $600 room rate. While the idea of fees for just about every service ought to be a topic for debate, that standards can vary is not something any chain can afford. The trend though is percolating down the hotel spectrum with Accor announcing an asset sale of its Red Roof Inn brand while keeping management and franchise control. While financially it is entirely the right move for Accor, it is bound to have an impact on standards besides causing a loss of control as owners, like in other brands, may want to change brands at the expiry of franchise terms.