The global brand race

A few weeks ago Interbrand, the world's leading brand consultancy came up with their annual list of top 100 brands. American brands made up a spectacular 50% of the list with an even more impressive 17 of the top 25 spots occupied by US brands. Non US brands may carp sotto-voce (for fear of being excluded the next time around) that the process is rigged in favor of US brands but the popularity of the consultancy's totem pole is best gaged by the fact that most brands aspire deeply to be in the ranking. The company has an undisclosed proprietary technology that analyzes "the many ways a brand touches and benefits an organization, from attracting top talent to delivering on customer expectation."

While US companies from Coca Cola to Intel grabbed the top 7 spots sadly, there was not a single hospitality company, US or otherwise, in the coveted list. Several restaurant companies (all American) did make the list with McDonalds leading at  number 6 followed by KFC at 60, PizzaHut at 83 and Starbucks a distant but still creditable 97.

Interbrand states that it uses three broad criteria to determine brand excellence. These are Financial Performance, arguably a negative for hotels during the downturn; the Role of the Brand described as measures the portion of the decision to purchase that is attributable to brand and Brand Strength which "measures the ability of the brand to secure the delivery of expected future earnings".

Nevertheless, the absence of US hotel brands in the list is both a disappointment and a mystery given the dominant role played by the big players in the US and the considerable verstaility and flair shown by the launch of several lifestyle products such as Andaz and Edition hotels that appear to have resonated well with guests.

One contributing factor could be a lack of geographical reach, particularly in some key markets like Europe and South America. For instance,  Otus & Company, a UK based hotel consultancy's compilation of top ten brands in Europe has only one US brand, Hilton Hotels with a paltry 8% of the total room supply of the top ten. The biggies are attempting to fill the gap in South America with both Marriott and Hilton announcing scores of new projects.

Another reason for hotel brands likely fell short is declining ad-spend during the recession. Overall ad-spending is on the rebound as this report in the Financial Times about the advertising giant, Publicis Groupe, indicates. But as the company's CEO notes "“In this world of competition, if clients want to protect their brands, they have to invest more (in ads).” While there is a strong self-serving element to that statement, it nevertheless is sage advice that hotel brands will do well to heed.

Published by

Vijay Dandapani

Co-founder and president of a New York based hotel company for 24 years. Grew the firm to five hotels in Manhattan and also developed a greenfield project at MacArthur airport, New York. Speaker at numerous prestigious forums including Economy Hotels World Asia, Lodging Conference, NYU, Columbia University Real Estate Roundtable, Baruch College's Zicklin School and ALIS. President and ceo of New York City Hotel Association since January 2017.

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