Hilton Cartagena

Top 10 most valuable and most powerful hotel brands of 2017

The leading valuation and strategy consultancy Brand Finance values the brands of thousands of the world’s biggest companies. Brand Finance announced the world’s 50 most valuable hotel brands.

Brands are first evaluated to determine their power / strength (based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation) and given a corresponding letter grade up to AAA+. Brand strength is used to determine what proportion of a business’s revenue is contributed by the brand, which is projected into perpetuity to determine the brand’s value.

Five of the top ten most valuable brands have lost value and the industry’s year to year average brand value growth rate (4%) is significantly below the average for all sectors. There are notable exceptions however, with reasons for optimism for several brands. Hilton is the world’s most valuable hotel brand with a brand value of US$8.4 billion, up 7% on 2016.

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To maintain the brand’s visibility in the face of changing technology, Hilton has recently agreed to allow Tripadvisor users to not only view Hilton accommodation and check prices, but also to book directly through the site. Though this may mean some loss of control, it is a sensible concession in order to maintain high brand strength scores on metrics such as consideration and familiarity and as consumers come to expect a frictionless experience, it could prove essential to maintaining revenues.

Despite the challenging environment, a major growth opportunity remains in Asia. Chinese demand for business travel in particular at both a domestic and international level will continue to grow. From a brand perspective, this is particularly useful for Hilton and other major hotel brands.

Brand Finance research indicates that China’s consumers demonstrate a much greater affinity with major brands than is increasingly the case in the west, making them particularly useful in reducing the impact of competition from smaller brands or homestays. A first mover advantage in China itself could prove very fruitful in building awareness to support Hilton’s operations in the rest of the world as China’s increasingly affluent tourists venture further afield.

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Accor has clearly recognised this trend and is moving rapidly to capture luxury market share in China. It has now opened over 200 locations in greater China. 28 of these are under its Pullman brand, which added two new locations in Shanghai and Tangshan in 2016.

This is helping to drive the rapid brand value growth of Pullman. Having added 31% this year to a total of US$323 million, Pullman is this year’s fastest growing hotel brand. A Pullman brand was opened in San Francisco in 2016. This is only the second Pullman location in the US. With the world’s two largest economies still relatively underexploited, Pullman’s continued brand value growth looks likely.

The 10 Most Powerful Hotel Brands

brand finance top10most powerful hotel brandsAccording to Brand Finance’s Brand Strength Index (BSI), the world’s strongest hotel brand is Premier Inn. The mass-market, UK-focused brand’s top billing may come as a surprise to some; however Premier Inn lives up to its name across a broad range of brand metrics.

Premier Inn was the first mass market UK hotel brand to be advertised on prime time television following its creation in 2007 and has commissioned high quality, effective advertising (using comedian Sir Lenny Henry) ever since. Campaigns have mainly focused on functional drivers such as convenience or price, using slogans such as ‘Everything’s Premier but the price’.

Recent ads focus on Premier Inn’s role in helping friends and family keep in touch, including the Wes Anderson inspired ‘Aunt Mabel’s Birthday’.

This has enabled Premier Inn to score highly on a wide range on metrics on Brand Finance’s Brand Strength Index from marketing investment to familiarity and consideration. Luxury brands may be notionally more desirable, but they are not as widely known as Premier Inn, whose value for money supports higher scores for preference and satisfaction as well. Premier Inn’s financial performance is correspondingly strong, with total sales up 12.9% and like for like sales up 4.2% in their financial year 2015/16, supporting a 11.9% pre-tax profit increase for Whitbread (Premier Inn’s owner).

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