Real estate’s accelerating stride has called for efficient, disruptive solutions across industries. The projection has changed the silhouette of lodging industry in the shape of dual- and triple-brand hotels that not only efficiently utilize terra firma but a number of other resources as well.
We know there’s a lot going on behind the scenes. A corporate vice president, a general manager, and a hotel design firm principal, together spill the beans to hT on what it takes to conceptualize, manage, and profitably sustain a dual-branded property.
Karl Oates, vice president of lifestyle hotels for McKibbon Hospitality lays foundation.
What are the initial steps in the process of dual-branding a property?
Initial steps in the dual-branding process include conducting a market survey to determine which brands make the most sense as well as considering overall market health, cost per key to build, and the ability to design the two brands to complement each other. McKibbon’s vice president of business development [then] does the initial search for potential sites, and then the vice president of finance moves ahead with the approval of our chairman and board of directors.
How are brands selected and paired for a dual-branded project?
Market needs for models such as extended stay, legacy brand, or lifestyle brand are taken into account as well as whether the hotels can be run by one general manager and the overall expense to run them. Brands need to complement each other and not necessarily be seen as opposing brands
How is the competition balanced between the brands?
By selecting complementary brands, each hotel would traditionally have their own demographic of guests, but the sales team still has to focus on bringing the right type of business into each hotel. So, an emphasis on a well-trained and savvy sales team is critical to the success of a dual-branded property.
How are finances divided?
For us, the hotels fall under one entity but have separate P&L statements that are rolled up into one. Shared services for the hotels are divided as a percentage of sales.
What resources are shared or interchangeable?
The sales team, general manager, director of hotel services, housekeeping manager, laundry attendants, and housekeepers can be interchangeable as needed.
With growing value of real estate in urban settings, dual- and even triple-branded hotels are going up the charts. hT dissects the whats and the hows of the matter at hand and beyond.
How is F&B division maintained?
We’ve found that it’s best to keep the core food and beverage operations between the two hotel flags separate for the most part. However, there are certain opportunities to share resources such as kitchen space and staff. Due to their size and foot traffic, dual-branded hotels also offer a great opportunity to bring in an independent food and beverage offering such as a rooftop bar or restaurant.
What are the benefits of dual-branded properties over traditional ones and why should hotel owners, managers, and guests be interested in such hotels?
Revenue and cost savings are the biggest benefit. Beyond this, the number of rooms and ability to share resources between the two brands is important. Dual-branding also allows hoteliers to cater to various groups within a single site, such as leisure, business, and extended-stay travelers.
How do hotel industry giants such as Marriott, Hilton, Hyatt, and IHG approach the concept of dual-branding?
They look at dual-branding as a positive opportunity to grow their brands in markets that have limited prime real estate. They also see the positive impact dual-branding has on the typical guest of each brand—the guest gets to experience the best of two brands and broaden their travel experience.
How has the Marriott + Starwood merger impacted the game?
The merger has opened the door to bring more options into various markets, especially those already saturated with Marriott brands. This gives developers another brand option that would not have been available in the past if sticking exclusively with Marriott branded hotels. It also opens the door to some attractive lifestyle brands to add to Marriott’s growing lifestyle collection of hotels.
Any dual-brand projects in McKibbon’s pipeline?
We are currently working on AC Hotel and Residence Inn Charlotte City Center, a 22-story tower that together will add 300 rooms to Uptown Charlotte’s hotel inventory. The project will also include an independent rooftop bar, a super suite available for rent, meeting space, and retail space for lease on the first level. It is a great development success story as it sits atop the bustling EpiCentre in Charlotte, where unfinished steel rebar and concrete were exposed for years due to a condo tower project that fell through. This exciting project will open in July 2018 and have a significant impact on the continued growth and development of Charlotte.
What are your projections for n-brand hotel market?
As land becomes more scarce in complex urban locations, these projects will continue to become more popularity, especially as operators effectively master the ability to run dual-branded properties efficiently and successfully.
Blair Hildahl, principal at Base-4, addresses the design aspect.
Speaking design-wise, are there any specific approach methods?
Generally, dual-brand hotels are designed using a linked or blended model.
In linked model, two hotels are in one building with standalone entrances and lobbies. Back-of-house (BOH) and amenity spaces are typically the only items shared between the two hotels.
Whereas in blended model, there is one common entrance for both hotels in the same building. In addition to BOH and amenity spaces, front-of-house (FOH) spaces such as lobbies and breakfast areas can also be shared.
Great benefits usually come with some challenges. Is that the case here also?
Convoluted brand identity can be quite challenging. Having two different hotels in the same location, but offering different services at different nightly rates (especially when one flag offers a free breakfast and another doesn’t) can be an area of confusion and frustration for guests. On the operations side, hotel staff are typically a shared entity. This introduces some challenges as staff must learn two different levels of service and deliver this based on the flag they are servicing at that time.
Moreover, franchises require regular upgrades and developers may find it difficult to coordinate these between two brands, which are likely on two different maintenance schedules; this can result in conflicts in shared areas of the hotel that overlap.
AC Hotel and Residence Inn Charlotte City Center will bring 300 rooms to Uptown Charlotte.Image courtesy of McKibbon Hospitality
How brands such as Marriott, Hilton, IHG, and Hyatt approach dual branding?
Hotel developers always want to be as efficient as possible and push the envelope on the ‘shared-spaces’ of a dual branded property. Sharing spaces allows them to increase the key density and reduce construction costs which improves the feasibility of a new development. For a period of time, we were seeing more brand approval with blended concepts like this. However, with the ever-growing number of brands out there today, this seems to be changing as part of a brand effort to better maintain the identity of each flag which can often become cloudy in a blended concept. This means more of a trend towards a linked concept where the hallmark elements and DNA of each brand are maintained, while back-of-house and amenity spaces are still shared to allow for some efficiencies in construction.
Aloft Austin Downtown/Element Austin Downtown Image courtesy of White Lodging
we have gone nontraditional and have added some really neat chalkboard and locally spray painted signs, but signage to help direct guests is a must.
What’s your projection on dual- and triple-branded hotel segment?
There are many benefits to dual branding including a diversified guest profile, reduced operational overhead, maximized density and reduced construction cost. These benefits will continue to drive hotel developers to explore dual and triple branding opportunities when market conditions support it.
David Meisner, general manager of Aloft Austin Downtown/Element Austin Downtown paints a picture of on-site happenings at a dual brand hotel.
How is managing a dual-branded property different from managing a traditional hotel?
The biggest difference is ensuring you stay true to what each brand stands for and providing an experience to the guest that is not cannibalized by the other brand. Each brand has its own unique identity, and it’s important to ensure that the identity stays intact while still providing the guest the opportunity to experience what the other brand has to offer, all under one roof.
What about the operations and F&B?
The operations are the absolute best part of leading a dual-branded property. We have one team, with one vision that has the opportunity to lead two hotels and serve two unique guest types. Through leading two operations with one team we are able to leverage this into great productivity and effectiveness through many shared services as well as provided our team the unique opportunity to play a role in pulling through two really unique experiences. It is fun, challenging and extremely rewarding. From an F&B side, we are extremely fortunate to have three amazing concepts at this property in Caroline, The Coffeehouse at Caroline and Upstairs at Caroline that each play a huge role in offering our guests a great, authentic and locally relevant F&B experience without having to leave the hotel. These concepts are also concepts that a guest can only experience with us, a great feature for our team to sing loudly about and to help in selling our hotel and growing awareness through public relations and social media strategies.
What are some benefits of a dual-branded property to hotel stakeholders such as management, staff, owner, and customer?
There are a ton of benefits. First, we get to leverage two brands, two distribution channels and two unique offerings to provide an option to a variety of different guests traveling for different reasons. This allows us to better fill our hotels and be creative with how we drive traffic in our four walls. Second, the customer gets to experience something they never thought they would, as they get all the benefits of two brands with great F&B offerings under one roof, it is a win-win. Third, the staff loves the opportunity to develop their skills and talents across two brands at the same time. There is never a dull movement and is always an opportunity to learn and grow.
How do distinct design standards of the brands coexist in the shared spaces?
We are fortunate that our brands’ public spaces are separated by floors, which gives us a unique opportunity to hold true to the brand identity while giving our guests the opportunity to go from one floor to the other to experience the other side. During the design and construction phase, we did look for ways to incorporate subtle touches and finishes from each brand into the other to ensure there is a natural flow rather than a stark difference.
How do brands balance competition and maintain an independent, profitable stand?
Oddly enough, although the brands compete—as any two brands would—having them under the same roof with the same property management system, the same team, and the same ownership actually allows us to leverage each hotel to help fill the other. Depending on what is happening in the market the demand cycle changes which tends to benefit one over the other, we are able to capitalize on that demand by overselling one hotel and upgrading to the other to ensure we constantly optimize and maximize both hotels. We are also able to sell both brands as a single contract to groups and corporate accounts as unique offerings that fit different guest needs, but still as a single contract.
Have you noticed any signs of confusion at your guests’ end?
It can be a bit puzzling for some guests as it is not the norm for all hotels, but this really gives our team the opportunity to engage and interact with our guests. It allows our team to make a difference and connection with our guests through our ability to speak to the offerings, the differences in the hotels and encourage our guests to experience everything we have to offer.
Is there anything you might like to add?
Wayfinding! In a dual property, great signage is key. We have gone nontraditional and have added some really neat chalkboard and locally spray painted signs, but signage to help direct guests is a must.
By Najook Pandya