The Proliferation of Lifestyle Brands: Differentiate or Die

By Piers Schmidt

From our analysis of the profile, positioning, and promotion of 81 lifestyle hotel brands in conjunction with their dates of introduction emerges a series of fascinating correlations.

Opinion Piece

In his post, ‘More hotel brands – really?’, HOTELS blogger and hospitality consultant Daniel Lesser expresses his disappointment over the proliferation of new, mainly soft hotel brands that appear to be satisfying the chains’ need for growth.

There is no doubt that the sector is overly segmented. However, we need to recognise that the rapid expansion of hotels over the past 10 years has been driven by the so-called lifestyle category.

What is even more significant than the sheer number of these new and more accessible brands driven by younger, tech-savvy millennials, is that very little differentiates them. Somewhat distinguishable from their legacy siblings, they are almost identical to one another.

We’ve been analysing the profile, positioning and promotion of 81 such brands in conjunction with their dates of introduction.

A series of correlations have emerged.

If we look at the taglines employed by lifestyle brands, a lack of differentiation becomes apparent. A significant proportion of the slogans employ similar sound bites such as “designed for the modern traveller” (Vivanta by Taj), “hotels designed for the modern traveller” (Nylo Hotels), “created for a new generation of travellers” (Freehand Hotels) and “unique hotels for unique travellers” (Hyatt Centric).

Whether to emulate or obscure the propositions of their competitors, these conglomerates have failed to carve out a distinct identity, an omission that becomes apparent when you observe their properties. Here, you are surrounded by a largely derivative set of what we term “spray-on” concepts: hotels that appear different superficially but are essentially the same beneath the surface.

Where presentation and design may differ, the core ingredients remain the same:

  • Designs that reflect the unique community and culture of the area.
  • An all-tech approach.
  • A high-energy social environment.
  • Amenities that cater to Gen Y’s desire for healthy, authentic experiences.

Despite pleads for an end to “the introduction of confusing new hotel brands” and calls for the industry to focus instead on “bolstering and reinforcing existing ones”, the burgeoning of new players in the industry does not seem to be abating.

As of June 2017, there were more than 100 lifestyle brands, a number that has grown dramatically over the last 10 years. The chart below plots the upward trajectory of 81 brands that we studied. There is little indication of a plateau being reached.

This chart also demonstrates the clear correlation between the growth in millennial spending power and the proliferation of lifestyle brands. The first-born millennials turned 25 in 2005 and their disposable income and corporate budgets have increased to a point where they are able to graduate into a viable customer segment. With over 92 million people in this generation in the U.S. alone, their combined spending power will only continue to increase.

Consequently, lifestyle brands are likely to significantly scale their portfolios. The examples depicted above have 1,293 properties open and between them project a pipeline of 842 hotels, resulting in an expected expansion of 65% in this category alone.

Although these hotel brands are currently on the rise numerically, there will come a point when the ‘unique’ promise, look, feel and experience they offer becomes generic and bland. Not dissimilar to the regulation Sherations, Hyatts and Hiltons they were designed to supersede.

To prevent their imminent demise, all new players in the market need to work harder to cultivate genuine points of differentiation between them and not just the legacy brands they are replacing.

One way to accomplish this would be to focus on purpose. Why should a guest choose you rather than one of the other 80 competitor brands? What can you do for them that no one else can? Simply being Instagrammable is not a sustainable purpose. It never has been and never will.

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Luxury Branding is a strategic advisor specialising in generating sustainable brand value. Its principal experience is in the ultra-competitive premium segments of the tourism, travel, hospitality and residential real estate sectors.

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Piers Schmidt and Ian R Douglas of Phoenix Global are the co-founders of Kingham Leigh. This dynamic new partnership has been created to design, develop and operate innovative hospitality projects in Europe and beyond.

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