ey-global-hospitality-insights-2015

Critical success factors for new lodging brandsThe global lodging industry hasexperienced strong growth overthe past 12 months, laying thegroundwork for an emerging trendof launching new hotel brandsworldwide.The competitive environment for new hotelbrands may be better than ever thanks totechnology integration within the industry,which has leveled the playing field. Newentrants now coexist with long-establishedglobal players in an online world oftransparent pricing, social media marketingand digital reputations.Alongside this paradigm shift in technology,hoteliers are developing brands thatcater to a new set of demographic andpsychographic customer profiles. Millennialtravelers — those born roughly between1980 and 2000 — and older affluent butyoung-minded travelers are the primarytargets of today’s brand developers. Thesetravelers seek experiential products andbrands that reflect their personal values.Accordingly, new brands from established ornewly formed companies are departing fromthe “home away from home” philosophyof hospitality, favoring hotels that featuresmaller guestrooms emphasizing functionaldesign, public spaces designed to stimulatesocial interaction, amenities and offeringsthat promote wholesome and healthylifestyles, enhanced technology throughoutproperties, the integration of local culturalelements into the guest experience, andaffordable luxury design and service levels.Across the globe, newly launched brands aretargeting market opportunities at differentchain scales. In North America and Europe,most are seeking to capture travelers at themiddle to upper price tiers.You can see a similar trend toward themiddle price tier in the Middle East. Luxurybrands have traditionally dominatedthe hotel landscape in Dubai; however,as Dubai’s government has waived themunicipality fee on each room night forthree- and four-star hotel developments,market participants have now beenincentivized to introduce brands withinlower to middle price tiers and focus ondeveloping lifestyle lodging offerings.Across Asia, development of new brandshas been most prominent in China, wherethey have the opportunity to build long-termbrand equity in a market with little existingbrand loyalty. New brand development isprominent across all price tiers but is slightlymore concentrated in the upper level.As more lodging products are launchedin today’s competitive global market,new contenders must understand themost important aspects for developing,successfully launching and positioningGlobal hospitality insights16