For hotel companies like Hilton and Marriott one of the fastest ways to growth is winning owners of existing hotels to take on their brand and standards—and living up to those standards comes with costs.
Recently, that’s turned attention to ways in which the chains can make affiliation more attractive to owners, and aside from beefing up advertising and other services that build traffic for owners, one of the main ways is to offer reduced costs.
Marriott’s CEO told financial analysts earlier this month that “We’re looking at efficiencies and savings that we think will have clear benefits to the owners. We’re looking at every facet of our engagement with them, and we expect to have some tangible saving opportunities identified for them in the very near future.”
Those cost cuts are not all new: hotel guests will have already noticed some. At the start of the pandemic, for instance, daily housekeeping ended, and has not been fully restored in many hotels. Full-scale hotel restaurants have become less common, or rely on limited quick-cook menus; breakfast buffets feature fewer choices and less hot food. And, for many hotels, alarm clocks and phone systems have disappeared in the world of smartphones.
Another strategy is to develop less-costly brands for a dollar-cautious audience; all the major chains operated brands at different levels, and for some owners the solution may be to switch branding within the same group. Hilton’s new Spark brand and Marriott’s expansion of its Mexico-based Express brand are examples of those options.
