Oct292010

The Lure for Hotels of US-based Resort Branding

Redeem 40,000 Priority Club points for a free night at the Venetian or the Palazzo in Las Vegas. Or maybe 40,000 points for the new Marriott Autograph Collection hotel like the Algonquin New York or o 35,000 points for the Marriott Rewards category-7 Cosmopolitan Hotel Las Vegas.  The Planet Hollywood Las Vegas used to be available using 10,000 SPG Starpoints and in 2011 you may be able to book free nights with Wyndham Rewards points. Park Hyatt Bermuda and Grand Hyatt Nassau will be hotel reward options in a few years. Hilton’s Waldorf Astoria Collection doubled in size with hotel branding acquisitions the past two years.

Big hotel chains, big money and big marketing back up big hotel partnerships.

The Venetian Las Vegas - InterContinental Alliance Resort

So what is the lure of US-based resort hotel brands associated with Marriott, Wyndham, Starwood, Hilton, IHG, Choice and Hyatt?

A good read in The Tribune Bahamas paper about Bahamas tourism gives some insight to answer this question. U.S tourists comprise 80% of international visitors to the Bahamas. Only 24.5% of hotel rooms in the Bahamas are associated with the major U.S. hotel brands.

                U.S. Brand Hotel Rooms in Bahamas

  • Wyndham 5.1%
  • Starwood (Sheraton) 4.2%
  • Choice 1.9%
  • Hilton 1.7%
  • Other U.S. brands 11.6%
  • No Marriott or Hyatt or IHG brand hotels in the Bahamas

A June 2010 Bahamas Tourism report cited in The Tribune Bahamas paper: “We can conclude that many of the Caribbean islands, especially the US Virgin Islands, Puerto Rico, Jamaica, Trinidad, the Bahamas and the Dominican Republic have a defined need for US-branded hotels to accommodate the significant volumes of US visitors.”

“It is in our opinion that US-branded hotels are, overall, under-represented in the Caribbean, and that there are opportunities for conversions or new developments of US-branded hotels in the region.” 

“I think that what these brands also do is induce demand,” Mr Jordan said (HVA Bahamas Director). “What that means is that people go to that destination because of that brand, and others do not go to that destination – they go to another. The brand assists destination marketing.

“What we need to understand is that when the US customer travels to a destination, they look for familiarity a lot of the time. Some like going to the Marriott, others like going to the Hyatt. ”

The Difference between Airline and Hotel Brands

Unlike airlines with large corporate control over the flight routes, planes and frequent flyer programs, hotels are a series of partnerships between hotel owners, management companies and hotel loyalty programs for marketing hotel properties.

Baha Mar Ltd. is a hotel development company in the Bahamas. They have signed a deal with Hyatt Hotels to create a 700-room Grand Hyatt Hotel as part of the 1,000-acre Cable Beach, Nassau, Bahamas resort. Baha Mar Ltd. is also planning hotels at Cable Beach with Morgans Group and Rosewood Hotels & Resorts, a luxury brand with high-end U.S. resorts.

The company reportedly planned to work with Starwood Hotels to develop the Cable Beach Bahamas resort complex, but ultimately decided to diversify and work with several other hotel brand companies to branch out marketing opportunities for the US$2.6 billion resort complex.  Cable Beach Nassau Resort will develop with several U.S. based hotel brands. Baha Mar Ltd. already owns the Sheraton Nassau Beach Resort.

While frequent guests may have loyalty commitments to specific hotel chains, the hotel owners are looking to diversify and improve their reach across the markets of potential visitors.

Related links:

Hotel Interactive has the best article I have seen on the Priority Club and Las Vegas Sands Corporation partnership to brand Venetian and Palazzo hotels as “InterContinental Alliance Resorts”. (Oct 28)

IHG Press Release on Sands deal (Oct 25)

Baha Mar and Cable Beach Nassau Bahamas Development (BCworldtravelnews-Oct 18)

The Tribune Bahamas – US hotel brand 24.5% market share costing the Bahamas (Oct 28)

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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