During the 46th Annual NYU International Hospitality Industry Investment Conference held in New York in June, several hotel CEOs mentioned that an upsurge of middle-class travellers is driving hotel companies and owners to embrace more affordable options. Adding moderately-price soft brands, then, is a way for hotel companies to appeal to the needs of the market, and to do so quickly.
Recognising the handwriting on the wall
The announcement heralding the introduction of Handwritten Collection in early 2023 noted that with creation of the soft brand, “Accor is broadening its unrivalled brand portfolio and midscale hotel offerings and will look to replicate the success it has achieved with the Group's other collection brands across other segments.” Those collections include the MGallery Hotel Collection, in the upper upscale range, and Emblems Collection, a luxury soft brand.
Handwritten Collection, says Ben Cary, Accor’s vice president of development for the U.S. and Canada, “is a notch below what we already had, (made up) of stylish boutique hotels, perhaps with a smaller level of F & B.” Yet despite the original intent for a midscale collection, Cary notes that as the brand story unfolds in North America, Handwritten will likely emerge as an “upscale brand in competition with Tribute, Tapestry and the like.” That said, in Europe, he noted that midscale can skew higher from a product perspective, so that Handwritten hotels will encompass upper midscale and up.
Currently, there are 17 Handwritten Collection hotels in operation, and another 25+ in the pipeline. The Hotel Stratford in San Francisco, CA became the collection’s first North American property this spring. Camil Yazbeck, global chief development officer for Accor's premium, midscale and economy brands, says that growing largely through the conversion of existing independent four-star hotels, “we aim to have over 250 properties by 2030.”
Reaching a younger demographic
“When people think of soft brands, they think luxury and upper upscale,” points out Leo Danese, brand leader for Registry Collection, Trademark Collection by Wyndham and TRYP by Wyndham . “But we are seeing a growing preference by young travelers who want unique lodging experiences at an attainable price point.” A midscale soft brand, he says, is a way to provide hotel owners with a product that can meet the new demand from a younger generation.
Trademark Collection by Wyndham is the franchising giant’s entry into the midscale soft brand game. It’s made up of three and four-star properties. It was developed in 2017, only one of two brands (the other being Wingate) that Wyndham created organically. “The upper midscale space is where Wyndham is at its strongest,” says Danese, “but we noticed a white space in that market in terms of soft brands.” Wyndham is quickly filling up that space. Right now, there are more than 270 hotels in the Trademark Collection, with another 100 in the pipeline. Trademark, says Danese, ”is our biggest growth engine at this point and that’s why we are investing to get it right and continuing to grow it.”
Will Wyndham explore opportunities further down the segmentation food chain? “We’ve considered midscale and economy, but because we are so strong in branded space in those spaces, we can’t find justification to do that, “ says Danese.
Filling in blank spaces swiftly
Best Western, on the other hand, sees big opportunities in both midscale and economy. According to Brad LeBlanc, senior vice president and chief development officer for Best Western Hotels & Resorts, about 10 years ago, the company began noticing there were independent hotels in those segments that didn’t fit into the company’s existing soft collection options. “We were looking to broaden our arms and take in more prospective hotels,” says LeBlanc. The result was the addition of SureStay Collection, an economy brand launched as part of the SureStay Hotel Group in 2016, and the BW Signature Collection, launched in 2017 as an upper midscale flag. BW Signature now has 181 properties open and another 34 in the pipeline. SureStay Collection, the industry’s first economy soft brand, has 136 properties open and 18 more on the way. “We saw that there were many super-clean and well-run economy hotels that offer something unique,” says LeBlanc, citing examples of Route 66-style roadside hotels that have been refurbished to today’s standards as potential properties of interest.
As to whether others will follow the Best Western strategy of adding an economy collection, LeBlanc says maybe, but. “I do see Marriott moving down market with their extended stay, and there’s Hilton Spark as well.” But in terms of soft brands, “we don’t see anyone on the runway behind us right now,” he says. “The more success we have, the more people will want a piece of that success, So, I wouldn’t be surprised if they come to chase us. But it’s a foot race and catching up is a hard ball game to play.”
Blurred lines
One of the biggest players in the midscale space, Choice Hotels, also has a soft brand. According to Indy Adenaw, senior vice president and general manager, upscale for Choice, the Ascend Hotel Collection is an upscale soft brand.collection. “Ascend was our first big step into upscale and Choice is using lessons learned from Ascend to expand the type of owners and operators and guests we serve,” says Adenaw. That said, Accor, Wyndham and Best Western executives all mentioned Choice’s Ascend, the first player in the soft brand business, as a midscale competitor, proving that defining a product by market segment is never an exact science.
By Laura Powell
