“As a franchisor, we've got 25 different brands and over 9,200 hotels across the world. It’s about making sure that the owners are taken care of at different price points, and guests are too. Our mission is making hotel travel possible for all,” Sripathi says.

Brand choice

Barbara Purvis, president of white label operator Essex Hotel Management, adds that in a landscape of “a thousand brands” her firm seeks to focus on “trying to navigate the landscape of different options in working with owners… making sure that the terms are fair and reasonable”. She adds: “What’s different today is that we have soft brands and independent options as well as hard brands.”

James Carroll, president & CEO of independent hotel management firm Crestline Hotels & Resorts, says that demand is a key starting point for his firm when working with owners. “When we're evaluating with an ownership group what brand they should put on the hotel, we definitely look at the demand landscape. What is the demand in that market based on the type of hotel you have, which part of that demand are you trying to attract, or you think that you can grow the most with?”

He agrees with Purvis that the vast panorama of options – “a thousand plus brands out there to choose from” – means that managers must have a good understanding of factors like demand profile and guest type to be able to narrow down their selection.

Once that clarity has been reached, “you can look at the particular product you're building, how it might fit in the designs of the different brands that are available, and negotiate with some of the different brands based on what they already have in the market”, evaluating, for example, “what kind of incentives they might want to put your way, or how available some of their sub-brands are, and try to pick that optimal choice”.

Brand families

Speaking from an investor perspective, Brian Waldman, chief investment officer of Peachtree Group shares what he is looking for in a brand in terms of obtaining “value”. He notes: “The brand is the brand company – they are effectively your partner,” he says. “They're getting around 10% of the revenue and for that they need to deliver value.

“We've done the analysis time and time again, independent versus branded. And I'm a big believer in the brands – they serve a really important purpose, they drive business to our hotels, and you're paying them a fee for it.” In return, he notes, you need “a much smaller sales staff because they're delivering value”.

He explains that to date, Peachtree has tended to “lean towards certain brand families”, often because “overall, the consumer is looking at brand families and points and loyalty”. He adds: “Obviously from an acquisition perspective, the brand is usually baked in and you're inheriting that – although sometimes there's the ability to up brand or down brand.” With development, the choices are broader.

Purvis adds that on the topic of management – or “who is really running the show” – “the owner, the brand and the management company all need one another”. She notes: “It's a symbiotic relationship, even if there are times when our interests aren't aligned. But I think the brands need the third-party management companies to promote the value of the brand and the integrity, and its performance over other brands”. She adds: “The management companies need the brands to provide the tools to derive that value and to ensure that guests are receiving the benefits that they are looking for. And owners get that ROI, we hold the brands accountable for that and the brands need to hold us accountable.” She concludes: “It’s about working together – I think that’s the right attitude. It’s a win-win.”

By Isobel Lee