THE CONCEPT OF USING INDEPENDENT BRANDING SPECIALISTS
Too many things are going wrong by design and we need to fix this once and for all and for the long term.
There are three groups who are directly involved in the branding decision at the large hotel companies and they are the Brand, the Owner and the Employee. Each of these groups have their special areas of interest and none of them are happy all the time, in fact the scale of happiness is hovering precariously low almost all the time.
And while there are other groups involved in the process which include the Banker, the Market Study Consultant, the Architect and the Builder, I am going to deal with the first rung in the process as I attempt to solve this heretofore complex series of needs.
Here are the basic needs of those three groups on the first rung of the ladder of development,
THE BRAND.
The President of the typical hotel group is committed to growth at any cost. His shareholders demand it. The stock analysts demand it and the spouse relies on the millions in stock options that will result from exponential growth. The VP Development and his team make annual predictions of the number of new hotels and acquisitions that will be signed up under each brand and predictions are made, budgets are approved and the business press get the news. Failure to reach the predicted level of growth results in great pain and much navel gazing. Those at the sharp end of this false energy are the chains' Employees who are charged with the task of persuading Owners to choose their brand whether appropriate or not. More about them in a moment. The outcome is that many re-brandings are done inappropriately and the brand is weakened.
THE OWNER
The hotel or resort Owner or developer is intent on finding the best hotel operator and brand that will deliver the maximum return on his investment. This will mean a difficult decision involving choosing between Group A or B in an intricate cocktail of market positioning, supply and demand, brand image, business terms, incentive clauses, exit windows and geographic exclusivity. His decision on Group A or B is not made any easier by the Employee of Group A or B because both are 'encouraged' to lie, exagerate and mis-lead the Owner into his decision in their favour. The wrong decision could result in a short-fall of millions in profits and a dysfunctional relationship over years with the brand. Huge penalties are inflicted for terminations and several years of profit shortfalls will never be recuperated.
THE EMPLOYEE
The Employee is typically an accomplished business negotiator armed with a range of promotional tools, charts and statistics that support the choice of his brand. He may well be either a newcomer to the industry with an MBA or a veteran hotelier who has worked his way up the ladder to this prestigious position with an impressive title that will tell the Owner he is dealing with the most senior representative of the Chain in the world. His first task is to eliminate the connection with Group B and this is typically done with a 'pre-contract' contract. The Employee's actual days are numbered because the countdown to the next recession started at the end of the last recession when the newly appointed President obtained a budget to re-activate the development department which is then systematically annihilated every seven years. There are currently literally hundreds of unemployed ex-Employees in this Corporate Musical Chairs exercise in which large numbers of Employees change companies every seven years and start the process again with a new brand pitching new lies and dissing their former colleagues.
THE SOLUTION
The solution to this Seven-Year Itch is a scenario in which this task of development is out-sourced to a corporate, globally represented group made up of independent branding specialists. This important group would have the ultimate task of servicing the Owner better, providing better-planned strategic growth for the Brand at a lower cost using Employees that work over a long-term with clear definitions of what the brands can and can not do with and for a global network of Owners that they know well and where trust is accumulated over a period of years.
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It becomes even more interesting as one contemplates other areas that are connected to the relationship between an Owner and the Chain and amongst those are the following,
- A typical Owner will look at a hotel investment as one with a shelf life of 7-10 years when he might anticipate an 'exit strategy' and wish to dispose of the asset. A typical management contract will be sought by Chains for 30 years plus options. The solution of a global branding group would provide the counsel and the link to a solution.
- A branded hotel that has run itself through a 20 year term might benefit from a second marriage and a change of name. The Brand may also be looking for an 'out' in favor of a new development and the Owner might also enjoy the enthusiasm of a new 'bride' and benefit from a re-branding.
- In the same way as a corporation will do succession planning for its' executive staff, a concept of 'succession branding' can be envisioned where re-branding becomes a natural progression rather than a chaotic transfer of logos. This, a process that is planned by the Brand in conjunction with the Employee Group that acts as a transition facilitator.
If you are a developer and need the counsel of a professional judge for your selection process, email us at [email protected]
http://davidmcmillangroup.typepad.com/consulting/2009/03/financial-disaster-management.html
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