Premium Essay

Managing Hotel Brand Equity

In: Business and Management

Submitted By lolabela
Words 1562
Pages 7
Managing Hotel Brand Equity

Summary:

This research article examines what constitutes brand equity in the hotel industry and demonstrates a method for how that brand equity can be measured. It first states that the chief reason for building brand equity as the cornerstone for business success is that it helps offset competition by differentiating the product, allowing brand owners to charge a premium, and fostering customer loyalty. The brand embodies all that the business stands for. A brand’s strength develops over a long period of time, and a strong brand is expensive to create. Managing brand equity is made increasingly difficult by the rapid proliferation
of new brands, dramatic increases in media costs, the more extensive and aggressive use of promotions by established firms, and the cost and difficulty of obtaining distribution.

Brands are a quick way for hotels and hotel chains to identify and differentiate themselves in the minds of the customers. The favorable or unfavorable attitudes and perceptions that are formed and influence a customer to book at a hotel brand represent the brand equity. A guest’s good experience with a hotel brand builds brand equity, while a bad experience erodes that brand equity. A person does not need first-hand experience with the brand to form an impression of a brand, though, for brand equity is formed among non-users by exposure to media messages or by word-of-mouth. Brand equity is a measure derived from a range of customer-satisfaction criteria. A hotel will have a strong brand equity when a large number of customers have a favorable perception of and attitude toward the hotel brand. High equity is associated with high customer satisfaction, brand preference, and loyalty; high guest retention; high market share;
a price premium; high profits; and, finally, good shareholder value.

The authors measure a hotel brand’s equity

Similar Documents

Premium Essay

The Relationship Between Brand Equity and Firms’performance in Luxury Hotels and Chain Restaurants

...between brand equity and firms’ performance in luxury hotels and chain restaurants$ Hong-bumm Kima,1, Woo Gon Kimb,* b a College of Hospitality & Tourism, Sejong University, Kwang-jin Gu, Gun-ja Dong 98, Seoul 143-747, Republic of Korea School of Hotel and Restaurant Administration, Oklahoma State University, 210 HESW, Stillwater, OK 74078-6173, USA Received 27 February 2004; accepted 4 March 2004 Abstract There is a growing emphasis on building and managing brand equity as the primary drivers of a hospitality firm’s success. Success in brand management results from understanding brand equity correctly and managing them to produce solid financial performance. This study examines the underlying dimensions of brand equity and how they affect firms’ performance in the hospitality industry—in particular, luxury hotels and chain restaurants. The results of this empirical study indicate that brand loyalty, perceived quality, and brand image are important components of customer-based brand equity. A positive relationship was found to exist between the components of customer-based brand equity and the firms’ performance in luxury hotels and chain restaurants. A somewhat different scenario was delineated from the relationship between the components of customer-based brand equity and firms’ performance in luxury hotels and chain restaurants. r 2004 Elsevier Ltd. All rights reserved. Keywords: Customer-based brand equity; Firms’ performance; Chain restaurants; Luxury hotels; Brand awareness ...

Words: 9223 - Pages: 37

Premium Essay

Management

...Annals of Tourism Research, Vol. 38, No. 3, pp. 1009–1030, 2011 0160-7383/$ - see front matter Ó 2011 Elsevier Ltd. All rights reserved. Printed in Great Britain www.elsevier.com/locate/atoures doi:10.1016/j.annals.2011.01.015 BRAND EQUITY, BRAND LOYALTY AND CONSUMER SATISFACTION Janghyeon Nam Kyungnam University, South Korea Yuksel Ekinci Georgina Whyatt Oxford Brookes University, UK Abstract: This study aims to investigate the mediating effects of consumer satisfaction on the relationship between consumer-based brand equity and brand loyalty in the hotel and restaurant industry. Based on a sample of 378 customers and using structural equation modelling approach, the five dimensions of brand equity—physical quality, staff behaviour, ideal selfcongruence, brand identification and lifestyle-congruence—are found to have positive effects on consumer satisfaction. The findings of the study suggest that consumer satisfaction partially mediates the effects of staff behaviour, ideal self-congruence and brand identification on brand loyalty. The effects of physical quality and lifestyle-congruence on brand loyalty are fully mediated by consumer satisfaction. Keywords: brand equity, customer satisfaction, brand loyalty. Ó 2011 Elsevier Ltd. All rights reserved. INTRODUCTION Consumer satisfaction is essential to long-term business success, and one of the most frequently researched topics in marketing (e.g., Jones & Suh, 2000; Pappu & Quester, 2006). Because consumer satisfaction...

Words: 9651 - Pages: 39

Premium Essay

Benchmark Hotel Project

...International, Inc. is at the top of the lodging industry. The company is one of the world's leading hoteliers with 3,700 operated or franchised properties in more than 70 countries. Its hotels include full-service brands and the Marriott family owns about 30% of Marriott International. The top two competitors are Starwood Hotels & Resorts Worldwide, Inc. and Hyatt Hotels Corporation. Starwood Hotels & Resorts Worldwide, Inc. is in the luxury and upscale categories, where the prices are high and the services extensive. They appeal to the most fashionable clientele because the company cultivates celebrities and holds events to attract them. By revenue, Starwood is in the middle, and has the lowest ratio which generates 1/3 of sales from food and beverages. Additionally, the return on equity and return on assets is in the bottom half of the competitor; leaving Marriott to produce 50% more revenue than Starwood. Hyatt Hotels Corporation is a top operator of luxury hotels and resorts that managed, franchised, and owned properties in 45 countries. Its brand offers hospitality services targeted primarily to business travelers and upscale vacationers. The company generates only 33% of the revenues in comparison to Marriott International, Inc. In addition, 60% of the revenues are from hotel operations or leased properties. Benchmark Company Marriott International, INC Founded by J. Willard Marriott and now led by Arne Sorenson, Chief Executive Officer. Marriott...

Words: 1175 - Pages: 5

Premium Essay

The Analysis of Brand Equity

...Cornell Hotel and Restaurant Administration Quarterly http://cqx.sagepub.com Measuring Customer-Based Restaurant Brand Equity Woo Gon Kim and Hong-Bumm Kim Cornell Hotel and Restaurant Administration Quarterly 2004; 45; 115 DOI: 10.1177/0010880404264507 The online version of this article can be found at: http://cqx.sagepub.com/cgi/content/abstract/45/2/115 Published by: http://www.sagepublications.com On behalf of: The Center for Hospitality Research of Cornell University Additional services and information for Cornell Hotel and Restaurant Administration Quarterly can be found at: Email Alerts: http://cqx.sagepub.com/cgi/alerts Subscriptions: http://cqx.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav Downloaded from http://cqx.sagepub.com at SAGE Publications on December 2, 2009 © 2004 CORNELL UNIVERSITY DOI: 10.1177/0010880404264507 Volume 45, Issue 2 115-131 ARTICLE 10.1177/0010880404264507 Measuring Customerbased Restaurant Brand Equity Investigating the Relationship between Brand Equity and Firms’ Performance by WOO GON KIM and HONG-BUMM KIM Strong brand equity is significantly correlated with revenues for quick-service restaurants. In a study 394 respondents gauged the strength of seven quickservice restaurant brands doing business in Seoul, Korea. The study tested four elements of brand equity, namely, brand awareness, brand image, brand loyalty, and perceived quality. Of...

Words: 8344 - Pages: 34

Premium Essay

Luxury Brands

...DO SOCIAL MEDIA MARKETING ACTIVITIES ENHANCE CUSTOMER EQUITY/VALUE PERCEPTION? | By GUL KHAN. | Thesis submitted to the Lahore School of Economics in partial fulfillment of the requirements for the degree of [MBA] | [2013] | [Word count] Supervised by: [Ms. SHAMILA KHAN] 1. Introduction The luxury market is a high revenue market across the globe and is continuous on rise. This rise can be increased through expansion for the existing and new brands. This industry is a high value-added industry based on high brand assets. The number of customers for this industry can be increased through specially designed social media marketing techniques. There are great opportunities in emerging markets such as China, India and the Middle East for the luxury brands, so the expansion can be done in these markets. Right now, Luxury brands cannot rely only on strong brand assets and hence secure regular customers. The entrance of new brands follows heated competition and hence signals unforeseen changes in the market dynamics. The global economic downturn has forced the luxury brands to change the business models. The brands cannot rely only on brand symbol and consideration of other factors like brand legacy, quality, esthetic value, and trustworthy customer relationships is necessary in order to succeed. The success element for the companies is that they have to provide value in every possible way. Luxury brands have skewed their eyes toward social media marketing...

Words: 1966 - Pages: 8

Free Essay

You Are an Investment Analyst

...add hot food items to their menu and the name “Hot Shoppes was born (International, 2014). Today, with his headquarter based in Bethesda, Md., Marriott operates more than 4,087 properties in over 80 countries and territories around the world, over 697,000 rooms under 16 brands including Courtyard, Renaissance and Ritz-Carlton; more than 800 new Marriott-operated properties are in the works worldwide. Founded by J. Willard Marriott, the company is now led by President and Chief Executive Officer Arne Sorenson and J. Willard Marriott's son, J. W. Marriott, Jr. is the Executive Chairman. 19 1111119 Hilton International began around 1919, when Conrad Hilton bought The Mobley, a hotel in Cisco, Texas. Mr. Hilton had greater ambitions, over the next few years; he added other Texas hotels in his assets. In 1943, with the purchase of the Roosevelt and Plaza hotels in New York City, Hilton became the first coast-to-coast hotel group in the United States (Worlwide, 2014). Hilton International operated as a separate company, with Conrad Hilton as president. Two years later, Conrad Hilton's son Barron succeeds him as president of the domestic Hilton Hotels Corporation. In 1954, Conrad N. Hilton bought Statler Hotel for $111 million dollars, which at that time was the...

Words: 2135 - Pages: 9

Premium Essay

Role of Advertisement in Managing the Brand Equity of Carbonated Drinks Among Generation-Z

...ADVERTISEMENT IN MANAGING THE BRAND EQUITY OF CARBONATED DRINKS AMONG GENERATION-Z Dr. Nishakant Ojha1 ABSTRACT Companies spend large amount of their money on building brand equity. This study explores the relationship between advertising and brand equity. The purpose of this study is to how advertisements of carbonated drinks acts as stimuli in influencing purchase decision of generation-Z. It also explores the role of electronic media in advertising. Data for the study has been collected by using the survey method using convenience sampling and Judgment Sampling among Generation-Z i.e. respondents born in 1989 - till 2000s respondents in Jalandhar and Phagwara city, Punjab. The reliability of data was established using Cronbach’s coefficient Alpha. The data reduction technique of factor analysis was used for introspection of data. KEYWORDS Advertising, Brand Equity, Effective Medium, Generation Z etc. INTRODUCTION The prime goal of every business organization is to build strong brand equity (Keller and Lehmann, 2006). The biggest thrust behind the buying habits of consumers is brand equity. Brand equity is defined as the value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. It provides an advantage of larger margins, greater intermediary cooperation and support, and brand extension opportunities (Delgado-Ballester and Munuera-Alemán, 2005). According to Aaker’s theory brand, equity has various dimensions as brand Loyalty...

Words: 2921 - Pages: 12

Premium Essay

Swot Analysis Report

...US) to unify the Hilton brand worldwide. With a downturn in the gaming industry translating into sluggish results in Hilton’s gaming segment, the company spun off its gaming interests as Park Place Entertainment. In 1999 Hilton made a massive acquisition with the $3.7 billion purchase of Promus Hotel Corp. The following year Hilton sold its flamingo Casino-Kansas City, a remaining casino property left over from the Park Place spin off, to Isle of Capri Casinos for $33.5 million. In 2001 it sold 56 of its leases and management contracts to RFS Hotel Investors for a for about $60 million. In 2002 it unloaded all 41 of its Red Lion hotels (in addition to two Doubletree hotels) on West Coast Hospitality Corporation for about $51 million. SWOT Analysis Strengths Hilton has a number of strengths that are divided into the three main core competencies, hotel operations, managing and franchising operation, and timeshare operations. Hotel Operations: Hilton owns a majority or controlling interest in and operated 65 hotels, representing 33,536 rooms. The owned hotel include some of the Company’s largest and most profitable hotels, including the 1,425 rooms Waldorf-Astoria: the 2,086-room Hilton Hawaiian Village Beach Resort & Spa: the 1,895-room Hilton San Francisco; the 1,544 room Hilton Chicago; the 1,639-room Palmer House Hilton; the 1,119-room Hilton Washington; and the 1,600-room Hilton New Orleans Riverside. The Company leased nine hotels, representing 2,836 rooms...

Words: 1220 - Pages: 5

Premium Essay

Banyan Tree

...HKU774 CATHY ENZ ALI FARHOOMAND BANYAN TREE: SUSTAINABILITY OF A BRAND DURING RAPID GLOBAL EXPANSION Within the next five years, if we play our expansion card right and we manage our growth properly, we have a reasonable, credible opportunity to become one of the top two or three dominant players in a global space which is very niche but nevertheless very global. - K.P. Ho, CEO of Banyan Tree Holdings Limited1 On 14 August 2006, exactly two months after its initial public offering (“IPO”), Banyan Tree Holdings Limited announced second-quarter results for the period ending on 30 June. Revenue had more than doubled to S$71.42 million, largely due to recovery following the 2004 Indian Ocean tsunami. The company felt that this was only the beginning, however, and had earmarked part of the IPO proceeds to finance an ambitious expansion plan. At the core of its business development plan was a proposal to open 21 new resorts3 over four years that would span non-Asian territories from Greece to Mexico. Banyan Tree CEO Ho Kwon Ping’s vision was to “string a necklace [of Banyan Tree properties] around the world”. The Asian Financial Crisis of 1997, the SARS crisis of 2003 and the Indian Ocean tsunami of 2004 had taken their toll on the travel and tourism industry [see Exhibit 1]. Although recovery was on the horizon, Ho understood the need to diversify risks across geographical regions and the IPO provided the finances to venture out of familiar territory. Two...

Words: 15794 - Pages: 64

Premium Essay

Marriott International, Inc.

...Business Analysis Part 1 Marriott International, Incorporated is a leader in the global hospitality industry with more than 3,500 properties and the broadest portfolio of brands in the industry. Since the beginning of its existence, “Marriott has firmly established a culture and a tradition of innovation, service and leading performance” (Marriott Website). I chose to conduct a business analysis of this company because one of my interests is managing a prestigious international hotel and resort. After conducting a research about Marriott, I learned the strengths, weaknesses, opportunities, and threats (SWOT) analysis about the company. Their strengths are on technical innovations, higher brand recognition and recall, and global presence, and strong brand portfolio. The company adopted the so-called Marriott’s Automated Reservation System for Hotel Accommodations (MARSH), “a technical innovation to ease the business process and increase hassle-free experience for the customers” (Marriott International, Inc. Datamonitor). MARSH is a well-known reservation system to assist the customers wherever they go around the world. This technology gives the Marriott an advantage over its competitors. Another technical innovation that the company is using is the Property Guest Object Oriented System (PGOOS). This is “an auditing tool which automatically audit every night its central reservations system, i.e. MARSH” (Marriott...

Words: 2319 - Pages: 10

Premium Essay

Comparative Beta Methodology

...By Kurt Harris for KPB Equities Introduction Examining the correlation of movement between the stock prices of hospitality companies and the overall securities market, otherwise known as “Beta,” and compiling those findings to best estimate the beta of a new or non-existing company is a common process in quantitative analysis. The necessity of an accurate beta for new or existing companies cannot be understated in the importance of relation to the proper valuation of equity. Methodology To accurately ascertain beta we used a sampling of hospitality companies within the United States. These companies can be categorized into two separate but similar divisions: Real Estate Investment Trusts (REIT,) whose sole investments include direct hotel investments and/or hotel financing, and either operational holding companies managing several hospitality brands or directly managed hospitality companies. The sampling of hospitality companies were chosen selectively for their ability to fit within the parameters of the study. Those parameters include construction costs, square footage, population size of host city, population density, height of the building, and similarity to subject city (Salt Lake City, Utah.) Results Construction costs on hotels ranging from 8-25 stories in the continental United States yield estimates of between $72.3MM and $78.4MM. The average size of these hotels is between 400,000 and 500,000 Sq. ft. (RSMeans.) KPB Equities’ capital budget for construction...

Words: 685 - Pages: 3

Free Essay

Business

...targets on growth and expansion, therefore the main business value is to know how to keep own loyalty, foresee consumers’ needs, incur a liability to customers concern, and fit with top quality part of consumer service. The vision one of the World reputed hotels group - InterContinental Hotels Group is to become one of the greatest companies in the World. Their business model has a clear focus on franchising and managing hotels, rather than owning them outright, enabling them to grow at an accelerated pace with limited capital investment. Furthermore, IHG benefits from the reduced volatility of fee-based income streams, as compared with the ownership of assets. Thus, InterContinental Hotels Group are closely related with tourism and business trips, it tries to accompany and present itself on high quality to consumers. By economic side IHG tries to expand internationally, reinvest to new branches. The total number of hotels under the IHG brand is 4,437 with 647,161 rooms and 68% of total room’s revenue booked through IHG’s channels or by Priority Club Rewards members direct to hotel. Primary function of IHG is to serve consumers in every single direction of the World. Moreover, IHG tries to attract experts from each aspects of hotel business to get more privileges among competitors. Getting the HR Director of the year award in December 2010 at the Personnel Today Awards in London, Tracy Robbins, Executive Vice President, Human Resources & Group Operations Support, proved the IHG’s...

Words: 1128 - Pages: 5

Premium Essay

Starwood Hotels Marketing Draft

...Overview of Starwood Hotel & Resorts Worldwide, Inc. Starwood Hotels are one of the world’s largest hotel and leisure companies. They conduct hotel and leisure business both directly and through their subsidiaries. Brand names includes following: * St. Regies: A luxury full service hotel, resorts and residences is for connoisseurs who desire the finest expression of luxury. They are located in the ultimate location within the world’s most desired destinations, important emerging markets and to be discovered paradises. * The Luxury Collection: The group of unique hotels and resorts offering exceptional service to all clientele. To give world of unique, authentic and enriching experiences to each destination that captures the sense of both luxury and place. * W Hotles: Upscale full service hotel, where iconic design and cutting edge lifestyle set the stage for exclusive and extraordinary experiences. * Westin: Hotel provides innovative programs and instinctive service which transform every aspect of guest stay into experience. * Le Meridien: A Paris born hotel brand aims to target the creative minds that are eager to learn something new and see things in different light. * Sheraton: The largest brand serving needs of upscale business and leisure travelors worldwide. * Four Points: A selected service hotel delights self sufficient traveller with what is needed for greater comfort and productivity. * Aloft: Small scale service hotel which provides vision...

Words: 2421 - Pages: 10

Premium Essay

Destination Branding

...the world has to offer; or days when expectations were simple. There was a time when people were dependent for a holiday on various other elements. Now, with one click on the internet, you can choose from the places within your budget, read hotel reviews and plan holiday as per your comfort. Globalization has resulted in options galore, be it entertainment, shopping or sightseeing, followed by global business expansion and revolutionizing of tourism sector. The world has transformed into a global village, it’s a crowded place where 250 countries are competing to woo holidaymakers of all kinds. In today’s rat race, it has become imperative for each nation to compete with other for their share of the world’s consumers, business, investment, attention, tourists and position. For each country, the cities play a significant role in international competition for funds, fame and talent. The prosperity of an entire economy is at stake, and how effectively the city manages to succeed or fall depends on how effectively it communicates and brands itself. The nations focus on marketing their cities as a distinctive place and communicate about the place with help of media resources. In today’s world cities are like companies; those with a strong brand image will attract more tourists and investors. Any factor that emphasizes on a country’s appeal is constructive and herein comes the importance of destination branding. This review would introduce the concept of “Destination Branding”...

Words: 3802 - Pages: 16

Premium Essay

Marriott Strateg Management

...back to the community, through service diversification and enduring global expansion. Executive Summary This report analyzes the current strategies of Marriott International and based on the given and researched information to develop a number of recommended future strategies in order to sustain the growth of the corporation. I believe that Marriott has a good chance for success even through the market is highly competitive. Marriott can successful by developing market to Asia Pacific and using the two recommendations that have been discussed, whilst being backed up throughout with the core competency of marketing. I believe that the multi-brand and product advantage can be achieved despite other hotel corporation to penetrate any market for a period of time. As the leading hospitality corporation develop over 13 multi-brand products in serving various customer needs that no other hospitality group has. However, this advantage is not sustainable in the long term and will be lost if the service is not keep advantage hospitality knowledge and up-to-date. Professional team and leading technology should be use to ensure the service stays at the forefront of the hospitality industry, but given that rapid changing customer behavior is the...

Words: 3135 - Pages: 13