CHANGING ROOMS
REBRANDING IS BECOMING A KEY TREND FOR BRITISH HOTELS AND THEIR OWNERS – BUT IS IT GOOD NEWS FOR TRAVEL BUYERS?
FREQUENT BUSINESS GUESTS at the 172-room Jurys Inn Chelsea can be forgiven for doing a double take when they next visit the mid-market hotel in London’s SW6. It is now (since May this year) known as the Doubletree by Hilton Chelsea. Their confusion may be enhanced
by the fact that the general manager, Dubliner Anthony Barrett, and his 63-strong team, who were at the hotel when under the Jurys Inn banner, are still working there. It gets even more complicated:
Jurys
continues to own and operate the hotel, even though it’s now bearing the name of rival Hilton’s fast-growing Doubletree brand.
Guests at the Chelsea property will not be the only ones confused. The Jurys Inn Islington is also converting to a Doubletree this summer, while the Jurys property at Heathrow is being switched in December to another Hilton brand – Garden Inn – also owned and operated by Jurys. What is going on? Jurys CEO John
Brennan says the reason behind the rebranding is to “leverage the prime locations” of three of its London hotels. This strategy is designed to capitalise on Hilton’s global brand identity – and crucially its extensive distribution channels and corporate deals. The
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rebranding does not come cheap: Jurys is spending some £20 million on the project, including refurbishments.
THE NAME GAME Yet such rebranding is not unusual and, in fact, is fast becoming a key trend in the London and UK regional hotel markets. Recent figures from hospitality consultants BDO revealed that over 6,500 UK hotel rooms last year were rebranded under a different name, double the number that took on a new identity in 2012. In most cases ownership was not af- fected by the rebranding, suggesting that hotel owners – sharing similarities with the billionaire backers of Premier League football clubs – increasingly appear to believe that changing the name over the door (or bringing in a new coach) can also change fortunes for the better. There is perhaps some justification for this belief, in hotels as well as in sport. As with most aspects of the commercial world, the pace of change in the hotel business is accelerating as the market becomes increasingly dynamic. From new technology to chang- ing demographics, the agenda is being reset for the UK’s hotel sector, affect- ing everything connected to hospital- ity – from booking via smartphones to creating a branded niche to target a new breed of travellers.
But pressure is also coming from inves- tors who, not surprisingly, are seeking the best return for their money. Prop- erty agency Savills reports that nearly £1 billion was invested in UK hotels in the first quarter of the year, mainly from private equity firms and Asian investors. “There is the potential to beat last year’s transactions total of £3.9 billion, the highest since 2007,” says Savills’ director of hotels, Michelle Webb. Investor interest in hotels, moreover,
is a direct result of the ‘asset-lite’ strat- egy adopted by most of the major hotel groups, led by Marriott International and Intercontinental Hotels Group, since the early years of this century. They decided it was more profitable to own and develop brands than tie up their funds in actual hotel assets, selling these to investors while still in most cases managing the properties to protect their intellectual brand investment. But the strategy created a new class
of active investor/owner, demanding top performance and willing to take action if they felt this falling short. So there has been pressure on hotel groups to come up with ever-more innovative new brands, predominantly – but not exclusively – in the budget sector. According to stats from consultants HVS, the UK budget sector already accounts for some 36 per cent of the market – the largest single
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