Although not a new concept, dual-branded properties are dominating hotel development globally - with giants including Marriott, Hyatt and IHG all investing in the format. And for good reason; with construction costs rising and viable land supply becoming increasingly scarce, this model offers potential cost-saving benefits and an opportunity to drive revenue from multiple customer segments - while offering guests enhanced choice and convenience.
Generally, dual-branded models comprise two similar hotels from the same brand family - such as a Residence Inn and Moxy by Marriott - in a single building. In rarer cases, they combine brands from different hotel groups, offering owners access to multiple reservation systems and customer bases.
Cycas Hospitality’s CEO, Matt Luscombe has seen the concept development from both sides. Before Cycas, he worked at IHG for ten years and oversaw the creation of the group’s first dual-branded model. “At the time, IHG had sponsored the London Olympics and there was a plan to build an enormous Holiday Inn property overlooking the Olympic Park,” he says. “The idea of combining two brands under the same roof came up and we were petrified about creating confusion among guests or diluting guest experience, but it actually worked incredibly well. The two Stratford hotels performed amazingly well commercially, not just during the Olympics but also immediately after and for many years since.
“The guest experience and commercial proposition were remarkable. It enabled us to have a really distinct set of guest experiences while operating under one operations team and consolidating our back-of-house services. The opportunity to upsell, cross-sell and provide distinct offerings for our guests created real commercial synergy.”
What are the benefits?
One of the model’s main drawing cards is that it broadens market reach, enabling owners to diversify their customer base. “A dual-branded hotel is, in most cases, an effective tool to gain access to different types of guests in an efficient building structure,” says Evan Weiss, COO of LW Hospitality Advisors. “For instance, if you were to have a Hyatt Place and Hyatt House in the same location, you’re going to have extended-stay guests as well as select-service upscale guests. Yes, you may have the same reservation system but it does give you access to multiple customer types.”
Cycas’ Luscombe agrees that the key to a successful combination is selecting brands that are complementary but truly diverse, ensuring they cater to different clientele. “All of our double-decker hotels today have an extended-stay brand and a limited- or full-service brand to complement it,” he says. “There’s an obvious synergy there as they are two very different products and different guest propositions, but that’s not to say that one of the two brands in a successful dual-branded hotel has to be an extended stay product. It could be a full-service upscale and a limited-service product, for instance, but it would be more difficult to get real synergies if you had two very similar brands from the same portfolio.”
One way dual-branded hotels save costs is through shared staff - investing in one strong team that works across both brands. “When we took over our Dundee hotel - which combines Staybridge Suites and Hotel Indigo - the first thing we did was combine the two distinct teams which enabled us to save money,” says Luscombe. “And it’s paying great dividends: we’ve seen improvements in the guest experience, more cost-efficient operations and revenue is ramping up, so there’s been no sort of negative effects of streamlining the operation.
“The reality is that, behind the scenes, the ways of working with big global brands are very consistent regardless of which of their brands you’re working with. It’s the same relationships with sales teams, the same technology interface, the same operational support and so on. It hasn’t proven to be overly challenging for, for instance, the right general manager to run one very large property that’s flagged with two different brands from the same global chain.”
Although shared back-of-house operations is an ingredient for success, guest-facing elements should be kept distinct to ensure both brand identities are retained. “There are certain aspects that you need to keep true to your brand in order to make sure it’s successful, otherwise it becomes one very large hotel product versus having multiple opportunities within the space,” says Weiss. “Knowing what to share, how to share it and how to at the same time differentiate the product is important. If you’re sharing too many things, there’s certain to be operational challenges, but if you’re not sharing enough then there isn’t really a whole of synergy happening.”
“There should be separate entrances and public areas, completely different room designs and guest-facing teams that are completely distinct from their uniforms to their service culture,” adds Luscombe. “From a guest’s perspective, these should be two different hotels - and the only exception I would make to that is amenities that can be shared such as a gym or pool.”
With triple-branded hotels - such as Chicago’s Hilton property that houses a Garden Inn, Hampton Inn and Home2 Suites - now starting to pop-up, the future of dual- and multi-branded properties is bright. “I think we will continue to see different price points and hotel types,” says Weiss. “I hope we see more true, dual-branded accommodation, in the sense of having multiple brand families - such as a Marriot and Hilton - under the same roof.”
- Dual-branded properties combine two hotels under the same roof, offering owners and developers potential cost-saving benefits and access to multiple customer segments
- Marriott, Hyatt and IHG are just some of the big names investing in this concept
- The model allows owners to function under one operations team and consolidate back-of-house services
- Guest-facing elements including entrances and public areas, room designs and front-of-house staff should be kept distinct to offer travellers unique guest experiences