These seem to be heady days for the hotel industry. In the past two months, new hotel brands have been multiplying like dandelions gone wild. With the development pipeline at an all-time low, the influx of new product sounds downright intoxicating. But how well these new entrants fare in an already brand-manic industry, say the experts, is anyone's guess. "Rolling out a brand takes a while. It will be interesting to see how many properties are actually built, because the parent company usually has to seed the first 10 to 15 before they can attract franchisers," says Robert Mandelbaum, director of research information services for Atlanta-based PKF Hospitality Research.
Renowned New York hotelier Ian Schrager, founder of Morgans Hotel Group Co., began the current spate of activity -- and turned heads in the process -- when he said he would unveil two new trendy hotel chains -- one luxury, the other more urban and large scale. Details on either line remain skimpy. Schrager, who is creating the nascent Edition hotel chain for Marriott International, would say only that the first property in his new brands would be Chicago's Ambassador East Hotel, which he formally purchased in April 2010; the property currently is undergoing a multimillion-dollar renovation. Considering its location and size, we're betting it's his urban line. According to sources, that hotel is still on schedule for its grand unveiling this fall, and bidding is underway on other hotels in London, Los Angeles and Miami. Stay tuned.
Last month, Hilton Worldwide debuted its new midpriced, extended-stay brand, Home2Suites by Hilton, the company's first new brand in 20 years. "Home2 Suites is a new hotel for a new economy and a new kind of traveler," said Christopher Nassetta, Hilton Worldwide president and CEO. The brand, announced back in 2008, features one-bedroom suites, a lobby that doubles as a social hub -- an unusual feature in an extended stay product -- complimentary wireless, a breakfast area and a fitness center. First up is the 118-room Fayetteville Home2Suites in North Carolina, but Hilton has plans to add another 75 properties, including one each in Salt Lake City, Baltimore and San Antonio.
Also launching a new brand last month, albeit a very high-end one, was Hong Kong-based Shangri-La Hotels and Resorts, which debuted its new five-star Kerry Hotels with the opening of the 574-room Kerry Hotel Pudong Shanghai in China. The new entrant features the usual line up of high-end amenities, including 24-hour butler service; 11 live show kitchens presenting an array of Asian cuisine; a classic brew pub, complete with three-story-high steel brewing vats; a 6,000-square-foot sports club with an indoor pool, and 78,000 square feet of meeting and event space. The property's day spa will open this April. "Kerry Hotels will appeal to the business traveler who prefers a vibrant and relaxed environment without compromising on service or quality," said Greg Dogan, president and chief executive officer of Shangri-La International Hotel Management Ltd., in a statement announcing the new brand. "The hotels are contemporary in style and provide a seamless link between business, entertainment and recreation." Shangri-La says it will open its next Kerry in Beijing, sometime next year.
If you're wondering whether the industry really needs yet another lifestyle brand, keep this in mind: "New brands are created because hotel companies need fresh ideas to sell to franchisees and customers. That's how they make their money," says PKF's Mandelbaum. "It doesn't always mean they will be around forever, or even get built."