corporate-branded hotels like the Four Seasons and the Ritz-Carlton enjoyed annual

cross-property usage rates of 10% to 15%. “Our current strategy is really limiting
our ability to do two things—serve our existing customers better and compete
effectively with the rest of the field to attract new visitors,” Abby had told the off-
site crowd.

There was no denying the obvious

scale efficiencies royal could create
by putting all its properties under
one brand.

m
er as
co
eH w
o.
Under a corporate brand the general managers would still be able to promote their
rs e
properties’ distinctive images as they saw fit, albeit with a few caveats, Sam said. In
ou urc
fact, some standardization across properties might free them up to concentrate on
the creative stuff they loved—brainstorming new menu items or guest events. They
could worry less about staffing assignments, purchase orders, those kinds of things,
o

the CFO reasoned.

aC s
vi y re

If Lilypad’s objectives are to stay viable and create real value for the long term, it
has to pursue the global branding strategy Abigail Ross is proposing and build up
the corporate brand. The two biggest assets a hotel management company has are
its contracts and its name. With a strong corporate brand, Lilypad will be more than
ed d

just a collection of luxury experiences. The name can lend greater value to the
ar stu

company’s existing and potential peripheral businesses—for instance, Lilypad-

branded cruises or condos. And the company can be more efficient about cross-
promoting the hotels in its collection, offering personalized services to customers,
is

and buying supplies in bulk. You can’t realize all those efficiencies with a no-name
Th

company.

However, being associated with a powerful corporate brand will drive up the value
of their properties. It’s a win-win for the property owners and the managers.
sh

From under the corporate umbrella, the individual properties would also have more
success attracting global travelers. If I’m taking my first trip to China, I’ll want to
explore a new culture, but I’ll also want to be comfortable with my accommodations
in such a different environment. When I see a listing online for a place like La Plaza,
which I’ve never heard of, I’m not going to trust it—even if a travel agent goes out

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 of his way to sell me on the distinctive features and location. By contrast, when I
see a listing for a Peninsula- or an Oberoi-branded hotel, that’s what I’ll go for.
Reliability is a critical competitive advantage in the hotel industry.

I think a corporate-umbrella strategy could actually stunt rather than increase the
company’s profit and revenue growth.

Moreover, while elements of the Lilypad brand discreetly appear throughout the
properties, the company would need to undertake a large-scale, costly initiative to
put its name front and center. Ultimately, the financial risks may outweigh the
potential rewards. As Lilypad founder Betsey Hale points out, there will be critical
questions of control, consistency, and quality, because the selling points and
amenities of the hotels are intentionally quite different.

Efforts to redirect store-specific promotional dollars to a national corporate

marketing campaign alienated former May customers to the point where Macy’s

m
er as
experienced four consecutive months of falling sales last spring. The mother brand
had a negative halo effect.

co
eH w
Lilypad Hotels and Resorts could certainly create some connections among

o.
its brands; the business rationale for doing so is evident. However, Andre
rs e
needs to proceed with caution: It’s critical that any linkages don’t
ou urc
compromise the value of the individual offerings. A plan to emphasize the
corporate brand over the property brands might very well backfire.
o

The implicit promise from each property is that no other hotel in the area will
aC s

offer guests the same sort of culturally grounded travel experience. But how
vi y re

credible can that one-of-a-kind claim be if La Plaza’s “handwoven” bathrobes

are made in China and stamped with the Lilypad logo? Once you start
making branding choices that don’t ring true or that otherwise detract from
ed d

the customer experience, you’ve gone too far.

ar stu

By linking the individual properties’ websites to the corporate one, for instance,
Lilypad would be able to give customers more information about the hotels. It might
even engender a community of “brand fans.” And by forging stronger relationships
is

with travel agents and the trade press, Lilypad would be able to tell the corporate
Th

story more comprehensively than it has in the past.

If Andre and his colleagues want to emphasize the corporate brand, they need to be
clear about what it represents. They also need to remember that being part of a
sh

large corporate structure shouldn’t require Lilypad’s already successful properties to

make any sacrifices.

Instead of approaching this branding matter as a name-change question, Andre and

his colleagues need to systematically examine the corporate brand through a
couple of important lenses: customers and culture.

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 Andre and his colleagues aren’t
objectively considering the brand
as a powerful asset, there to
leverage long-term business
strategy.
Customers. It’s evident from the unfocused way Andre and others talk about the
Lilypad brand that they don’t have a clear sense of the customer. At one point, the
individual properties are characterized as feeding people’s desires and aspirations,

m
er as
which casts the individual brands in sentimental, emotional terms. But by the end of

co
the case study, Andre is thinking about Lilypad as the best little secret in hotel

eH w
management, which frames the corporate brand in terms of execution and
operations. Great brands are single-minded about what makes them different from

o.
rs e
others. To get more clarity about whether the company should be, say, niche and
ou urc
focused, it’s critical to ask, “Who are Lilypad’s current customers, and what will
future customers look like?”
o
aC s

If Lilypad’s senior managers increase the role of the corporate brand, they will also
vi y re

create certain expectations among customers. And if the business isn’t aligned to
deliver on those expectations, the result will be, at best, a wasted name-change
investment—and at worst, deeply unhappy customers.
ed d
ar stu
is
Th
sh

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