Dual-branded hotels are a trend that may be here to stay. In just the past few years, major hotel chains like Hilton have opened additional dual-branded properties in America, and other industry news sites report there will soon be an increase in Europe.
In this guide to dual-branded hotels, we’ll review their definition, benefits, and history. Explore real world examples and the pros and cons hotelier’s need to know before considering their own dual or multi-branded property.
What are dual-branded hotels?
A dual-brand hotel is a type of property that houses two separate hotels. Instead of having one brand for each type of hotel, the concept allows the two to cater to the needs of a specific demographic.
This method of operation cuts costs by sharing resources and expenses. For example, many hotels have dual-branded rooms that cater to both business travelers and families on vacations.
These properties also usually have separate check-in and reception desks. They will, however, share amenities such as pools, spas, fitness rooms, and business centers.
In order to determine whether or not a dual-branded hotel is right for their business, the management team will typically conduct a build-up analysis. A build-up analysis is a process that identifies the primary market area and the various brands competing in it. It quantifies the existing demand in the market and forecasts future demand for each of their two potential brands.
The goal is to maximize the profitability of dual-branded hotels by working in concert with one another. This is usually done by allowing the developer to offer two separate products while maintaining the same guest profiles.
How dual-branded hotels came to be
In the early to mid-2000’s, the success of the boutique hotel concept began to evolve and laid the foundation for the rise of the dual-branded hotel. The boutique hotel concept proved that appealing to one highly-sought audience could be just as—or possibly more—profitable than simply appealing to all types of travelers.
Once that was established, hoteliers sought to duplicate the process with other audiences at those very same properties. Hotel brands soon learned that they could dramatically increase their potential leads by tweaking their existing structures to appeal to a second audience.
Doing so allowed them to make their properties more profitable through more informed strategies. The chief among those informed strategies (and the entire point of dual-branding a hotel) is opening up sales and marketing to a new key audience segment.
As a result, it’s no surprise that the concept of dual-branded hotels has gained momentum in recent years. And thanks to technology, the trend has also been influenced by the increasing sophistication of audience segmentation. With the help of advanced hotel revenue management and marketing tools, brands can now identify and target higher ROI groups that they wouldn’t have been able to pinpoint before.
Pros & cons of dual-branded hotels
Pro: Dual-branded hotels are cost effective when it comes to initial construction
A dual-branded hotel allows for shared features, like meeting rooms and fitness centers, while eliminating the expense of constructing multiple towers for each brand. While distinct brand identities can be created within a single structure, only a single design and construction program is needed to implement these components.
Con: Existing structures may require costly development or updates
A site's potential development depends on the demand trends identified within the local area. This assessment is typically done prior to the construction of a hotel. Once it’s been built, switching from a single brand to a dual brand may require additional development. Not to mention aesthetic changes such as hotel paint colors, furniture, and decor that can quickly add up.
Pro: Dual-branded hotels appeal to a wider audience
Why have one hotel brand people love when you can have two? While most brands appeal to a wide range of travelers already, dual-branded hotels can get crystal clear on which segments they’re the perfect fit for.
Con: Dual-branded hotels may cost more to market
Teams will have to create a new campaign for each audience across all channels. This may double or even triple their workload and overall budget just to stay competitive with nearby properties who are targeting just one of those groups.
Additionally, there are design issues that need to be addressed. The two brands need to be distinct enough that it’s clear they’re separate but cohesive enough that they don’t clash. Creating a separate identity for guests can be challenging since it affects the overall operation and design of the hotel.
Pro: Most single-brand hotels have the ability to become dual-brand hotels
Having a strong and distinct brand makes it easier to branch out to related concepts or themes. In order to create an additional brand, hoteliers must access their marketplace, look for gaps they naturally fill, and consider the pros and cons of this particular brand combination.
Con: Marketing strategy and execution is complicated for dual-branded hotels
Due to the complexity of the hotel industry, selecting which audiences to target is often influenced by various factors such as geographical location, brand recognition, and licensing fees. Dual-branded hotel marketing teams must reach the right combination of target audiences or risk brand erosion.
Pro: Dual-branded hotels make strategic use of land
Some of the most advantageous locations for hotels are those with high land costs. By choosing a location that fits two different brands, you can save money while still enjoying the same quality of service all without paying for additional land.
Con: Location will impact the second brand
Even with extensive market research there are instances where a second brand fares worse than your first one in that location. Just because the option is there, that doesn’t mean it’s the best choice. Assess your dual-branded hotel idea to see whether or not you’d be willing to invest in it if it were a single-brand hotel before moving forward.
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Pro: Staffing is simpler for dual-branded hotels
One hotel may be able to share certain personnel that would otherwise be used by another property. This allows one hotel to address higher demand without increasing its overall staffing levels.
Con: Larger teams cost more
Even if the majority of your team can service both hotel brands, you may still need to expand to reach the manpower needed for both. That comes with costs such as additional hiring, training, brand education.
Successful examples of dual-branded hotels
Most dual-branded hotel developments are focused on dense urban markets with limited supply and demand. However, some successful dual-branded hotels are located in airports and suburban markets. Here are a few of shining examples of what hoteliers have done with the dual-branded hotel concept.
1. Hilton
In 2021, Hilton welcomed two additional dual-branded hotels to their portfolio including the Hilton Garden Inn/Home2 Suites. Both the Inn and Home2 Suites hotels have their own unique food options which are reflective of the audiences they hope to attract.
The Hilton Garden Inn side features its own restaurant with a full room service menu plus cooked-to-order breakfast and dinner options. Meanwhile, the all-suite accommodations at Home2 Suites are fully equipped with kitchens that are stocked with high-end appliances.
Both brands do, however, share features such as a full-service restaurant.
2. IHG
IHG also opened an additional dual-branded hotel in 2021, combining the EVEN Hotels with the Staybridge Suite.
The EVEN is the first and only hotel brand that offers guests the option to feel nourished, rejuvenated, and relaxed. Given its proximity to the world famous MayoClinic, it’s no surprise that health is a large part of their brand.
With a variety of options for guests, including a fitness studio, dedicated work areas, and an award-winning café, EVEN Hotels is the place to be.
The Staybridge Suites are designed for guests who are staying in an extended stay. These rooms feature a variety of features and amenities, such as work zones and relaxing areas, and fully-equipped kitchens.
Together, these two brands provide a hotel dedicated to wellness for both short- and long-term guests.
3. Marriott
Marriott’s most recent dual-branded addition is the Residence Inn and SpringHill Suites. Both brands look to reach business and leisure travelers, so it was a natural fit.
The Residence Inn side distinguishes itself with multi-bedroom units complete with mini offices, fully equipped kitchens, and upgraded linens. The SpringHill Suites, on the other hand, offer more traditional suites and guest rooms while still separating the living room and sleeping areas.
Both brands aim to give guests a place to work and relax without sacrificing the quality of the experience.
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What is a multi-branded hotel?
A multi-branded hotel is a hotel with two or more hotel brands on one property. This means that all dual-branded hotels are considered multi-branded hotels. However, a multi-branded hotel with three or more hotel brands on one property would obviously not be considered a dual-branded hotel.
Sometimes a multi-branded hotel is built by the same firm. Or the brands may all share the same building shell. Either way, they all qualify under the definition of a multi-branded hotel.
Over the past couple of years, multi-brand properties have exploded. Back then, dual-branded hotels were uncommon, but many properties have started using more than one brand since.
The biggest challenge when choosing between a multi-branded hotel plan or a dual-branded one is finding brands that are a good fit. The complexity of choosing the right brand can often make it difficult to come to a decision.
When two companies are co-located, it is important to consider all of the factors involved in choosing the right brand. But throw one or more additional brands in the mix and you’ve got some even more complicated analysis to do.
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