In such circumstances the brand name is gaining its especial importance for being attractive for the consumers who associate their favorite brand with the certain characteristics. In particular it is true for well-known brands – big international hotel chains which recently increase importance as an organizational form in hotel industry (Ingram & Baum 74). Moreover, the trend over the last century suggests that chains will eventually come to dominate every service industry that is characterized by some direct contact between customer and organization, as in hospitality industry (Ingram & Baum 70).
When a firm enters a foreign market various business functions can be undertaken. Some may entail higher risks of local partner opportunism; some can be easier to transfer to local partners. Within a particular function (e. g. , marketing), the entrant should undertake some activities (such as branding), whereas the local partner can more easily perform others (such as pricing). Chain-owned, unaffiliated hotels are owned and operated under a common brand name as part of a corporate chain, but are independent of either a third-party management company or franchise system.
Thus this mode offers the entrant the highest level of control over the hotel’s marketing and operations (Brown, Dev & Zhou
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Several studies proved that brand name has greater feature importance for services than for products, given the intangible, abstract nature of services and the fact that the name of a brand might serve as reassurance in the evaluation process (Crimmins 17). The Role of the Brand in Successes of the International Hotels Since the 1950s we have seen the steady rise of the hotel chains throughout the world. In the UK, hotel chains have had less of an impact because of slightly different demand characteristics, for example, the initial emphasis being more upon overseas tourism than business usage.
But even in the UK we have recently witnessed a dramatic increase in the number of ‘lodges’ – motel-type operations on or near major roadways. Recently large operators such as Whitbread plc were opening approximately two new lodges a month in the UK, while Forte plc, the UK pioneer of the concept, now operates over a hundred lodges and claims an occupancy rate of 95% during the summer months. Moreover, recent expert opinion predicts that up to 18,000 ‘Fawlty Towers’ rooms in the UK in the nearest future will be replaced by 10,000 rooms in chain-operated budget hotels (Taylor, Smith & Lyon 113).
These hotel chains usually are internationally well-known brand names, and this testifies that successful branding contributes significantly to their promotion and expansion overseas. For instance, the Marco Polo Group, a dominant hotel brand in Asia Pacific, is revving up to expand with around five to seven more properties in the next few years to further intensify its regional status. Marco Polo is a topnotch hospitality brand that excels amid the Philippines dynamic East-West fusion, China’s old-world charm, Hong Kong’s cosmopolitan set-up and Vietnam’s traditional milieu.
In the Philippines, the Marco Polo Davao brand has become a high-status corporate address and a crucial travel trade hub in Mindanao (Foz n. p. ). International hotel brands implement innovation in the hotel industry which include architecture, guest amenities, and promotional programs. Promotional programs have appreciably increased the occupancy rates on weekends, which challenged not only Hilton but other hotels as well, especially those situated in downtown areas of metropolitan cities.
Hilton Hotels have maintained a worldwide image for spectacular accommodations. Name recognition is such that the theme “Hilton, it’s all in the name” can be used. The growth of global tourism has provided Hilton with increased opportunities in the 1990s. The Holiday Inn, although positioned in the midprice market, has targeted its Crowne Plaza Hotels to the upper-scale market, and its Holiday Inn Express motels are positioned against the limited-service Hampton (Michman & Greco 205).
Hilton represents an indicative example how successful branding contributes to occupying different market niches and expanding overseas. The Marriott has also targeted several different markets under powerful brands from luxury (Marriott Suites) to traditional (Marriott), to family lodging (Residence Inn), to business travelers (Courtyard), to economy (Fairfield Inn) (Michman & Greco 206).