Rebranding

Rebranding

From the hotel owner’s perspective, affiliating with an appropriate brand with the correct position can allow them to leverage on the brand’s established name to increase awareness of their property and market value. This is especially useful if the hotel is rebranding in reaction to changes in market demand or market segment. Effective hotel branding can also increase the level of reliability and risks associated with the hotel perceived by the consumer, and positively influence their consumption behavior as consumers will tend to purchase from brands they trust and are more familiar. In turn, owners can enjoy stronger customer loyalty and charge higher rates for greater financial returns.

In line with the growing trend of branding in the hotel industry, researchers have also given more attention to the concept of hotel brand. Many suggest that the two are closely-linked; and in fact, some studies have shown that hotel brand equity correlates significantly with a company’s financial performance. More specifically, studies have proposed that strong hotel brand equity can contribute to improved financial performance because it can positively influence consumers to book with a particular.

Aside from influencing consumer consumption behavior, 10 existing literature has also proposed for links between brand equity and customer retention or customer equity. Effective branding strategies can increase customers’ satisfaction and strengthen customer loyalty, which in turn contribute to a company’s financial performance. While appropriate branding and positioning has the potential to yield hotel owners all of the abovementioned benefits because of its impact on the hotel’s brand equity and customer loyalty, this is not always the case.

Taken together, these statistics allude to the importance of understanding the effects of branding or re-branding on a hotel’s performance; without which could lead to a potential demise of the property when timely...