Despite announcing earlier this year to open 30 new luxury hotels, Marriott’s portfolio drops to second place as the value of its brands in the Brand Finance Hotels 50 ranking decreases by 30 per cent, giving way to Hilton…
As luxury brands scramble over one another in the battle for being the best, there has been a change in the tables. Reporting a 17 per cent growth, Hilton now becomes the world’s most valuable brands in the Brand Finance Hotels 50 ranking.
The hotel group, which owns brands such as Homewood Suites, Double Tree, and Hampton, has extended its lead as the world’s most valuable hotel brand and, according to Brand Finance, has overtaken Marriott’s. Hilton’s brand value growth (up 17 per cent to US$7.4 billion) was largely driven by strong revenue increase over the last year, cementing the brand’s leadership position in the industry.
Meanwhile, Marriott suffered a reduction in brand value (down eight per cent to US$5.0 billion) and its brand strength dropped from AAA- to AA+. Marriott has faced several challenges in the North American market from hacking scandals to persistent problems with its loyalty schemes. At the same time, the combined value of Marriott’s brands within the Brand Finance Hotels 50 ranking decreased by 30 per cent, giving way to Hilton’s brand portfolio to claim the title of the world’s most valuable.
“Hilton’s strategic approach to brand growth has allowed it to extend its lead as the world’s most valuable hotel brand,” said Savio D’Souza, Valuation Director at Brand Finance. “At the same time, endorsement from the flagship brand has rendered benefits across the portfolio as Homewood Suites, Double Tree, and Hampton have seen their brand values sore. In its centennial year, Hilton is well-positioned for another hundred years of success.”
“Hilton’s brand value in the top 50 ranking is concentrated across six brands.”
Hilton Worldwide Holdings achieved overall brand value growth of 41 per cent. Hilton’s brand value in the top 50 ranking is concentrated across six brands, up from five in 2018, all strongly leveraging the valuable Hilton brand name and each recording solid growth this year. Hilton has continually committed to its relentless expansion programme and with thousands of new rooms and hotels in the pipeline, the company shows no signs of slowing down in the coming year.
Marriott has not fared so well, with four of its brands dropping out of the Brand Finance Hotel 50 ranking this year. With one new entrant, Marriott now has twelve brands in the ranking, many of which have nevertheless decreased in value. Marriott’s recent announcement of entering the home-rental market however, is a promising move to take back market share from Airbnb and could contribute to an uplift in brand value in the coming year.
The Hilton and Marriott portfolios remain well ahead of third-ranked Wyndham, which also suffered a drop of eight per cent in brand value to US$7.3 billion.
The three hotel brands to grow the fastest in value this year all come from Hilton’s portfolio, and each contributed to its overall growth. Its impressive performance was led by Homewood Suites (brand value up 99 per cent to US$0.8 billion), followed closely by Double Tree (up 79 per cent to US$2.1 billion) and Hampton (up 78 per cent to US$3.2 billion). This growth allowed the latter two brands to reshape the ranking’s top 10, with Double Tree jumping from 17th to 7th and Hampton rising from 10th to 5th place over the past year.
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Alongside revenue forecasts, brand strength is a crucial driver of brand value.
“Mercure has claimed the title of the world’s strongest hotel brand.”
According to these criteria and scoring high in Brand Finance market research, Mercure has claimed the title of the world’s strongest hotel brand, significantly improving its Brand Strength Index (BSI) score from 75.7 to 86.2 out of 100 and recording a brand rating upgrade from AA+ to AAA. Mercure is also the most valuable brand in Accor’s portfolio, with nearly 800 hotels. The brand has continued to make several acquisitions through its scheme of franchise growth.
Alongside analysing the world’s biggest hotel brands, Brand Finance also ranks the top 10 most valuable brands in the wider leisure and tourism industry.
Royal Caribbean International has narrowly retained its position as the world’s most valuable leisure and tourism brand, with its brand value remaining steady at US$3.8 billion. The brand reported strong financial results in 2018, and with demand high in the cruise industry, Royal Caribbean are on course for future growth.
Meanwhile, second-ranked TUI (brand value up four per cent to US$3.7 billion) substantially closed the gap to the ranking’s leader, only just falling short of overtaking Royal Caribbean.
The fast-growing China International Travel (up 70 per cent to US$3.7 billion) has come third this year, up from 5th in 2018. China International saw a significant increase in its valuation due to a surge in forecast revenue in coming years as the Chinese tourism market continues to develop with unprecedented speed and scale.
The fastest-growing brand in the ranking also comes from China. Happy Valley almost doubled its brand value in a single year (up 97 per cent to US$2.0 billion).
The brand portfolio analysis is based on the Brand Finance Hotels 50 ranking and does not take into account less valuable brands which have not been included in the ranking.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand Strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Hotels 50 2019 report.
Main image credit: Hilton Amsterdam Airport Schiphol