酒店品牌的生命周期：霍华德·约翰逊（Howard Johnson）的兴衰

Euan McLeish+81359629611 euan.mcleish@bernsteinsg.comJignanshu Gor +912268421494 jgnanshu.gor@bernsteinsg.comLucaSolca+41582723126 luca.solca@bernsteinsg.comNadineSarwat,CFA+442076766849 nadine.sarwat@bernsteinsg.comTrevor Stirling+44 20 76767521 trevor.stirling@bernsteinsg.comWilliam Woods+4420 76766806william.woods@bernsteinsg.comAlexia Howard+19173448453alexia.howard@bernsteinsg.comAneeshaSherman+19173448457 aneesha.sherman@bernsteinsg.comCallum Elliott,CFA,ACA+442076767183 callum.elliott@bernsteinsg.comDanilo Gargiulo+19173448475 danilo.gargiulo@bernsteinsg.com When was the lasttimeyoustayed (orate)ata Howard Johnson? that reinvent their brand portfolio atthe right time look set tooutperformoverthelongerterm. Arguablytheoriginatorofthehospitalityfranchiseinthe1940/50s,thebrandwentfromapeakofmorethan1,500locations inthe1970s (nb 30 years afterpost-WW2 relaunch)to~120today.HasAmericafallen outof love with hamburgers,ice-creamandcolorfulhotel rooms?It doesn't seem so-hospitality brands simply havea lifecycle.Crowne Plaza also illustrates this well -Crowne Plazalaunchedin1983asHolidayInnCrownePlazaandrebrandedtoCrowne Plaza Hotels in 1994.In 2019,we wrote a note claimingfixing Crowne Plaza would be like launching a new brand (IHG:IHG's problem child.Turning around Crowne Plaza would be likelaunching a newbrand).Butagain maybeCrownePlazahad simplyhad its time.In the US, the pipeline peaked in 2008 at 43 hotels,25yearspostlaunch;total hotelspeakedat210,28yearspostlaunch. Even factoring in that these peaks coincided with the pre-GFC hubris and the post-GFC decline, this trend of a pipeline peak25-30yearspostlaunchandaroompeak~30-35yearspostlaunchisremarkablyconsistentacrossmajorUshotelbrands.CrownePlaza currentlyhas 429 hotels globallyand a USpipelineof5hotels.Luxurybrandscan achieveheritage,mainstreambrandscannot and will eventually run out of steam and shrink. takecertain liberties on assumed launchdates andwhichbrandswe chooseto look at.Forexample, QualityInn (Howard Johnson'sbiggest rivalforfranchisepioneer)achieved growth wellbeyond 30years but enjoyed a brand split and reinvigoration in the 1990s thatfew others seemto havepulledoff.Overall, howeverwe expecttheconclusions hold weight. (in the 60's) Weoftengetaskedwhyhotel groups havesomanybrands,andnormallyofferananswerofcustomersegmentationandopportunitytoperfectforhigher returns,but we supplementthis with an argument that this is also a necessity -brands havea lifecycleand everybrandpassing throughthepeak hasto Source: Florida Memory EXHIBIT 2:Acrossmany of thelargest hotelbrands in the US the numberof hotels has tended topeak at~30 years THEHOTELBRANDLIFECYCLEEarlygrowth -New (asset light) hotel brands are difficult to create. Brandownershavetoconvincethirdpartiestotakearisk andinvest capital to open new hotels under their brand, often withlittleevidence of priorbrandperformance.Assuchmanybrandsmoveslowlyatfirst,addingasmall numberofhotelstothepipelineinitially, which slowly flow through to supply, before accelerating- for example Hilton's Tru, launched in 2016took ~24 months forthe numberofhotel roomstomeaningfully inflect upwards.Hereconversionbrandscanoffermoreinitial momentum,withamuchlowerinitial investmentandfarshortertimetoflowthroughfromthe pipeline. Although the shape of the early stages of a brandslifecyclecanbesimilar,brandscanvarydrasticallyinperformanceComparingthefirst~8.5years ofgrowthforHilton's Truand IHG'sAvid shows the different growth paths between to fairly similarbrands -the discrepancywas apparent after the first 3years of thebrands'existence. Hiltonbrands-Room countrelativetoroomcountafter3yearsoflaunch tendtofacea steadyupwards trajectory,with arelatively consistentnumberof hotelsadded annually,until atroughly3Oyearsthetotalnumber of hotels begins to peak, with the pipeline soon to follow,tendingtopeak5years later at~35years.After30years brandstypically then see a decline, stabilizing into the future well belowthe initial peak.However,the stabilized range is not homogeneous -Comfort Inn has seen its footprint stabilize at 80%of its maximum,while Holiday Inn has settled at ~40%. There are somekey reasons we seethat wouldexplaina brand seeing rooms peak after25-30 years:· betterreviewscoresfromguests inthemainstreamsegments.As hotel brands age, the hotels within their brand will begin toshowware andtear,and if not properlymaintained by owners,will eventually weigh on the perception of the brand.The olderabrandisthegreaterthelikelihoodofolderhotelsunderthebrand, eventuallyweighing on the RevPAR even newhotels candeliver,meaningincrementaldevelopersarelikelytomovetoother brands in search of a better ROl, and the more likely hotelswill need to be removed to maintain brand standards. are not fixed, yet brand standards tend to be relatively morestatic.Forexample,consumerpreferenceshaveshiftedawayfrom the offerings of a full service'hotel (an on site restaurant,meeting spaces,amannedfront desk,etc.)and have insteadshift