• Brand launches shows brand building still in infancy

Hotel operators may claim to be turning themselves into focused brand and management companies but two players that should know better demonstrated in the last week that there is still a way to go.

Hilton Hotels Corporation said it was turning its Waldorf=Astoria into a brand and Starwood Capital said it was launching a new international luxury brand based on Hotel de Crillon in Paris.

HHC is arguably the worst offender. Despite owning one of America's leading franchise operations in the US and no less than two existing upscale brands (Hilton and Conrad) it still feels the need to create the Waldorf=Astoria.

According to the press release the Waldorf=Astoria designation will be for properties that have architectural significance, unique décor and original artwork, historic or landmark status and a reputation for product and service excellence.

That pretty much covers almost every upscale hotel in the world so there's a lot of potential converts to aim for.

The first three hotels to adopt the brand are resorts operated by CNL, the second biggest REIT in the US. It might seem Old World to point out, but the Grand Wailea Resort was only built in 1990 and this hardly qualifies as historic.

Given that the Conrad brand is an anachronism already, it seems odd that HHC wants to add to the confusion. Although there was great fanfare about reaching 50 properties for the Conrad brand just under a year ago, it is not at all clear what Conrad brings to the party, other than being part of the Hilton family and not a Hilton.

Dieter Huckestein, who was only installed as CEO of Conrad a year ago, is shortly to retire. HHC should think about doing likewise with both the Conrad and Waldorf=Astoria 'brands'.

But part of the reason neither Conrad nor Waldorf=Astoria will be dumped is short-term opportunism versus the longer-term strategy of brand building. A franchise fee now is more compelling than a return on establishing a stronger brand in the future.

And so it is with Barry Sternlicht and Crillon. Few would argue that Hotel de Crillon is an historic property but it is certainly questionable whether it can grow into a worldwide brand.

Sternlicht says he wants to do with Crillon what he did with St Regis when he was at Starwood Hotels. And that was to grow to a dozen hotels in 10 years. This rate of growth is hardly fortune making stuff and it was achieved with the help of the network of an established operator of upscale hotels.

Ever the opportunist, Sternlicht says future Crillons will feature a Taittinger champagne lounge and Baccarat inspired bar, both brands he bought with the Societe du Louvre acquisition.

Perhaps Sternlicht believes he can achieve a better price for the owned hotels within Concorde if they remain unencumbered with a recognised international brand. If so, he is betting that current trends will reverse. It is a brave move.

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