Brands and Brand Families Matter: A Look Back 2013-2022
January 2024
Accommodation
Accommodation
CBRE Hotels Research analyzed ten years of hotel brand performance for six large public hotel companies, encompassing over three million rooms or 60% of US supply as of year-end 2022. A more comprehensive dataset, beginning in 2000, is available for purchase on our website.
Revenue per available room (RevPAR) growth for only 10 of the 49 brands held by these six companies met or exceeded the 2.9% compound annual growth rate (CAGR) of the Consumer Price Index (CPI) from 2013 to 2022. The remaining 39 brands, or nearly 80% of the sample, had RevPAR growth that either failed to keep pace with inflation or was negative.
Selecting the wrong brand can have sizable financial consequences. For example, the difference in the RevPAR CAGR between the strongest and weakest luxury brands was 7 percentage points, resulting in an 87% cumulative premium over the examination period.
Both the brand and the brand family matter. The strongest performing brand family had RevPAR CAGR of 2.9%. This compares with the performance of arguably the weakest-performing brand family, which experienced declining RevPAR CAGR of 0.1%. On a cumulative basis, the strongest brand family outperformed by roughly 30% over the 2013 – 2022 period. As of the starting point in 2013, these two brand families had RevPARs less than $6 apart, so we would not attribute the RevPAR growth difference to a variance in chain scale.
We also examined the standard deviation in the performance among the brands within a brand family. The greater the standard deviation in brand performance within one family, the less certain you can be that your brand will perform at or above the average. The brand family with the most variability in brand performance had a standard deviation nearly 3x that of the most consistent brand family. Hotel owners, developers and investors should also consider occupancy rates, loyalty programs contributions and fees, and overall performance when selecting a hotel brand.
Organically grown brands have outperformed acquired brands. Nearly 40% of organically grown brands had above-average room and RevPAR growth compared with just 17% of acquired brands from 2013 to 2022.
Contents:
Key Takeaways
Brand Proliferation Has Been Concentrated In The Upper-Price Tier
Extended Stay, All-Inclusives And Soft Brands Have Been Stand Outs In Terms Of Growth
Chains Outperformed On Unit Growth But Underperformed On RevPAR
RevPAR At 39 Out Of 49 Brands Lagged Inflation
Even Within Brand Families, Brand Performance Can Vary Materially
In Luxury, Variances In RevPAR Growth Resulted In As Much As 87% RevPAR Outperformance
The Upscale Chain Scale Shows Fewest Signs Of Cannibalisation
Economy Brands Are Showing The Greatest Room Count Contraction
Brands Developed And Grown In-House Outperformed On Unit Growth
Selecting A Brand Family Might Be Just As Critical As Picking A Brand
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Brands and Brand Families Matter: A Look Back 2013-2022
January 2024
Accommodation
Accommodation
CBRE Hotels Research analyzed ten years of hotel brand performance for six large public hotel companies, encompassing over three million rooms or 60% of US supply as of year-end 2022. A more comprehensive dataset, beginning in 2000, is available for purchase on our website.
Revenue per available room (RevPAR) growth for only 10 of the 49 brands held by these six companies met or exceeded the 2.9% compound annual growth rate (CAGR) of the Consumer Price Index (CPI) from 2013 to 2022. The remaining 39 brands, or nearly 80% of the sample, had RevPAR growth that either failed to keep pace with inflation or was negative.
Selecting the wrong brand can have sizable financial consequences. For example, the difference in the RevPAR CAGR between the strongest and weakest luxury brands was 7 percentage points, resulting in an 87% cumulative premium over the examination period.
Both the brand and the brand family matter. The strongest performing brand family had RevPAR CAGR of 2.9%. This compares with the performance of arguably the weakest-performing brand family, which experienced declining RevPAR CAGR of 0.1%. On a cumulative basis, the strongest brand family outperformed by roughly 30% over the 2013 – 2022 period. As of the starting point in 2013, these two brand families had RevPARs less than $6 apart, so we would not attribute the RevPAR growth difference to a variance in chain scale.
We also examined the standard deviation in the performance among the brands within a brand family. The greater the standard deviation in brand performance within one family, the less certain you can be that your brand will perform at or above the average. The brand family with the most variability in brand performance had a standard deviation nearly 3x that of the most consistent brand family. Hotel owners, developers and investors should also consider occupancy rates, loyalty programs contributions and fees, and overall performance when selecting a hotel brand.
Organically grown brands have outperformed acquired brands. Nearly 40% of organically grown brands had above-average room and RevPAR growth compared with just 17% of acquired brands from 2013 to 2022.
Contents:
Key Takeaways
Brand Proliferation Has Been Concentrated In The Upper-Price Tier
Extended Stay, All-Inclusives And Soft Brands Have Been Stand Outs In Terms Of Growth
Chains Outperformed On Unit Growth But Underperformed On RevPAR
RevPAR At 39 Out Of 49 Brands Lagged Inflation
Even Within Brand Families, Brand Performance Can Vary Materially
In Luxury, Variances In RevPAR Growth Resulted In As Much As 87% RevPAR Outperformance
The Upscale Chain Scale Shows Fewest Signs Of Cannibalisation
Economy Brands Are Showing The Greatest Room Count Contraction
Brands Developed And Grown In-House Outperformed On Unit Growth
Selecting A Brand Family Might Be Just As Critical As Picking A Brand
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