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Relaunching Hotel Brands: A Case Study

A global hotel company relaunched one of the world’s largest hotel brands by significantly enhancing the brand’s offerings and launching new marketing initiatives.

  • Working with APT, the company quantified the impact of a brand relaunch on RevPAR, return intent, hotel net operating income, and other key performance metrics.
  • Based on the result of the analysis, hotel management modified the brand offerings and increased both the ROI and guest satisfaction of the relaunch, as well as franchisees’ support.
  • Implementing these lessons generated tens of millions of dollars in net present value to hotel franchisees.
The Company

A global hotel company franchising several brands across thousands of hotels

The Challenge:

Management was concerned that a popular but aging brand’s financial performance was on the decline. The target guest segment’s perceptions of the brand were not aligned with the brand’s aspirations, and management believed that an inconsistent guest experience was damaging the brand’s preference and performance. 

As this concern grew, management developed a strategy to relaunch the brand, which included significant investments in renovated lobbies and other visible features, as well as retraining hotel staff to achieve a high quality guest experience. However, management’s early attempts to quantify the impact of these expensive changes produced inconclusive results and led to disagreement among decision makers.

The Solution:

By working with APT’s Test & Learn™ technology, hotel management compared each post-launch hotel with a carefully matched set of pre-launch hotels in order to isolate the lift from the relaunch strategy. In addition, management measured the impact on RevPAR and ROI, as well as the lift in guest satisfaction from individual elements of the brand offering (e.g. employee training). Hotel management reevaluated the specific components of the relaunch, especially the elements requiring capital investment, to improve its preference among its target segments and to optimize RevPAR, NOI, and ROI for the company and its franchisees.

Management and franchisees continued the relaunch program while working with APT to carefully monitor its results. As more and more hotels demonstrated attractive ROI, the credible positive results motivated increased franchisee participation, and the implementations were expanded and accelerated. Ongoing monitoring of the relaunch showed sustained improvements in financial performance, customer satisfaction, and other key performance metrics.

As the effort achieved sufficient scale, the hotel chain launched a multi-market advertising and marketing campaign to motivate trial and increase loyalty among target guests. Continued measurements confirmed the investment’s positive results.

The Results:

Management continues to rely on APT's Test & Learn™ solution to identify components of the program to be undertaken at each hotel given each location’s unique characteristics and to identify and evaluate the most appropriate marketing messages and channels. The organization’s decision to expand this offering and successfully generate momentum has produced many tens of millions of dollars in net present value for franchisees.