initial challenges in rolling out the
brand so that the brand has a legitimate
opportunity for long-term success.
BRAND INVESTMENT – Although
existing hotel brands typically allocate
their overall brand marketing costs to
their hotel owners, developers for new
brands will often not be willing to bear
the costs of ramping up the marketing
efforts of the new brand both because
of the significant upfront costs to launch
a brand and the lack of a sufficient
portfolio of hotels within the new
brand to reasonably bear the allocated
costs. Also, the brand may be looking
to invest marketing dollars well outside
the locales of its initial branded hotels
in order to extend brand awareness, and
to create interest for new developers to
build branded hotels in other markets.
That said, developers of initial brand
hotels also benefit from such initiatives,
especially if their hotels are located in
gateway markets, so such developers
may be more motivated to contribute to
marketing campaigns that do not have an
immediate impact on their local market.
DEVELOPING VISION – Another
consideration for new brands is that
the brand standards may not yet be
fully defined or may be evolving at the
time of the initial project development.
This may allow an initial developer
to be part of developing the brand
vision or, alternatively, may allow the
developer to request some concessions
or changes to the standards for the
project. However, this may also cause
frustration between the brand and the
developer as there is not a defined set
of standards for the brand to point
to in negotiating the agreements or
requesting capital expenditures. This
may be true even if the brand is already
established in another market outside
the US as some changes to the brand
standards may be necessary to adjust the
brand for the US market or to comply
with US laws. To avoid unnecessary
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