Risks And Rewards Of Extending A Luxury Brand

In the last couple of weeks, leaders of two luxury lodging brands discussed expansion plans — and looked at the world in very different ways. 

At a press event, Chris Hart, who heads up the Americas for Four Seasons, talked about ambitious expansion plans and asserted, “There are not and will not be Two seasons or Three Seasons hotels. We will stay with only one brand and try to have the best hotels in the world.”

A day later, Robert Warman, CEO of Langham Hotels, discussed the company’s equally ambitious expansion plans which calls for two additional brands — Cordis and Eaton — the former a four-star brand and the latter a lifestyle brand that Warman says will bring new wrinkles to that crowded market. More, Langham divides its core product into two: Langham, which denotes a traditional property; and Langham Place, which denotes a contemporary hotel. Warman said the two designations are meant to “manage the expectations” of guests.



Brand extensions have been common in every direction in the last few decades. Early on, economy hotels aimed to “brand upward” by tacking on names like Plaza to mark a more upscale product; and Holiday Inn tried a “Select” designation. More often than not consumers ignored these subtleties.

However, there have been successes. Holiday Inn Express, which perhaps is easy to understand as a more streamlined Holiday Inn, has seen explosive growth. And Best Western claims success with its Plus and Premier designations, which are more categories than sub-brands.

This is less-charted territory at the luxury level. Ritz Carlton introduced its Reserve brand for boutique resorts a couple of years ago and is growing that slowly. 

One interesting brand extension happens with “one-hotel brands” like Waldorf-Astoria, a one-of-a-kind hotel for many years until the name became attached to multiple hotels and resorts — a dicey challenge.

And there are brands like Peninsula (much smaller) and Mandarin Oriental that seem to take the Four Seasons approach of staying focused on a single brand.

It’s tempting, of course, to take a name that stands for the best and making the most of it. Of course, there is tremendous danger in not only seeing the extension fail but doing damage to the core brand.

Langham is taking less of a chance with its “Place” designation and by creating other brands with different names. Still, press materials and booking systems clearly associate Cordis with Langham — and that will be the case as well with Eaton. 

Like all other branding initiatives, doing it right is probably what counts the most. No brand extension should be gone into without along and careful consideration of the possible consequences. The damage can be permanent. 

But brand extension and expansion will always be tempting once a brand has established itself successfully. Even Four Seasons, so long and fiercely protective of its hotel brand, launched its Four Seasons Jet recently, offering trips on a private jet that made the company not only a provider of air service but of tour operator services as well.

That product is clearly not impinging on the core hospitality product. But there is always some risk involved if delivery on expectations is not achieved.

As is often said, a brand is a promise and a promise unfulfilled is the beginning of a weakened brand.

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