Hotels are adding more brands to blanket the marketplace

How many hotel brands are enough?

Hilton and Choice Hotels International are testing that question, with two new ones focused on helping travelers maintain their healthy eating, sleeping and fitness habits on the road.

Hilton’s Tempo will be the company’s 18th nameplate, and Everhome Suites will be Choice Hotels’ 12th.

They aren’t the only lodging companies to take the more-is-better approach.

Marriott manages 30 brands; Hyatt has 14. Despite the crowded marketplace, hotel companies believe there is an opportunity and even an imperative to present an array of options.

A variety of accommodation types and prices lets hotel companies present themselves as a one-stop shop for the varying needs of customers. A solo business traveler to big cities may also take her family on a beach vacation, plan a multigenerational trip or book a romantic getaway. Hotels want to offer choices for each of those needs and more, “because if they don’t have it, the customer will spend their travel dollars elsewhere,” said Bonnie Knutson, a professor at the School of Hospitality Business at Michigan State University.

Tying more brands with loyalty programs also helps the hotels lock in travelers. “The more opportunities a hotel company can offer to travelers to earn free stays, the harder it is to leave the brand,” Knutson said.

Additionally, offering a complete portfolio within one hotel family website is a defensive move against Airbnb, Expedia and other online booking sites. Sites like Expedia’s have “blurred the distinction between brands and created price wars,” according to Alina Wheeler, author of the comprehensive guide “Designing Brand Identity.”

Phil Cordell, the global head of new brand development at Hilton, said to create a new brand, a hotel needs to decide what it’s going to stand for, how it will be different from what’s already out there, and if there are enough customers who fit the target market.

Hotel brand proliferation is made possible, at least in part, by the changing financial structure of the hotel industry. The largest lodging companies have moved to an “asset light” model over the past 10 to 15 years, meaning they don’t own many of the hotels that bear their names. Instead, they franchise them, offering the owners the name, services and sometimes management. It takes significant investment to design, market and maintain each brand, but with less cash tied up in physical properties, the hotel company can spread its investments and efforts across more brands.

But with brand proliferation comes the challenge of differentiating one brand from another. That hotel in Moses Lake, Washington, offering free breakfast, parking and WiFi and an indoor pool for around $100 a night — is it the Ramada by Wyndham or the Wingate by Wyndham? Brands within the same family can end up competing for the same customer, driving prices lower.