What do the 2017 Oscars Say About the Hotel Business?

We all know the Oscars are a fashion event and a political contest, in addition to being an awards ceremony based on merit. Provocative comments are often made, and newspapers and social media enthusiasts delight in discussing (and criticising) the entire four-hour affair.

What strikes me about this year’s contest, however, is the studios behind the films. During the Golden Age of Hollywood, the six major studios (Walt Disney, Warner Bros, Fox, Universal, Columbia and Paramount) controlled the vast majority of box office revenues and major awards. Today, they still account for the majority box office takings across North America — but when it comes to Oscar nominations, it looks like indies have them beat. The breakdown for 2017 is as follows: 

  • 41 nominations for Indie films
  • 36 nominations for “mini-majors” (not traditionally a big player, but commands a significant market share)
  • 34 nominations for the Big Six

 When I saw these numbers, my thoughts turned to the hospitality industry. The metrics of success in our comparably humble trade are, of course, somewhat different to those of the film world. We do have awards from magazines like Conde Nast and Travel + Leisure, but these usually focus on the luxurious and exotic. In Australia we have awards nights for the Tourism Accommodation Association (TAA), the HM Awards, and of course the state and national tourism awards which are the closest thing we have in Australia to the Oscars. Internationally there is the World Travel Awards which is also close to the Oscars, especially as there is much lobbying and jostling for position. 

If we’re honest, though, profit (not statues) is what hotels are about. In this way, big hotel brands are just like film studios. As long as the Big Six are commanding the lion’s share of the cash, they’ll be happier to let the statues go to smaller studios. But when being an independent or boutique becomes profitable in certain markets, and when indie properties start to make inroads in the public perception of quality (and thus affect the market dominance of bigger players), branded hotels react in a subversive yet predictable way: They start buying up boutiques, or creating new ones. They may engage in what’s known as “soft branding” whereby they take over an unbranded hotel and market it via their system. Some of these include Marriott’s Design Hotels and Autograph Collection, Hilton’s Curio and Tapestry collections and closer to home there is the TFE Hotels Collection. 

And then there is the absorption of smaller competitors (or creation of smaller ones) to provide some boutique options which has been going on for some time. This article — published by Skift back in 2014 — lists all the various boutique brands that were being bought up or launched by major hotel brands at the time. Hyatt launched Andaz, Hilton announced Canopy, Marriott’s AC and Moxy, and so forth. The author then asks the question: “What does a boutique hotel even mean anymore?” 

By way of answering, several good points are made. That millennials are increasing demand for individual and unique travel experiences, and are using those experiences to build “social equity.” That the wide availability of information has illuminated the dim corners of the world and made people less afraid to try new things. That a sharp focus on brand consistency, once the gold standard of hotel marketing and development, is now seen as missing the point. In the era of AirBnB, unique experiences dominate. 

Branded hotels cannot fight the current, so they swim with it. They transform the idea of boutique hotels by building and owning whole chains of them. 

The major Hollywood studios have done the same thing. All of them control fistfuls of independent/arthouse film companies. Why? Because interesting things are happening out there on the fringes. People are genuinely enriched by the experiences flowing out of independent film studios. This year’s Academy Awards reflect as much. 

The question of whether an independent studio owned by a major studio is actually independent is worth asking. In some cases, such independents have as much or more power than their parent companies, at least in terms of creative decision-making. The major players recognize that the spirit of independence cannot be feigned or forged — only nurtured. 

In the same way, travelers might ask whether staying in a Radisson Red or Canopy by Hilton is really the genuine local experience they want. To the extent that these “branded boutiques” fail to hold water, big hotel brands may look for ways to increasingly dilute and hide their brand affiliations, rather than showcasing them. As in Hollywood, the line between major player and true independent may continue to be blurred. (This is also true in the funeral business where a handful of companies control most of the market through diverse brands – one company alone controls 13 funeral-directing brands in New South Wales!). 

Today, the major studios hire out most of their actual film production work to independent companies. Any given film is likely to be a complicated partnership between various distribution and production entities. At a glance, this may seem undesirable or distasteful in both the film and hotel worlds. But as far as hotel guests are concerned, there is room for any and all of these combinations — so long as the end result is on pitch. No matter how many production and distribution logos we see before the movie starts, it’s the experience that matters.

For further industry insight please follow the links below.

 


1 Comments

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