Co-branding is a relatively recent phenomenon within the Canadian hospitality landscape, but one starting to be looked at more seriously by hotel companies.

Co-branded, or dual-branded properties as they are sometimes called, offer guests the choice of two related but different hotel brands in a developer’s portfolio — often within a single building — explains Brian Stanford, senior managing director with CBRE Hotels. “The benefits are the ability to cater to a broader [guest] segment, whether it is an extended-stay customer or a select-service customer,” he continues. “The owner of the development has an opportunity to operate two different hotels within one system, with a broader range of services to offer.”

“Consumers, for instance, enjoy greater choice in terms of their preferred guest experience at one location and access to additional amenities they [wouldn’t] otherwise find at a single-brand hotel,” says Martin Stitt, AVP of Western Canada for Marriott International. “At these locations, they also have two brands where they can earn and redeem loyalty points.”

A driver for co-branding is often what the market can support, Stanford adds. In a particular market, there may be demand for a limited-service and for an extended-stay offering, but not enough market demand to justify stand-alone operations for each of those individual brands.

Stuart Laurie, director, Franchise Sales and Development, with InterContinental Hotels Group (IHG) says co-branding is also being driven by owners and developers finding it hard to find separate sites that can be developed into standalone limited-service and extended-stay properties. There may be a market demand for two brands to be profitable, but the available land is only enough for one physical property to be developed.

“Co-branded or combo-hotels were developed in order to maximize the site or space they were able to acquire and involves a hotel space where two properties are on a shared piece of land,” says Laurie. “In some cases, they are connected — for instance: some co-branded hotels share amenities or hotel elements like a parking lot or lobby, and even gym facilities or meeting space. Typically, we partner an extended-stay property, such as a Candlewood Suites or Staybridge Suites, with a limited- or full-service hotel, such as a Holiday Inn Express, Crowne Plaza or Holiday Inn.”

Currently, IHG has several co-branded hotels in the U.S. and Canada. In Canada, there is the Holiday Inn Express and Candlewood Suites in Edmonton, as well as properties in the pipeline, including a Staybridge Suites and Holiday Inn Express at Saskatoon University to open in the first quarter of this year; a Staybridge Suites and Holiday Inn Express in Niagara-on-the-Lake, Ont. (opening Q2 2018); and two Candlewood Suites and Holiday Inn Express — one in Grande Prairie, Alta. and another in Vaughan, Ont. (opening in 2019 and 2020 respectively).

Steve Gupta, president and CEO of Easton’s Group of Hotels Inc. says while co-branding offers many advantages to developers — such as the cost savings that come from the sharing of facilities, staff and services — the ultimate decision to co-brand really comes down to whether the market where the property will reside can support two brands existing together. He says developers need to make sure there are sufficient rooms available for each brand and suggests that a building will need 200-plus rooms that will be divided between the brands to ensure the co-branded venture will be profitable.

Easton’s Group has three co-branded properties for the Canadian market: the Courtyard and Townplace Suites by Marriot Northeast in Markham, Ont., which opened in 2015, the Four Points by Sheraton Toronto Airport and Element by Westin, with the Element scheduled to open by the end of 2018, and the Hilton Garden Inn and Hampton Inn by Hilton in Vaughan, Ont., expected to open by the end of 2019.

“Co-branded hotels typically see more efficiency in staffing models and operations, along with less food and beverages expenses…[but] the key is to understand the types of demand present in each market and what makes sense for the owner and developer,” adds Laurie. “Every market is unique, but it’s important to look at the demand generators and determine if that market would be well-suited for a co-branded hotel.”

“A dual-brand property makes the most sense in very specific instances,” adds Marriott’s Stitt. He cites such high-barrier-to-entry urban locations where land is selling at a premium, smaller markets that lack sufficient demand to support two full-sized hotels and existing markets where it’s advantageous to attract different customers at different price points.

Last year, Marriott introduced the first of its luxury-and-lifestyle dual-branded properties in Canada, the JW Marriott Parq Vancouver and The Douglas, an Autograph Collection Hotel.

“Instead of opening a single 500-room big-box hotel, we were able to maximize the opportunity with two hotels, 178-rooms and 272-rooms respectively…the two hotels [offer those] visiting Parq Vancouver a variety of options,” Stitt adds.

Gupta is quick to add there’s another important factor to keep in mind when deciding upon co-branding opportunities. “Yes, cost savings is certainly one thing, as it helps in terms of not having to build separate meeting rooms, kitchens and pools, for example,” he says. “But, you have to remember, while you are sharing some of the services and amenities, guests still expect you provide them the same level of service, amenities and brand perks associated with the brands on offer when they arrive.”

“The most critical factor in a dual-branded-hotel project is to ensure the different brands maintain their identities,” agrees Stitt, “such as separate entrances and lobbies, different design and amenities, and different service styles and standards — to keep the guest experience pure [and] ultimately enhancing the value for the owner.”

“The co-branding trend will continue to grow as it appeals to hospitality groups,” adds Stitt. “By having two or three distinct hotels under one roof, a multi-branded hotel can [help] a hospitality group increase its brands’ distribution and awareness in a given market — in addition to helping drive returns to the owner.”

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