It is fair to say that while overall demand was growing during those years, the reality was that many newly created brands were stealing market share -sometimes from the chain's own customers. Holiday s Crowne Plaza and Ramada's Renaissance represent examples. At the same time, upscale chains created more moderate brands to broaden their coverage of the market. As hotel companies fine-tune their identities, reposition their products and promote growth through aggressive franchising programs, owners and operators are frequently quite indecisive about how to apply a brand strategy to the marketing of their property. The result - a great deal of flag changing at individual properties as repositioning strategies following change of ownership or renovation encourage the switching from one flag to another.
Hotels also switch from independent status to a flag and back again with great alacrity.
In the United States such movements account for as many as 300 to 400 instances of re-flagging of each type annually. This volatility has tended to erode brand loyalty - perhaps one of the most pressing challenges for the industry today. Customers Drive Shareholder Wealth Marketing executives have historically marshaled their efforts in determining how to best create and then sustain brand loyalty. The larger question of critical importance today, however, is the relationship of brand value to the accretion of shareholder wealth. In reality, capital markets value branded companies with loyal customers more highly than property companies that have little identity or customer following.