• Cyril McAree

World’s Top 50 Most Valuable Hotel Brands Could Lose up to US$14 Billion of Brand Value from COVID-1

The world’s top 50 most valuable hotel brands could lose up to US$14 billion worth of brand value as a result of the COVID-19 pandemic, according to the latest Brand Finance Hotels 50 2020 report. Brand Finance’s analysis shows that the hotels sector is one of the most heavily impacted industries globally and could face a potential 20% loss in brand value.

COVID-19 is undoubtedly going to wreak havoc on the sector in the coming year – both financially, as hotels are forced to close and bookings are cancelled, and reputationally, as brands that do not manage to avoid association with COVID-19 may suffer lasting reputational damage. Looking beyond the hotels sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.






Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. The likely impact on brand value was estimated for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.


Savio D’Souza, Director, Brand Finance, commented:“Unsurprisingly, the COVID-19 pandemic is going to hit the hotels sector hard as holidays are cancelled and people work from home. While Brand Finance has predicted that hotel brands could face an average 20% loss of brand value, the brands that will be less impacted will be properties with strong brands where social distancing protocols will be easier such as resorts and extended stay properties. Unsurprisingly, brands with a larger exposure to primary markets will be impacted more than secondary and tertiary markets as customers move their preference to properties within “drive-to” markets.”


Hilton remains most valuable

Hilton has recorded an impressive 35% growth in brand value to US$10.8 billion, holding on to first place in the Brand Finance Hotels 50 2020 ranking. The brand’s year-on-year success is due to strong revenue growth and a solid reputation, making Hilton a firm-favourite amongst holiday-goers around the world.


While Hilton’s revenue will take a hit following COVID-19, the brand is consistently elevating its reputation during the crisis, lighting up its buildings in support of the NHS in London, donating free parking spots to healthcare professionals, and teaming up with American Express to donate 1 million overnight stays to frontline medical workers across the US. Placing people at the heart of its strategy, Hilton has also helped its staff who have been furloughed or let go to connect with job vacancies in essential services sectors. As global lockdown restrictions begin to be reviewed, the brand’s gestures of goodwill are likely to pay off, protecting its future revenues and reinforcing Hilton’s already solid reputation.


Mercure is fastest growing, up impressive 57%

With a brand value growth of 57% to US$2.3 billion, Mercure is the fastest growing brand in the Brand Finance Hotels 50 2020 ranking, jumping 3 spots to 8th position. Accor group has been focussing on strong organic franchise growth across its portfolio with Mercure picked as one of the key brands to deliver this growth. This shift to franchise-based growth has fuelled the brand value growth versus last year.


In line with global trends, Accor-owned Mercure hotels have ceased operations in many of their locations but seem to have taken a long-term view approach to their brand’s reputation, demonstrating goodwill by providing rooms for homeless people and other vulnerable communities during COVID-19. Accor’s portfolio of brands are likely to benefit from an improved reputation from its rapid and employee-centred response to the Coronavirus crisis, which saw the parent company establish the ALL Heartist Fund to distribute money amongst employees and partners who have seen their income slashed.


Premier Inn named sector’s strongest

In addition to measuring overall brand value, Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. According to these criteria, Premier Inn (up 22% to US$1.2 billion) is the world’s strongest hotel brand with a Brand Strength Index (BSI) score of 89.1 out of 100 and a corresponding AAA brand strength rating.


The last few years have seen Premier Inn strengthen its reputation as a reliable hotel option, reinforced by the brand’s humorous advertising campaigns and strong celebrity endorsements. Alongside this well-executed branding strategy, Premier Inn’s BSI is driven by its high customer equity and CSR scores, undoubtedly boosted by the brand’s commitment to eliminate single-use plastics by 2025 as part of their ‘Force for Good’ sustainability programme.


In response to the COVID-19 pandemic, Premier Inn has demonstrated its commitment to communities through a series of measures, ranging from closing their phone lines to reduce the number of unnecessary journeys to work, reserving hotel rooms to support the NHS and key workers, and implementing refund policies to non-refundable rooms.


Savio D’Souza, Director, Brand Finance, commented:“As the strongest hotel brand in the ranking, Premier Inn’s overwhelmingly people-led response to the Coronavirus crisis is likely to reinforce strong customer perceptions of trust and allow the brand to emerge with a relatively unscathed brand strength.”


Leisure & Tourism heavily impacted by COVID-19

Alongside analysing the world’s most valuable hotel brands, Brand Finance also ranks the top 10 most valuable brands in the wider leisure and tourism industry. Brand Finance’s analysis shows that leisure and tourism brands could also lose up to 20% of brand value due to COVID-19.


With a brand value of US$10.5 billion, Airbnb is the most valuable leisure and tourism brand. Combining technology and leisure, Airbnb has given traditional hotel brands a worthy opponent since its inception, favoured by homeowners as a hassle-free source of extra income, and by frequent travellers for its affordability and sense of adventure. Despite its business operations grinding to a halt, Airbnb is in a relatively good position to recover from the crisis as the economy slowly re-opens, likely to be favoured by holiday-goers looking for “staycation” options in their own countries.


Savio D’Souza, Director, Brand Finance, commented:“It is fairly obvious that the leisure and tourism industry is going to take a big hit from the Coronavirus outbreak as varying levels of lockdown are being imposed on nations globally - Brand Finance’s analysis demonstrates that leisure and tourism brands could lose up to 20% of their brand value. As with most sectors, however, the damage that will ensue on these brands will greatly depend on how long the pandemic engulfs the world, when borders are opened and how well brands can respond and adapt to the changing market.”


0 views
Search by Tags

© 2020 by ManagingDigital