Covid19 could cost world’s top hotel brands $14bn
Some hotel brands have fared much better than others during the pandemic. (Photo: Ruthson Zimmerman on Unsplash)
The 50 most valuable hotel brands stand to lose up to 20% of their brand value because of coronavirus, according to Brand Finance.
It’s undeniable that the hotel sector has been one of those hit hardest by Covid19 and will probably feel the effects of the crisis for years to come.
We take a closer look at how the industry’s biggest names have been impacted and consider what effect this has had on their brand value.
World’s top 50 hotel brands could lose big
As a result of Covid19, the world’s top 50 most valuable hotel brands could lose up to $14 billion or 20% of cumulative brand value compared to 1 January 2020, according to the Brand Finance Hotels 50 2020 report.
The coming year is also forecast to be very challenging for the sector, firstly as the forced temporary closure and cancellation of bookings represents a huge financial blow, and secondly because some brands which have been negatively associated with Covid19 could suffer lasting harm to their reputations.
But the hotel industry isn’t suffering alone. When looking at the 500 most valuable brands worldwide, Brand Finance found that their overall value could fall by up to $1 trillion due to the pandemic.
The hotel industry’s winners
Despite the dire situation, some companies are doing better than others. Hilton, for example, has recorded a staggering 35% growth in brand value, reaching $10.8 billion. This means Hilton retains first place on Brand Finance’s list of the top 50 hotel brands.
This success is due to Hilton’s solid reputation and strong revenue growth in previous years. The company has also dealt with the Covid19 outbreak comparatively well and made a name for itself by supporting healthcare and other frontline workers around the world.
Elsewhere, Mercure is the fastest growing brand with its value soaring 57% to $2.3 billion. This is partly a result of effective portfolio growth and Accor’s solid employee-centric response to the pandemic, which supported staff and partners who lost income and faced financial hardships.
Finally, Brand Finance determined that Premier Inn is currently the strongest brand in the industry. This conclusion was drawn by evaluating marketing investment, stakeholder equity, and business performance. Combining these metrics, Premier Inn scored 89.1 out of 100 on Brand Finance’s Brand Strength Index, which corresponds to a AAA brand strength rating.