Taj Hotels Bucks the Expansion Trend and Shrinks From Three Brands to Just One

At a time when most hotel companies are looking to increase the number of brands they have, Mumbai-based Taj Hotels Resorts and Palaces, which has 100 hotels worldwide, is doing just the opposite.

Today, the company has decided to rebrand itself under a single name: Taj Hotels, Palaces, Resorts & Spas, and Safaris. By year’s end, Taj’s two other hotel brands, the upper upscale Vivanta by Taj and the upscale Gateway Hotels & Resorts will be phased out, and all 100 Taj, Vivanta, and Gateway properties will be completely rebranded as Taj.

“Part of the need for this new brand architecture was to differentiate ourselves in a more strong fashion compared to all the new brands that are coming, especially those coming into the country here in India — all the Marriotts, Hyatts, and Hiltons of the world,” said Chinmai Sharma, Taj’s chief revenue officer. “As the marketplace gets more crowded across all chain scales, from budget to upscale and luxury, we’ve created our own niche segment to create a substantial difference and better brand differentiation. With this mono brand approach, the value proposition is extremely clear in everyone’s mind.”

Sharma may have a point. Ask any consumer (or yourself) to tell the distinct difference between Marriott’s SpringHill Suites or a Fairfield Inn & Suites brands, or to do the same with Hilton’s DoubleTree by Hilton or Hilton Garden Inn, and you’d be hard pressed to find anyone who can tell you exactly what makes each brand unique from the other.

“What we’re doing with this single brand approach seems very contrary to what the other brands are doing. I don’t know that a consumer will understand the differences between all 30 Marriott brands, for instance, but good luck to them,” he said. “We’re taking a simpler approach.”

But is “simpler” necessarily better for Taj’s hotel owners or for Taj’s business overall?

Sharma said, “Doing this opens the door for more discussions [with developers and owners].” However, general hospitality industry wisdom tells us that the reason why so many brands exist — aside from attempting to confuse us — is to help owners know exactly what kind of an investment they are making, to have very clear brand standards, and to avoid having too many of the exact same hotel brands in the same markets. This way, hotel management companies can grow the number of properties they sign on in a nearly infinite manner because there’s, quite literally, a brand for every type of owner, developer, and traveler out there.

Makarand Mody, assistant professor of hospitality marketing at the Boston University School of Hospitality Administration, says this “house of brands” hospitality strategy, however, isn’t something many hotel companies in India, such as Oberoi or ITC, pursue. “They keep closer to the core brand equity that they have. Taj tried to do something different with this mix of brands, but I think that in doing so, they strayed away from something they are really good at it. I think what they are doing with this new brand architecture leverages a strength they didn’t necessarily use so well in the old brand architecture.”

Sharma said the decision to make this rebranding move took well over a year and involved gathering feedback from consumers. “One common theme we were getting was that the Taj brand is the biggest pull in terms of brand recall and equity, and it’s why people want to work with and stay with the company. Based on that, we said that even though we went on this strategy of diversifying brands about 7 to 9 years ago when the other two brands were formed, we wanted to protect the mother brand at the time.”

Mody, for one, thinks this move is a positive one for Taj. “Last year, I stayed at a Vivanta in Kerala, India, and when I got back and told people about my experience, I never referred to it as Vivanta. I talk about it as a Taj property,” Mody explained. “I think Taj, the core brand, the word in itself, has its own very strong equity. The new brand architecture will really try to leverage it. It will create a lot of coherence for the company, and the brand, and also for the consumer. In that sense, I think it’s a right move. The way the architecture was, it diluted the brand equity.”

He added, “When you think ‘Taj,’ and this is as an Indian consumer myself, you automatically assume a level of luxury, elegance, and heritage. I think the Indian consumer is sort of trained to think luxury when you think Taj. By having this architecture, they can perhaps offer more coherent product.”

However, a challenge Taj may face as it unifies its portfolio under a single brand may be pushback or reluctance from owners, especially those who may have to invest more capital to bring their property up to the same quality or service as the luxury Taj brand. Although Taj’s parent company is either an owner or part owner in 70 percent of its properties, some 30 percent of its portfolio is managed. Of its 100 hotels, 53 are either a Vivanta or Gateway property.

“I think for Vivatna and Taj, I don’t think this should be that much of an adjustment in the sense that’s required,” Mody said. “With Gateway hotels, that’s where they may run into some issues with owners particularly if they say they have to bring in more capital investment to bring a property up to Tajness standards. That might be more of a challenge.”

Sharma said that under the Taj umbrella there will be four brand lines (hotels, palaces, resorts and spas, and safaris) with four different criteria, or brand standards. Palaces, for example, must be at least a century old and have royal lineage and will feature butler experiences. Hotels will all offer 24/7 services and have business amenities. Resorts will also focus on the local destination and feature Taj’s in-house spa brand.

All properties, regardless of brand line, will focus on having “great food and beverage and a great sleep experience,” Sharma said, as part of the brand’s overall “Tajness” attributes. Other standards include digital check-ins, electric cars for guest transportation, concierge services, and fitness centers.

To promote this new single brand identity, Taj will engage in an advertising and marketing campaign called “Tajness,” and the tagline will be, “you can feel it with your eyes closed.”

The new brand restructuring also aligns with Taj’s strategic loyalty partnership with Shangri-La Hotels, which is scheduled to launch at the end of March. It enables members of Taj’s Inner Circle program and members of Shangri-La’s Golden Circle program to use their respective loyalty points at the other hotel company’s properties. Sharma said the loyalty alliance is going well and that other hotel companies from other geographic regions have asked to join.