If a new report is any indication, travel companies have a long way to go to enhance their brand value among consumers.
For the ninth straight year, the travel industry is not represented on Interbrand’s list of the 100 Best Global Brands. The international brand consultancy just released its 18th annual list, and the winners are Apple, Google, and Microsoft.
While technology took the top three spots, the automotive sector has the most entries on the list with 16. Tech has 15, while financial services has a dozen and consumer goods has nine. Retail is the fastest-growing sector in percentage terms (19 percent growth in representation), helped by the presence of several luxury fashion brands on the list. Disney, which has resorts in its portfolio, is also included.
Brand, of course, matters for tangible and intangible reasons. According to Jez Frampton, global CEO of Interbrand, “Best Global Brands understand that brands are platforms for growth.” Strong brands influence customer choice and create loyalty; attract, retain, and motivate talent; and lower the cost of financing.
To be included in Best Global Brands, a brand must be truly global, having successfully transcended geographic and cultural boundaries. It will have expanded across the established economic centers of the world and entered the major growth markets. This requires that:
- At least 30 percent of revenue must come from outside of the brand’s home region.
- The brand must have a significant presence in Asia, Europe, and North America, as well as broad geographic coverage in emerging markets.
- There must be publicly available data on the brand’s financial performance.
- Economic profit must be expected to be positive over the longer term, delivering a return above the brand’s cost of capital.
- The brand must have a public profile and awareness across the major economies of the world.
Therefore, while part of the reason some recognizable travel brands did not make the cut may be due to the methodology, that excuse doesn’t fly for many international airlines or hotel companies.
Interestingly, the brand most connected to travel on this year’s list is Louis Vuitton, which has been in the Top 100 since 2007. This year, it’s #19. LV has been making luggage since the 1850s, although it has expanded its product line during the past 160 years-plus. Rebecca Robins, Interbrand global director, notes a large part of the reason LV is a list perennial is that “it owns the sense of the journey.” Yes, a luggage/fashion company owns this brand message — not a travel company. Robins says that’s because “Louis Vuitton has been at this a long time. It’s a brand with history and it takes advantage of its story.” Furthermore, she says, “The brand’s continued presence, in the context of the increasing dominance of the tech brands, is quite extraordinary.”
Travel Brands MIA
Travel brands have made the list in the past. Marriott was the last to do so in 2008, and Hilton appeared around the turn of the century. In both cases, the hotel companies were ranked near the bottom of their respective lists.
Why haven’t travel brands made the list more recently? Penelope Davis, Interbrand senior director, attributes that in part to the constant drive for hotel companies to develop new brands within their portfolios. While she doesn’t say this strategy dilutes the parent brand per se, it doesn’t necessarily increase brand equity. As for which travel company might actually make the list soon, Davis says, “Airbnb is one to watch, a hospitality brand backed by technology.”
As travel becomes accessible to more people worldwide, Davis says travel brands should have an opportunity to reach the top of the brand recognition scale. But, Robins notes that “expectation of the brand has to be matched by the experience of the brand.”
For example, regular readers of Skift New Luxury know that nearly every luxury hospitality company on earth is trying to deliver a message about “sense of place” or “local experiences”. The problem with that, according to Robins, is that a brand can lay claim to a message — but it doesn’t mean it’s perceived as true. ”To match message with product and services,” Robins says, “brands need to fight hard for their differentiation and capture that difference uniquely in their products.”
Luxury travel brands in particularly would be wise to heed those words. “The role of the brand is much higher in the luxury sector than in any other category,” notes Robins. “But for luxury brands to maintain strong positions, it’s largely about “sustainable excellence” evolved over time. The luxury players on this year’s list, including Hermes, Dior and Gucci, have been around for years. “To stay in the public zeitgeist, brands have to stay true to their DNA, and maintain their current consumers while also reinventing themselves for new audiences. It’s a fine balance to maintain the integrity of who you are and where you came from, while engaging new generations.”
That said, newer travel brands have a chance to make the list if they pay attention to several factors, according to Robins. “Great brands begin from within.” Establishing a culture and finding the right people is the first step. Agility is also important. As the pace of change quickens, brands need to keep up. And especially in the world of luxury, Robins emphasizes the holy grail of “staying true to the brand.”
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Photo credit: Luggage from Luis Vuitton in a promotional image from the luxury brand. It is on an annual list of powerful global brands. Luis Vuitton