Travelers face a bewildering choice of hotel brands with similar and confusing names.
Want to stay at a Hyatt? There's Hyatt Regency, Park Hyatt, Grand Hyatt, Hyatt House, Hyatt Place and, coming soon, Hyatt Centric.
Vacationers once relied on big-name hotel brands to signal the kind of experience they could expect. People knew what Holiday Inn, Hilton, or Marriott meant.
No longer. The world's 10 largest hotel chains now offer a combined 113 brands at various price points, 31 of which didn't exist a decade ago.
Thanks to high occupancy levels and cheap interest rates, developers are scrambling to build properties. At the same time, hotels are trying to lure a new generation of travelers in search of authenticity. Those travelers want unique and hip places to sleep, not cookie-cutter facsimiles of hundreds of other hotels.
So-called lifestyle hotels are the hot area for growth. They are designed to attract travelers between 18 and 34 who aren't interested in marble bathtubs but might enjoy beanbag chairs.
"The big hotel chains are in the business of pretending they aren't big chains. They want you to think they are boutiques," said Pauline Frommer, editorial director for Frommer's, the travel-guide company. "This dizzying array of brand names is a good way for them to hide. The vast majority of the public is not going to keep track."
In the past year, Marriott International Inc. launched Moxy, Hilton Worldwide Holdings Inc. created Canopy, Best Western International Inc. came up with Vib, and InterContinental Hotels Group P.L.C., parent company of Holiday Inn, purchased Kimpton, adding its boutique hotels to the larger chain.
"The Internet has driven people to more niches. Everything is more segmented," said Best Western CEO David Kong. "Our six brands are actually six different needs."
U.S. hotels are now selling 65 percent of their room nights, up from 55 percent five years ago, according to travel-research company STR Inc. Guests are also paying more: $115.72 on average a night, up from $97.31.
That's why there are 128,874 additional hotel rooms already under construction in the United States, up 32 percent from last year, according to STR. An additional 306,644 rooms are in the planning stages and will be added to the existing supply of five million rooms.
Hotel companies typically don't build or own properties but collect management or franchise fees from the owners. Those developers need to decide if their building is going to be a Hilton, a Comfort Inn, a Sheraton, or something else. Competition is fierce from hotel chains to ensure new properties fall under their brand.
But a city can support only so many Marriotts. That's why Marriott International offers 19 different brands, including Courtyard and Ritz-Carlton.
With developers eager to break ground while financing remains cheap, hotel companies are willing to do anything. Many new properties are in tight urban spaces that couldn't fit traditional hotels or their ballrooms.
In the next four years, a quarter of Marriott's growth will come from brands that didn't exist five years ago.