Brand as an Indicator of Rate Potential

Industry professionals assume that guests are willing to pay more for a full-service hotel than a select-service hotel because of the difference in amenities. Brand, however, has not been studied as an indicator of rate potential for these select service hotels in respect to their relationship with their parent brand. Holiday Inn Express, the select service brand extension of Holiday Inn, is a highly successful brand extension whose advertising campaign helped to make it one of the leaders in the select service segment. Meanwhile, the Holiday Inn has not remained a leader in the mid-priced, full service segment. This study examines the rate potential for the Holiday Inn Express and determined that it can achieve a statistically significant same or higher rate than the Holiday Inn. An examination of on-line reviews also determined that the Holiday Inn Express does receive a higher star rating and better comments than the Holiday Inn.