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World’s Top50 most valuable hotel brands could lose up to US$14bm. of brand value from COVID-19

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Hotels sector heavily impacted by COVID-19 pandemic, brands could lose up to 20% of cumulative brand value, equating to US$14 billion.

The world’s top 50 most valuable hotel brands could lose up to US$14 billion worth of brand value as a result of the COVID-19 pandemic, according to the latest Brand Finance Hotels 50 2020 report. Brand Finance’s analysis shows that the hotels sector is one of the most heavily impacted industries globally and could face a potential 20% loss in brand value.

COVID-19 is undoubtedly going to wreak havoc on the sector in the coming year – both financially, as hotels are forced to close and bookings are cancelled, and reputationally, as brands that do not manage to avoid association with COVID-19 may suffer lasting reputational damage.

Looking beyond the hotels sector, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated US$1 trillion as a result of the Coronavirus outbreak.

Brand Finance has assessed the impact of COVID-19 based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020. The likely impact on brand value was estimated for each sector. The industries have been classified into three categories – limited impact (minimal brand value loss or potential brand value growth), moderate impact (up to 10% brand value loss), and heavy impact (up to 20% brand value loss) – based on the level of brand value loss observed for each sector in the first quarter of 2020.

Savio D’Souza, Director, Brand Finance, commented: “Unsurprisingly, the COVID-19 pandemic is going to hit the hotels sector hard as holidays are cancelled and people work from home. While Brand Finance has predicted that hotel brands could face an average 20% loss of brand value, the brands that will be less impacted will be properties with strong brands where social distancing protocols will be easier such as resorts and extended stay properties. Unsurprisingly, brands with a larger exposure to primary markets will be impacted more than secondary and tertiary markets as customers move their preference to properties within “drive-to” markets.”

Hilton remains most valuable
Hilton has recorded an impressive 35% growth in brand value to US$10.8 billion, holding on to first place in the Brand Finance Hotels 50 2020 ranking. The brand’s year-on-year success is due to strong revenue growth and a solid reputation, making Hilton a firm-favourite amongst holiday-goers around the world.

While Hilton’s revenue will take a hit following COVID-19, the brand is consistently elevating its reputation during the crisis, lighting up its buildings in support of the NHS in London, donating free parking spots to healthcare professionals, and teaming up with American Express to donate 1 million overnight stays to frontline medical workers across the US. Placing people at the heart of its strategy, Hilton has also helped its staff who have been furloughed or let go to connect with job vacancies in essential services sectors. As global lockdown restrictions begin to be reviewed, the brand’s gestures of goodwill are likely to pay off, protecting its future revenues and reinforcing Hilton’s already solid reputation.

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