A new trend in the hospitality sector, dual-branding, is drawing strong industry interest, with developers and operators trying to double up offerings at a single property.

The dual-brand concept—a Residence Inn/Springhill Suites combo is a common offering—can be lucrative in attracting more guests, but controversial in blending amenities and brand presence to the possible detriment of brand loyalty. Currently, there are more than 40 multi-brand properties already open around the country, with about 25 more under construction and another 50 or so in the planning stages, according to Hank Jones, a principal with Kallenberger Jones & Co., a hotel investment consulting firm. Jones sats his firm is getting near constant requests from developers to put up dual-branded properties. “I don’t know that it’s a fad, but it certainly does seem like interest is growing,” he notes.

Developers like the concept because it allows them to tie up the market, Jones says. Brands such as Marriott have been known to locate different properties within sight of each other, making two separate owners compete for guests. By going dual-brand, the developer can go after both the select-service and extended-stay hotel customers with one property, with less chance of local competition.

There had been a number of dual-brand properties announced or launched in recent months. White Lodging is building and will manage a 495-room, dual AC Hotel by Marriott and Meridien Hotel by Starwood in downtown Denver. The developer has also started construction on a 32-story, 422-room Aloft and Element hotel in downtown Austin, Texas, which it will own in a partnership with REI Real Estate Inc. and Poe Cos. Noble Investment Group and IHG have a joint venture to develop a 235-room EVEN Hotels and Staybridge Suites combo in downtown Seattle.

Architect firm Cooper Carry recently finished a Hyatt Place-Hyatt House dual-branded hotel in Charleston, S.C. and is now working on a Marriott AC Hotel/Moxy pairing in Midtown Atlanta. Keith Simmel, principal of Cooper Carry’s hospitality specialty practice group, says owners benefit by getting two hotel styles to attract guests instead of one, while operators can lower costs by combining backroom staff and amenities. The challenge is that individual brands work hard to provide different experiences, and two hotels in one can confuse guests, he says.

“People who are loyal to a Hyatt Place, or a Residence Inn, that’s the only hotel they like, they want to walk into a hotel feeling like they’re comfortable,” Simmel says. “If the dual brand morphs into one property it can muddy the waters, unless you have some sort of separation.”

Marriott, which operates 44 hotels in 22 dual-brand properties and has more than twice that number of hotels in planning or under construction, has set strict separation guidelines. The company uses two methods to combine properties: The traditional “linked” method, where the two brands are kept almost completely apart in the same building, with different lobbies, elevators and amenities; and the more modern “blended” method, where developers and owners try to morph the brands together as seamlessly as possible. The company mandates that any brand can be linked, but only select service or non-lifestyle brands can be blended.

Dual-branding is popular today because of a lack of available, affordable land and the increased costs for construction, says Tye Turman, senior vice president of lodging development for Marriott’s Western region. However, the strategy is more challenging in the beginning and his firm has learned from mistakes along the way

 “For example, early on, we realized that having just one check-in desk, or even two next to each other, confused guests,” he says. “We still want to have that distinct brand experience when you step off the elevator. We want to ensure that the brand integrity is upheld.”

However, having backroom linking is welcomed, and Marriott is more likely to request a combined operating staff, instead of separate management, to encourage unity of building decisions, Turman notes. Yet the most divisive problem for dual brands comes early in the morning at breakfast time. As in most hotel chains today, a few of the Marriott brands offer free breakfast, while others have fee-based meal options. The question has been how to keep guests staying at the fee-based property from infiltrating the free breakfast area, Turman says. Owners vary in their solutions, but Marriott now tries to encourage the design of the properties to offer breakfast on different floors or sections of the hotel.

The company wants to continue the dual-brand trend, but is more likely to stick to its specific criteria for the properties and may no longer welcome another offshoot trend where hotels combine brands from different operating companies, Turman adds. The most well-known example is a tri-branded, block-long property in the River North area of downtown Chicago, which joins a Starwood Aloft, a Marriott Fairfield Inn & Suites and a Hyatt Place hotel. “I think we realize that’s the least desirable situation—no one likes being that close to a competitor,” he says.

Greg Portman, Atlanta-based president of architecture firm PFVS, says he’s had significantly more dual-brand designs come across his desk lately. He agrees there are sometimes conflicts in how the two-brand process can work, especially with the blended versions. Portman says he’s participated in designs for dual-brand hotels where owners insisted on separate kitchen and dining areas, but that some properties are more willing to accept some lost revenue to not make guests feel like they are second-class citizens.

“It depends on the tolerance of the owner and the brand, they really don’t want to have guests have a negative experience,” he says. “Sure, you could police it, require guests to show a room key, but in the long run it’s probably better to just not worry about it.”

Bottom line, owners like dual-branding because it brings in more guests, operators like it for efficiency and brands are amenable to the strategy, but wary. Investors, however, are united in their desire for the sites, says Erich Baum, a senior vice president with HVS, a hotel valuation and consulting firm in Boston. Baum has consulted on a few dual-brand deals and investors believe the vehicle delivers tremendous economic benefits from its diversification, he notes.

“Buyers and investors love these properties because of their better chance at cash flow,” Baum says. “If your point of view is your return on investment, there’s nothing not to like about it.”