The hospitality industry is in the middle of an unprecedented land grab.
The largest hotel companies are adding brands at a staggering pace. Marriott now has nearly 40 brands and is still growing, having acquired a lifestyle hotel company, launched an outdoor lodging collection, and expanded a new midscale brand into Europe in the last year alone. Hilton just debuted its 26th brand and has 40 branded residential projects in the pipeline. Both are racing to build the largest loyalty ecosystem in travel, with membership programs approaching 300 million members. Meanwhile, a new generation of lifestyle and boutique brands is scaling fast, backed by investors who want returns on an aggressive timeline.
Everyone is chasing more flags, more doors, more categories. And it makes sense on paper: Growth drives franchise fees. It feeds loyalty program enrollment. It signals market dominance. Net Unit Growth, or NUG, is the metric that moves stock prices in this industry. It’s the number that gets highlighted on every earnings call, the one that analysts ask about first.
I’ve spent more than 20 years inside this machine. I’ve seen NUG pressure from the corporate strategy side at a major global hotel company, where it was the metric that mattered above almost everything else. I lived through the consequences of investor-driven growth at Sonder, before it shut down in late 2025, where the mandate to add units outpaced the organization’s ability to deliver a consistent experience. I’ve watched the tension play out at every level, from boardroom strategy to on-the-ground operations.
And I keep coming back to the same question: at what point does the pursuit of growth start undermining the thing customers are actually paying for?
When the Product Becomes the Platform
Something fundamental has shifted in how the largest hospitality companies think about their business.
The biggest hotel companies didn’t start as loyalty platform companies. They started as hotel companies. They built their reputations on a specific experience, a promise that when you walked through the door, you’d get something consistent and worth paying for.
But over the last two decades, the core business model has evolved. The real product now isn’t the hotel room. It’s the membership. The points. The data. The ecosystem. Every brand acquisition, every new category (residential, short-term rental, lifestyle), every licensing deal gets evaluated primarily through one lens: Does this add members to our platform?
That’s not inherently wrong. It’s a smart, capital-light strategy. But it changes what gets prioritized. When the business is optimized for loyalty membership growth, the brand’s experiential promise can quietly become secondary. The biggest hotel companies now manage dozens of brands each, and the number keeps climbing. Can customers even keep up? Does the average traveler know the difference between Autograph Collection, Tribute Portfolio and the Luxury Collection? At a certain point, the portfolio stops being a curated set of experiences and becomes a wall of logos feeding the same enrollment funnel.
The risk is that loyalty without a consistently great underlying experience is just a points program. And points programs are commodities. Eventually, people stop caring about the points if the stays aren’t delivering.
The Startup Version of the Same Mistake
This isn’t just a big-brand problem. The startup side of hospitality has its own version.
Sonder, which shut down in late 2025 after going from Series B darling to IPO to bankruptcy in a matter of years. The growth pressure came from a different source, venture capital, but the dynamics were identical. The mandate was to scale units as fast as possible. More cities, more properties, more doors. The ambition was real and the vision was compelling. But when growth is the scoreboard, other things start to slide.
Properties got signed that didn’t fit the brand. The experience became inconsistent across markets. And then the organization spent years trying to unwind those decisions, exiting leases and closing locations that never should have been in the portfolio in the first place. One of the world’s largest hotel companies even brought Sonder into its loyalty portfolio through a licensing deal in 2024. Within a year, Sonder defaulted and the partnership was terminated.
The lesson isn’t that Sonder was uniquely flawed. It’s that the hospitality industry’s growth incentives are structurally misaligned, whether the capital comes from Wall Street or Sand Hill Road. When you optimize for unit count, you underinvest in the operating systems, quality controls, and brand discipline that make each unit worth having. And venture capital, with its demand for rapid returns, is a particularly poor fit for a business built on physical assets and experiential consistency.
This Pattern Has a Name
Hospitality isn’t the first industry to learn this the hard way.
Starbucks is the textbook case. By the mid-2000s, the company had grown so aggressively that Howard Schultz wrote an internal memo warning that the relentless pursuit of growth was leading to a “watering down of the Starbucks experience.“ Stores had lost their character. The third-place concept had eroded into just another fast-service counter. Starbucks had to close hundreds of locations and reinvest in the fundamentals. And notably, they’ve found themselves wrestling with the same tension again in recent years.
Subway expanded to more than 44,000 locations worldwide, making it one of the largest restaurant chains on earth. But growth without quality controls turned the brand into a punchline. Ubiquity replaced desirability.
In luxury retail, brands like Michael Kors expanded aggressively into outlet channels and accessible product lines, only to watch their brand perception erode. Once you dilute exclusivity, it’s extraordinarily difficult to earn it back.
The pattern is always the same: Growth becomes the identity. The metric that got you here becomes the one that hollows you out. And by the time leadership recognizes what’s been lost, the damage is deep.
What Actually Breaks
From the outside, the consequences of over-scaling look like brand dilution or declining satisfaction scores. From the inside, it’s more granular and more human than that.
It’s the property that gets signed because it hits the unit target, even though the team knows the product doesn’t meet the brand’s standards. It’s the customer feedback that gets collected religiously but never actually changes a decision when it conflicts with a growth commitment. It’s the gap between what the brand promises in its marketing and what a guest experiences when they check in.
And here’s the part that doesn’t show up in earnings calls: these compromises compound. Every inconsistent experience erodes trust. Every shortcut that gets rationalized as temporary becomes permanent. Every time customer feedback loses the argument to a unit target, the organization learns that quality is negotiable.
The experience doesn’t collapse overnight. It fades. And by the time the data reflects it, you’ve already lost something that’s very expensive to rebuild.
The Counterargument (and Why It's Incomplete)
There’s a fair response to all of this, and it goes something like: this is just how the industry works. You grow or you die. Capital markets demand it. Franchise models require it. Shareholders want returns.
And that’s true. No one is arguing for standing still.
But there’s a meaningful difference between disciplined growth and undisciplined expansion. Between scaling a business and spreading a brand. Between adding units that strengthen your portfolio and adding units that dilute it.
The companies that sustain performance over time aren’t the ones that grow fastest. They’re the ones that build the operational foundation before they need it. They invest in brand standards, quality systems and operating discipline at a pace that matches—or leads—their growth. Not after things start breaking.
The current model treats operational quality as something you figure out later, once you’ve scaled. In two decades of doing this work, I’ve almost never seen “later“ actually come.
What This Means for Leaders
I’m not offering a five-step framework. The specifics look different for every company. But there are a few things I’d push any hospitality leadership team to think about honestly.
First, pay attention to what your customer feedback is actually telling you, and let it influence real decisions. Not just dashboards and quarterly reports. If your voice-of-customer data is saying one thing and your growth plan is saying another, that tension deserves a serious conversation, not a rationalization.
Second, protect your brand standards like they’re non-negotiable. Every property, every partnership, every new category should meet a bar that’s defined by the experience you’ve promised, not by the deal economics. The moment brand standards become flexible based on growth opportunities, you’ve started a process that’s very hard to reverse.
Third, build the operating infrastructure for where you’re going, not where you are today. The systems, the people, the processes, the accountability structures. Scaling without these in place isn’t ambition. It’s risk.
The Real Question
The companies that define the next era of hospitality won’t be the ones with the most doors. They’ll be the ones where the experience actually holds up across every property, every market, every interaction.
When the industry's biggest players launch new brands faster than customers can learn the old ones, or enter entirely new categories to compete with Airbnb, the question isn't whether the strategy is smart. It's whether the experience can keep up
I don’t say this from the outside. I spent nearly a decade at Sonder. I helped build the systems, led the teams, and fought for the operational discipline that growth kept outrunning. One of the biggest hotel companies in the world licensed that brand into its loyalty portfolio, and within a year the company was gone. If that’s not a case study in the cost of undisciplined growth, I don’t know what is.
Growth that comes at the expense of experience isn’t scaling. It’s spreading. And the difference between the two will determine which brands earn lasting loyalty and which ones just accumulate points members who are one bad stay away from switching.
The hospitality industry has always understood, better than most, that experience is the product. The question now is whether it’s willing to protect that idea, even when growth is easier to measure.
Laura Hoxie is the founder of BTR Advisory, a hospitality advisory practice focused on operational excellence and customer experience. She has held leadership roles at Sonder, Hilton, Four Seasons and Darden.