A comparison of soft and hard luxury brands expanding into the hospitality industry

: the effect of brand extension fit and brand extension authenticity on overall attitude towards the extension

Abstract

As luxury brands continuously look for ways to grow their bottom-line, extending into the hospitality industry is a strategy already being pursued by some (Versace, Bulgari). Moreover, since luxury hotels keep driving luxury industry’s growth, it can be expected that such strategy will be pursued by other brands. Thus, this study investigates to which extent the type of luxury brand (soft: clothing/fashion and hard: watches/jewelry) influences the attitude toward the hospitality extension through brand extension fit and brand extension authenticity constructs. A study was conducted where the sample was split by two conditions - the soft brand (Chanel) and the hard brand (Rolex) – and by presenting a hypothetical hotel extension of these brands. The results show that the soft brand extension is perceived to be more authentic than the hard one. Fit was perceived as low for both brands but it does not impact the overall attitude, while authenticity does so positively, independently of the brand type. This result is surprising since most research supports fit as a success driver for brand extensions. However, given the lack of studies about luxury brand extensions especially into services, this result may be a groundbreaking point for future research. Additionally, luxury involvement revealed to be positively correlated with attitude for the soft brand extension. The key take-away is that regardless of the type of luxury brand (soft or hard), these brands can expand into hotels as long as the extension is authentic, i.e., respects and maintains all cultural aspects of the parent brand.

Date of Award	18 Jul 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Rita Coelho do Vale (Supervisor)