Canadian Tire just paid $16 million for five stripes. Not a building. Not inventory. Not a customer database. Five colored stripes on a pattern.

Hudson's Bay Company filed for bankruptcy protection in 2024. Their physical assets—86 stores, inventory, fixtures—were liquidated and returned to creditors. But one asset commanded a premium price: the iconic five-stripe pattern that's been on Bay blankets, clothing, and Olympic uniforms for generations.

Canadian Tire wrote a $16 million check. For a design.

Here's the question that should keep every hotel operator up at night: Everything "real" had zero value to buyers. Why was a pattern worth $16 million?

Because Canadian Tire understood something most hotels miss completely: When you strip away everything tangible, brand equity is the only asset that still has value.

And right now, most hotels are spending millions on assets that depreciate while systematically ignoring the one asset that compounds.

Why Hudson's Bay Failed But Their Brand Survived

Let's address the obvious objection: "Hudson's Bay had incredible brand equity and still went bankrupt. Doesn't that prove brand doesn't actually matter?"

No. It proves the opposite.

Hudson's Bay died from operational failures. They couldn't compete with Amazon. They had too many expensive mall locations. They failed to adapt their business model to e-commerce. Their capital structure was a disaster—too much debt, too little flexibility.

But here's what didn't kill Hudson's Bay: their brand.

After 354 years of building memory associations across Canada, after creditors took everything physical, the brand was still worth $16 million to a competitor who saw what those stripes represented.

Those Bay blankets with five stripes? Still in closets across Canada. Still in guest rooms. Still triggering associations with heritage, quality, Canadian identity. Still creating value.

The lesson for hotels isn't "brand equity prevents bankruptcy." It's this: Brand equity is the last asset standing when everything else fails—and more importantly, it's the asset that drives repeat bookings and pricing power while you're still operational.

Hudson's Bay is just proof that courts and buyers can quantify this asset. Even bankruptcy judges recognized those five stripes had measurable value.

What Canadian Tire Actually Bought

Canadian Tire didn't buy nostalgia. They bought strategic access.

They're launching outdoor gear and home goods lines. They're putting the five-stripe pattern on everything: blankets, apparel, camping gear, accessories. Their distribution strategy is simple: Every product becomes an environmental cue in customers' homes.

This works because Bay blankets already exist in millions of Canadian homes. Canadian Tire's new products will trigger existing associations—heritage, quality, trust—without having to build them from scratch.

The ROI calculation is stupid-simple:

• Building equivalent brand recognition from scratch: 50+ years, hundreds of millions in marketing spend

• Buying it pre-built with 354 years of accumulated associations: $16 million

• Timeline to ROI: Immediate (the associations already exist in consumer minds)

Sound familiar?

Remember the slippers piece? Forsthofgut Hotel put their brand in our home for $15. Six weeks later, we're wearing them every morning and planning our return visit.

Canadian Tire just did the same thing at scale for $16 million. Both strategies have the same insight: Get your brand into physical spaces where people live, attached to objects they use daily.

Brand equity isn't abstract. It's concrete: How many homes have your branded objects in active use right now?

Hudson's Bay: Millions of homes with blankets, towels, clothing featuring five stripes.

Canadian Tire's bet: Those existing objects will transfer positive associations to their new product lines.

Your hotel: How many?

The Balance Sheet Problem Hotels Can't See

Here's a standard hotel balance sheet:

ASSETS:

• Property, Plant & Equipment: $50M

• Furniture, Fixtures & Equipment: $5M

• Cash & Receivables: $2M

• Intangible Assets (Goodwill/Brand): $???

That last line—intangible assets—is either not valued at all (if you built the brand organically) or massively undervalued due to accounting conventions.

CFOs and ownership can see the $50M building. They can see the $2M renovation proposal. They can't see the brand equity. So they don't invest in building it.

The capital allocation result looks like this:

Lobby Renovation: $2M ✓ Approved
Justification: Tangible, depreciable, shows up on balance sheet, drives ADR

Distinctive Guest Experience Program: $200K ✗ Denied
Justification: Intangible, can't depreciate, ROI unclear

Here's the irony: In bankruptcy, that $2M lobby renovation gets liquidated for maybe $200K—ten cents on the dollar. But brand equity? Hudson's Bay just proved it can command premium prices.

The hotel industry is trained to think about RevPAR, ADR, occupancy percentage, and CapEx ratios. We're not trained to think about brand equity growth, customer lifetime value, or intangible asset appreciation.

So here's the question hotels should ask but almost never do:

"What percentage of our asset value is dependent on this specific physical location versus our brand?"

For most hotels: 95% location, 5% brand.

For Aman, Soho House, or Ace Hotel: Maybe 30% location, 70% brand.

The proof? Aman has opened over 30 properties worldwide using the same brand. Each new property succeeds partially because of the brand itself, not just the location. That's brand equity working as a tangible business asset—portable, scalable, valuable.

The Systematic Playbook: Three Mechanisms That Build Brand Equity

Not "invest in marketing." Not "create better experiences." Those are too vague.

Here's the systematic approach to building intangible assets that actually compound:

Mechanism 1: Physical Artifacts (Environmental Cues in Guests' Homes)

This is objects guests take home that embed your brand in their daily routines.

Why it works: The endowment effect means once they own something, they value it more. Environmental cueing means daily exposure strengthens memory. The peak-end rule means the experience extends beyond checkout.

The Hudson's Bay parallel: Bay blankets in homes created ongoing brand presence worth $16M to a buyer.

What hotels should do:

Don't give: Branded pens (no one uses), cheap keychains (drawer garbage), disposable amenities (left behind).

Instead give: High-quality items guests will actually use daily. Premium slippers, robes, coffee mugs, tote bags, reusable water bottles.

The criteria: Daily use + superior quality + emotional connection + subtle branding.

The budget math: $15-25 per guest for a high-quality take-home item. Compare this to retargeting ads at $2-5 per impression for temporary attention. Physical artifacts deliver $0.04-0.12 per daily impression for 42+ days minimum, and they drive direct repeat behavior.

The ROI: If just 20% of guests who receive items book again within 12 months, and your average booking value is $2,000, then a $20 investment generates $400 in return. That's 20x ROI. Plus word of mouth and brand equity appreciation that doesn't show up immediately but compounds over time.

Mechanism 2: Distinctive Experiences (Story-Generating Moments)

These are signature service moments or rituals that guests tell stories about.

Why it works: We judge experiences by peak moments, not averages. Stories guests tell become free marketing while reinforcing their own memories. Unexpected generosity triggers reciprocity—the obligation to return the favor.

The Hudson's Bay parallel: The five stripes weren't just a design. They represented specific experiences—shopping trips with parents, Olympic ceremonies, childhood memories.

What hotels should do:

Examples that work: Magic Castle Hotel's Popsicle Hotline (red phone, white gloves, silver tray). Forsthofgut's Rocky the reindeer for kids (creates attachment). Ace Hotel's vintage photo booth in lobbies (shareable content).

The criteria: Distinctive (can't be found elsewhere), repeatable (works for every guest every time), story-worthy (generates natural word-of-mouth), low cost (usually operational, not capital-intensive).

The budget math: Magic Castle's popsicle cost is roughly $0.50 per delivery. The PR value? Featured in Stanford GSB case studies, thousands of reviews mentioning it specifically. ROI is immeasurable—they rank #16 out of 371 LA hotels despite modest facilities.

Mechanism 3: Sensory Signatures (Proprietary Recall Triggers)

These are distinctive sensory elements that trigger instant brand recognition.

Why it works: Sensory memory—especially smell, sound, and taste—triggers stronger recall than visual cues. Classical conditioning creates associations between the sensory cue and positive experiences. And they're proprietary, so competitors can't easily replicate them.

The Hudson's Bay parallel: The five stripes create instant visual recognition. The pattern itself triggers memories even without the Hudson's Bay name visible.

What hotels should do:

Examples that work: Westin's White Tea scent (proprietary fragrance in all properties). Ritz-Carlton's specific music playlist in lobbies. St. Regis's champagne sabering ritual at 5pm. Hotel Café Royal's signature cocktail.

The criteria: Proprietary (you own it, competitors can't copy), consistent (same across all touchpoints), memorable (distinctive enough to be recalled later), positive association (tied to pleasure, not just recognition).

The budget math: Westin's White Tea scent required one-time development cost plus ongoing licensing fees. The result? Instant brand recognition in every property. The secondary effect? Guests buy the scent for their homes, extending brand presence beyond the hotel.

The ROI is difficult to isolate precisely, but Westin reports increased brand recognition. More importantly, it creates consistency across their portfolio. Guests know they're in a Westin before they see the logo.

The Practical Budget Reallocation

"This sounds great, but I don't have budget for brand-building."

You do. You're just spending it on the wrong things.

Here's the reallocation strategy:

Current CapEx allocation (typical hotel):

• Major renovation: $2M

• Lobby redesign: $800K

• Room refurbishment: $1M

• Pool/amenities: $200K

Proposed reallocation:

• Major renovation: $1.8M

• Lobby redesign: $700K (cut 12.5%)

• Room refurbishment: $900K (cut 10%)

• Pool/amenities: $200K (unchanged)

• Brand Equity Program: $200K (NEW)

• Physical artifacts: $100K (premium take-home items for 5,000 guests = $20/guest)

• Signature experiences: $50K (operational budget for distinctive services)

• Sensory signatures: $50K (scent/sound/taste development)

The justification to ownership: "This $200K creates enterprise value that compounds annually and shows up as intangible assets on our balance sheet. The lobby renovation depreciates 10% per year. This appreciates if executed well."

Or start smaller with a 90-day pilot:

• Budget: $20K

• Cohort: 1,000 guests

• Intervention: High-quality take-home item ($15/guest) plus one signature service moment ($5K operational)

• Measurement: Track repeat booking rate at 6 months versus control group

Success criteria: If repeat rate lifts by 5+ percentage points, your ROI is positive. Example: 20% repeat rate increasing to 25% = 50 additional bookings = $100K+ revenue on a $20K investment.

The Three Objections CFOs Will Raise

Objection 1: "We can't measure the ROI."

Yes, you can. Just not the way you're used to.

Measurement framework:

• Direct: Repeat booking rate (cohort analysis with control group)

• Indirect: Brand equity tracking (survey-based valuation)

• Proxy: Guest home presence (how many guests report using items 6+ months later)

• Financial: Customer lifetime value increase

The comparison: "You approved a $2M lobby renovation based on projected ADR lift of $10-15. That's also hard to isolate from other factors. We're just applying the same logic to intangible assets."

Objection 2: "This only works for luxury hotels."

Brand equity scales to every price point. The tactics adjust, but the principle doesn't.

By segment:

• Luxury ($500+ ADR): Premium robes, artisan toiletries, signature scent. Budget: $30-50 per guest.

• Upper Midscale ($200-300 ADR): Quality slippers, reusable water bottles, locally-made tote bags. Budget: $15-25 per guest.

• Midscale ($100-150 ADR): Branded travel accessories, regional specialty foods, practical items. Budget: $8-12 per guest.

• Budget ($80-100 ADR): Single high-quality item (coffee mug, water bottle) plus free distinctive service. Budget: $5-8 per guest.

It's not about spending more. It's about being distinctive at whatever price point you operate.

Objection 3: "How do I justify this to ownership?"

Frame it as enterprise value creation, not operating expense.

The pitch: "We're proposing to systematically build intangible assets that increase our enterprise value. Hudson's Bay proved these assets are quantifiable—their brand sold for $16 million when everything physical was worthless. Currently, our hotel's value is almost entirely tied to real estate. If we build brand equity, a portion of our value becomes transferable. We're requesting a 10% reallocation of renovation budget for a pilot program. If it works, we scale it. If it doesn't, we learned something for $200K—less than the cost of the marble we were going to put in the lobby."

What to Do Monday Morning

Don't wait for budget approval. Start with these:

Action 1: Audit your current "home presence."

Ask 20 recent guests (6+ weeks post-checkout): "What from our hotel are you still using at home?"

If the answer is "nothing," you have zero post-checkout brand presence. Identify what you could give that they'd actually use.

Action 2: Create one signature moment (costs almost nothing).

Pick one touchpoint in the guest journey. Design something unexpected and memorable. Examples: Handwritten welcome note with local insider tips. "Midnight snack" delivery of cookies and milk at turndown. Polaroid photo at checkout (instant memory artifact).

Cost: Operational, not capital. Test it for 90 days and measure mentions in reviews.

Action 3: Calculate your brand's bankruptcy value.

Serious question for your leadership team: "If we went bankrupt tomorrow and had to sell our brand separately from our building, what would it be worth?"

How to estimate:

• Can the brand open in a new location and succeed? (Location-independent brand equity)

• Do guests seek you out specifically, or just book a hotel in the area? (Brand demand versus location demand)

• Would another operator pay a premium for your name, systems, and reputation?

For most hotels: Close to zero.

For hotels building brand equity: Potentially substantial.

This exercise clarifies whether you're building a real estate asset or a hospitality brand.

The Question Every Hotel Should Answer

Hudson's Bay operated for 354 years. They were an iconic Canadian brand. They failed operationally—couldn't adapt, couldn't compete, couldn't survive the retail apocalypse.

But when the creditors finished taking everything physical, when the stores were empty and the inventory was liquidated, the five stripes were still worth $16 million.

Your hotel's physical assets depreciate every year. That lobby renovation? Worth 50% less in five years.

But brand equity—if you build it systematically—compounds.

The three ways to build it:

1. Physical artifacts in guests' homes (environmental cues)

2. Distinctive experiences guests tell stories about (social proof)

3. Sensory signatures that trigger instant recall (proprietary associations)

The investment: Reallocate 10% of your renovation budget. Start with a pilot. Measure repeat rate lift. Scale what works.

The question: "What's our brand worth separate from our building?"

If you can't answer that, you're not building a hospitality brand. You're managing a real estate asset.

And real estate assets get liquidated for pennies on the dollar.

But brands? When everything else is gone, they're still worth millions.

Canadian Tire just bet $16 million that the second strategy works.

Hudson's Bay went bankrupt. But somewhere in Canada, someone's still wrapping up in a Bay blanket with five stripes. And that's worth $16 million.

What's in your guests' homes right now?