How independent hotels can remain relevant in today’s market
When it comes to the business of serving others, the hospitality sector occupies a unique segment of the market. It’s a wide industry that collects numerous specialties under its umbrella. As its name suggests, the hospitality industry’s main purpose is to provide leisure services and customer satisfaction to clients or consumers. The defining aspect of such an industry is the provision of luxury, pleasure, enjoyment, and exceptional experiences, as opposed to essential needs.
While the industry generally encompasses a different types of service departments – restaurants, eateries, and inns – hotels are perhaps the cornerstone for a simple reason. A few fields of the hospitality industry have their own separate niches, all falling under the same umbrella, but hotels are where the different areas of the hospitality industry overlap. Food services, entertainment, accommodation, and other leisure-based activities are provided at the hotels.
Much like other industries, the hospitality sector faces a tug of war among various hotels. Hierarchies are at play in the hospitality sector, and deep-pocketed influence from the brands can run deep.
It’s not uncommon to see larger brands suppressing smaller ones or acquiring their assets outright. What should have been a growth opportunity for a property is now a challenge as they face larger-still competitors. As a result, independent hotels are disappearing as the chains grow. Despite the crushing competition, smaller hotels can still leverage the spots that big chain hotels cannot reach. Here are just two ways that small hotels can remain relevant in the market.
1. The Human Touch
Despite commanding flawless service in the market, the giant chain hotels are solely interested in providing revenues to their shareholders. This is a space where small independent hotels can make their mark. Usually, the biggest difference is that the large hotels follow an organization-based structure. Conversely, independent hotels typically follow more of a family-based setting where revenues are used to feed a family or sustain a couple. The major difference between the two is the human element, which can be an enormous advantage.
Modern-day consumers respond more vibrantly to the human element of a brand. Organizations spend a lot of money on humanizing their brands, but the larger the chain is, the harder it is to follow this trend. On the other hand, the small and independent hotels already possess the element that can grant them a special edge over their bigger competitors. The internet is filled with stories where a small independent settlement followed an overnight success because of influencers sharing their stories. Small hotels can utilize this tactic to secure peak visibility on social media platforms.
Often, influencers highlight the human element and demand zero charges for the service they provide to small hotels, while larger, corporate chains are exempt from this facility. In a way, what comes as a struggle for chain hotels comes easy for small independent hotels.
Apart from enjoying the human-based element on the internet, the small hotels can also be quite popular among locals.
2. The Power of Soft Branding
Holding one’s ground is tough in a fierce market, and a helping hand from a well-established brand never hurts. The stakes double when a small hotel tries to retain its independence and struggles to keep its doors open.
In such a scenario, the privileges of a well-established brand are quite attractive. Soft branding can provide the best of both worlds, giving the small hotel much-needed exposure. Other than that, hoteliers enjoy flexible contract terms and lower fees.
It’s important to mention that soft branding isn’t without restrictions. However, soft branding has successfully established boutique hotels as a new class of hotels. Over time, its terms evolve to suit hoteliers better and can be a worthy option to consider.
Ultimately, small hotels will consistently face the brunt of the market, especially when they operate as independent settlements. They always face the perils of either closing their doors due to low footfall or getting acquired by a larger brand on strict terms. However, there are spots that small hotels can leverage, such as the inclusion of human elements in their PR and availing the opportunity of soft-branding to acquire the needed customer reach.
is a former member of the AAHOA Independent Hoteliers Committee (2021-2022), the Hospitality Director for Paloma Realty Partners, and he specializes in management consulting and brokerage services. He can be reached at [email protected] or (323) 717-9698.
