Do independent hoteliers have the advantage?
Independent hotels offer a unique experience that’s often difficult to replicate with a branded hotel. While there are many advantages to national brands, guests often are drawn to the unique experience of staying at local, boutique properties. When envisioning a new property, hoteliers must consider the best strategies to embody their vision for the hotel. How can independent hotels be sustainable and compete with the national brands?
Before analyzing the advantages of both independent and branded hotels, let’s explore the evolution of hotel brands. For centuries, hotels were all independent and reflected the culture of the local community. The hotel’s location and offerings often were depicted in the naming, with monikers such as The Mountainview Lodge, The Downtowner, or The Sand Dollar Inn. In 1939, seven southern motel owners formed Quality Courts to take advantage of mass marketing and business referrals. Quality Courts United became the first hotel chain in the United States. By mid-century, other chains were being established including Hilton, Holiday Inn, and Sheraton. In the past 25 years, corporate hospitality groups have offered hundreds of different brands to American travelers. Currently, 70% of the 166,000 hotels and motels operating in the United States are branded.
Branded hotels come ready with a built-in customer base, allowing them the advantage of reaching a much larger audience. Hotel brands also have more support and resources for technology, marketing campaigns, and employee benefits. These advantages can lead to more competitive room rates for the customers.
THE OTHER SIDE OF THE COIN
Without the demands of a “brand big brother,” independent hotels can be much more nimble and tap into local energy. This freedom allows the hoteliers more creativity in differentiating their properties with authentic and memorable experiences. The national brands recognized the value of independent hotels when they began losing market share.
To combat the popularity of these local boutique hotels, the national chains established less prescriptive “soft brands,” allowing their franchisees the same creativity and flexibility typically associated exclusively with independent hotels. Soft brands have characteristics of boutique properties without advertising the (hidden) brand in the hotel’s name and signage.
Historically, the top priority for hotel selection was based around location and convenience. Later, guest preferences skewed toward branded hotels, as they were seeking the comfort and security in consistency from location to location. Guests also were attracted to the coveted hotel rewards programs associated with the larger, more established brands.
THE TRENDS OF TODAY
Younger generational hotel guests have shifted their priorities and often gravitate toward hotels with unique, local experiences. This paradigm shift puts less emphasis on location, convenience, and cost. The ability for independent hotels to tell an authentic story has worked to their advantage.
To be relevant in the shadow of the national brands, the independent hotel can partner with other local businesses to offer packages for corporate events, romantic getaways, and staycations. Keeping all partnerships local is paramount. These local collaborations include restaurants, specialized retailers, breweries, distilleries, and outdoor adventure amenities that cater to customer birthdays, anniversaries, and even their pets’ needs. These collaborations, in tandem with specialized rewards programs with other likeminded independent properties, help them remain interesting and relevant alongside the larger brands.
Being an independent hotelier is a daunting task. It requires hard work, creativity, and entrepreneurship. Studies have proven that independent hotels obtain significantly higher average daily rates (ADR), with lower occupancy rates. While this is especially true during times of economic expansion, branded properties have the advantage of higher ADR during economic recessions.
THE BEST OF BOTH WORLDS
If the advantages of a branded hotel become critical to the economics of an independent hotel, there is a viable alternative, reflecting the best of both worlds. National hotel brands often seek unique properties to acquire and include in their portfolio of soft brands. If your independent hotel has stabilized, has a proven track record and has curated a loyal customer base, it may be appropriate to seek a soft-brand opportunity with a national chain. As part of a larger national collection, your hotel can go through a fluid transition and continue the virtues and amenities expected and respected in local hotels.
Independent hotels have been important to their communities for centuries. In addition to providing places to stay, the hotel is often enjoyed as a local destination to socialize, eat, and drink. They’re managed by local ownership groups and offer guests access to many community amenities. These hotels tell the story of local culture and history. They offer authentic experiences.
Whether a soft brand or a truly independent boutique hotel, they should be treasured as a landmark in the community. If designed and marketed to celebrate the locale, independent hotels have the potential to be sustainable and have the longevity necessary to create lasting core memories for generations to come.
