During a session at the recent Lodging Conference, independent hoteliers talked about changes they are seeing in the industry, from types of hotels to loyalty programs and lenders.
PHOENIX—The hotel landscape continues to evolve with the number of new entrants, loyalty programs and types of lending, but independent hoteliers believe there’s still a spot for their properties among the brands.
On the “Independent hotels—Making a success of going it alone” panel at The Lodging Conference, Richard Millard, CEO and chairman of Trust Hospitality, said soft brands, brands and boutiques are not enemies.
“I used to be the anti-brand guy when I came to these meetings, but now I’m ashamed to say, we probably have seven or eight soft-branded hotels. But it also depends on where you are, what the market is,” he said. “I don’t need an Autograph in Manhattan; I don’t need an Autograph in Miami Beach; but we may need one … on the outskirts of Philadelphia or whatever. So there’s a place for all of us.”
Millard added that the way business is done in the hotel industry has changed a bit. For example, Trust is using e-commerce more in its business.
“Just to give you an example of what’s happened in the business: In 1999 in our company, we did less than 5% of our business through e-commerce …. Most of us didn’t even have a website, or whatever it was. And last year as a company, like it or not, we did more than 60% of our business through e-commerce, so that changed the business model,” he said.
There have also been some shifts in the lending community for independent hotels.
Bill Nassikas, president and COO at Westroc Hospitality, said Westroc has to “fight for our money,” and always has to pay out of pocket because the lender “wants to see some skin in the game.”
“We’ve been fortunate enough to have the capital resources,” he said. “The money is the common denominator when it comes to breaking ground on a property. You’ve got to have some standing power, and we had that. But at the same time, the lending community recognizes the (hotelier) is … someone who is going to walk their talk. I wouldn’t lend to a hotel developer, operator or owner unless I knew they were going to be at that hotel, whether it’s once a week, twice a week or seven days a week.”
For Hersha Hospitality Management, a nontraditional approach to loyalty is needed because all of the company’s properties are different, said President and CEO Naveen Kakarla.
Hersha aims to give guests instant-gratification perks and make a connection with the guest around the stay, Kakarla said. That includes bringing in items from local businesses to give to guests.
He added that the company does this by obtaining consumer information to drive repeat stays, which in turn hopefully increases direct bookings and decreases the amount of dependency on online travel agencies.