Speakers on a panel at the recent Direct Booking Summit in Dallas shared strategies for independent hotels competing against brands and negotiating with OTAs for guests.
DALLAS—Independent doesn’t have to mean alone.
On a distribution playing field which pits independent hotels against brands and includes sometimes-tense negotiation with online travel agencies, there can be strength in numbers, speakers said on a panel at the Direct Booking Summit this October.
“As independents, it’s important that we talk to one another and have a relationship,” said Gary Hawkins, VP of revenue strategy at Sydell Group, which creates and manages independent and boutique hotels that include NoMads in New York and Los Angeles; The LINE in Los Angeles, D.C. and Austin; Freehand in Miami, Chicago, Los Angeles and New York; and The Ned in London.
He called it “a wolf-pack mentality,” because “if we’re out on our own and we get separated from the pack, we’re going to get picked off.”
That’s particularly true in negotiating contracts with OTAs, Hawkins said.
“Compared to bigger brands, one of the biggest disadvantages is leverage power against OTAs,” he said. “My opinion is the relationship with OTAs has never been more tense. More trust has been eroded by shady tactics, from breaking parity to basic, uncoupling of package rates being sold independently to members-only rates.”
Through an ongoing dialogue with other independents, hoteliers can resist “being bullied into accepting these contracts … and collectively can bargain,” he said. “Expedia is not going to turn off an entire market.”
Channels and content
Emerging as another competitive edge right now is the availability of Airbnb as a distribution platform for boutique hotels, speakers said.
“There’s a lot we can learn from Airbnb,” said Carlos Aquino, VP of sales and business development at Tafer Hotels & Resorts, which manages independent luxury resorts in Mexico.
“How they’ve positioned themselves is how independent hotels should. We look at Airbnb as an inspiration rather than a threat.”
Hawkins said Sydell Group sees advantages to listing its properties on Airbnb, including a smaller commission rate than what is typical on OTAs and a platform which reaches the specific and ideal segment of guest for those properties.
“We do a lot of revenue through Airbnb with our hotels. As they get into hotel distribution, my thought is, ‘Welcome,’” he said.
Ultimately, independent hotels win bookings by having a clear value proposition and targeting and communicating that to the right guests, said Marissa Brady, director of hotel direct digital marketing at The Leading Hotels of the World, a collection of more than 400 independent luxury hotels in more than 80 countries.
“Guests are craving the experiences on property with the content we provide,” she said. “We have to be authentic to what our guests are looking for and deliver content experiences, which we can better enable without the red tape of a brand.”
Social media is an important channel for communicating that value, because it can be very visual, Hawkins said.
In all marketing efforts, it’s just as important to know who your customers aren’t as it is to know who they are, he said.
For example, he said, his company knows that big corporate groups are more likely to negotiate and ultimately book with the bigger brands. So the hotels in Sydell’s portfolio go after “smaller, more creative” groups—such as those in the fashion and entertainment industry, and those looking to book incentive-type trips, he said.
The “little things” that make your hotel different add up, Aquino said. And if you’re able to “tie it to emotion and what people do with (those things), it starts resounding more,” he said. As guests engage on property, it’s more likely “they’re going to remember you,” he added.
But that uniqueness must be authentic; if it’s not, guests will sniff that out, Hawkins said.
An independent hotel’s creative approach has to be “reflective of the sensibilities of (its) particular city, and also not in a cheesy way,” he said.
For example, he said, tying The LINE Austin to local history and flavor was more than “putting guitars in every room and saying, ‘we’re authentic.’”
True authenticity is “respectful to the community, additive to the community,” he said.
“We’re developers as well, and (as developers), you want to be well-received by the community you’re in; otherwise, you’re in for a tough tenure in that market.”
Independent hoteliers particularly should focus more of their time and energy on these concerns, as opposed to other more systematic work, Hawkins said.
“For better or worse, independent hoteliers have to do the same job with way less resources. We wear multiple hats, but if you employ smart people who have understanding beyond the narrow scope of their job, you have the ability to have fewer silos and work together,” he said.
“It’s important to fight the temptation to spend all of our time poring over reports and extracting warehouse data. … Decisions should be data-based and scientific, but you can bite off more than you can chew.”