Independent hotels are ripe for revolution
14 FEBRUARY 2014 7:35 AM
Changing consumer tastes favor independent hotels that are able to provide authentic experiences to guests.
If Charles Dickens worked in today’s hotel industry, he might tell a tale of two hotels: the large branded hotel and the small independent hotel. His story would likely depict the days leading up to a hotel industry revolution as it’s truly the best of times and the worst of times for those operating in today’s climate.
As a backdrop for Dickens’ modern-day tale, there’s a desperate struggle taking place as independent hotels are being pushed to the verge of extinction by larger, branded hotels. Similar to how the Olive Garden and Chili’s dining experience has slowly replaced the local, family-owned restaurant experience, the large chains are stomping out the independent hotel experience. In short, the hotel industry is having its colors bled in order to achieve various shades of grey.
The rise in branded hotels stems from the challenges independent hoteliers have faced in recent years. Some of the nation’s unique hotels, rich with local culture and historical charm, are finding it difficult to compete in an environment that has them at a distinct disadvantage.
Without the scale and financial clout of a big brand, small hoteliers are forced to work harder or less efficiently to achieve key business objectives, from reservations to renovations. Independent hotels often lack the reservation systems, global sales force, or the national visibility available to chain hotels—making them twice as reliant on the expensive online travel agencies to drive bookings.
Also, since the recession, finding a lender who will finance a new build or a renovation in the hotel industry has become nearly impossible if you’re a small, independent operation. And for those who do secure a loan, the rates are less than favorable.
Couple these challenges with the rise of the “fauxtique”—the chain version of a boutique hotel—and the competition has also heightened. Starwood Hotels & Resorts Worldwide’s Aloft and InterContinental Hotels Group’s Hotel Indigo brands, for example, are both designed to provide travelers with “customizable experiences” while still promising the consistency of the chain standards. While these fauxtiques resemble independent hotels from a distance, up close they lack the true authenticity that many travelers find at an independent hotel. After all, you can’t mass-produce uniqueness.
Meanwhile, companies such as Marriott International and Choice Hotels International have also introduced their “transparent brands,” Autograph Collection and Ascend Collection, into the mix. Through these transparent brands, many independent hotels have been able to join a branded chain while still remaining independent—or so they think.
Many of these transparent brands require independents to adhere to the chain standards, everything from how ice is distributed to what art is deemed “appropriate” to the selection of melon that must be made available at breakfast. These kinds of constraints and mandates water down the very essence of what made the hotel unique in the first place.
However, a revolution is brewing. For the same reason more people are choosing to buy their vegetables at a farmers markets instead of the supermarket, travelers are starting to choose a hotel based on the true, local cultural experience that independent hotels offer.
Consumer preference is shifting away from big brand loyalty with a new realization that authenticity is more important than consistency. A 2011 study by PGAV Destinations found that 78% of millennial travelers want to experience “something new” when they travel, a much stronger preference than prior generations.
While travelers once appreciated the sameness of a chain hotel, knowing wherever they went the next Westin Hotel was always going to look like the last Westin they stayed at, that’s no longer the case. Consumers now seek out authentic, local experiences and desire culture and color as part of their hotel stay.
By deeply assimilating with their local communities, independent hoteliers are able to provide these authentic experiences for their guests. They are not restricted to the conformity of the chain brands, allowing them to provide guests with the unique and one-of-a-kind travel they want.
The Internet has changed the way travelers learn about and select a hotel, with sites such as TripAdvisor leveling the playing field for independent hotel operators. In an era where traditional star ratings are becoming cliché and void of meaning to consumers, these sites offer a more granular, personalized view into the true hotel experience. Travelers are becoming less reliant on the promise of a brand, and more reliant on the word of fellow travelers to communicate what type of experience that the hotel will deliver.
Search TripAdvisor and you’ll see where the independent experience is gaining top marks in just about every market. For example, just a few of the 25 properties listed on TripAdvisor’s Travelers’ Choice 2013 top hotels in the U.S. are big chain brands, and one of those is a recently converted independent.
Additionally, seismic shifts in technology, including open source software, crowdsourcing and cloud computing, have spurred the creation of new tools for independent hoteliers. Independent hoteliers can now easily tap into new business-building resources, such as SpeedRFP and iHotelier, which can enhance marketing, bookings and customer loyalty. Survival tools that were once beyond the reach of an independent hotelier are now available at their fingertips.
Yes, it’s still difficult to remain independent, but change is afoot and the future for these hoteliers is bright. Fiercely independent hoteliers should no longer feel forced into the hands of a chain brand. Now is the time for them to embrace their independence.
It might be the best of times or the worst of times, but for independent hotels, even Dickens would have to recognize a revolution is coming.
Jeffrey Low is Founder and CEO at Stash Hotel Rewards, the largest loyalty program for independent hotels in North America. Stash helps great independent hotels fill more rooms, win more groups and meetings, and recognize their best guests. US News & World Report recently ranked Stash as one of the Top Hotel Loyalty Programs in the US. Stash has also been featured in numerous publications including The New York Times, Inc., and Condé Nast Traveler, and it was named an Innovation of the Year by Hotel News Now.
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