Unveiling the Hidden Power :- Independent Hotels Outshine The Chain Properties
In the past few months, while reading the news about hotels, I noticed a lot of talk about big hotel companies joining together and buying each other. Everyone is discussing how this has led to the rise of huge hotel chains in the industry.
However, I think independent hotels have a great chance to do well in the current market. Right now, they are thriving and, based on what I’ve seen, they are doing better than chain hotels in terms of their performance and results.
Actually, When we take a look at top travel magazines we can see that independent luxury hotels often outperform chain hotels. if we explore the offers on popular lifestyle travel websites we’ll notice that they primarily focus on providing authentic experiences that feature original boutique hotels and luxury independent hotels.
Millennials, the group of people born between the early 1980s and the mid-1990s, are considered a very important and valuable market. It turns out that they really like unique and personalized experiences instead of the usual, one-size-fits-all options. This is good news for independent hotels because they can offer more special and authentic experiences to attract these young travellers in the coming years and yes , this does not only count for the high-end or luxury market but in the mid and budget or economy segments too.
New and innovative ideas with unique designs and personal guest service are becoming increasingly popular and gaining popularity every where. Even in the youth hostel market, we have witnessed significant improvements in the past few years, with the emergence of some really cool and exciting new places to stay.
Have you ever wondered What has caused or sparked this trend? Well, the world has changed, and people have become more aware and vocal about their desires. Nowadays, consumers know what they want and value more. They don’t want a generic and mass-produced experience. Instead, they seek a good time in a pleasant environment. The industry is now understanding and adapting to these preferences.
Review scores and Online Travel Agencies (OTA) have equalized the distribution reach for both independent hotels and chain branded hotels. By utilizing these online platforms, independent hotels can now reach a global audience, Moreover, the unique experience offered by independent hotels leads to excellent review scores, which further boosts their global reach and exposure.
Here are Advantages of independent hotels compared to chain properties:
- Putting guests first, focusing on their preferences instead of adhering strictly to chain brand standards
- More room for creativity and individuality in design and offerings, resulting in a distinct identity
- Reduced bureaucracy, allowing greater attention to unique guest experiences and special initiatives.
- Lower overhead costs due to fewer contributions to chain revenue and marketing fees.
- Greater flexibility in commercial and distribution strategies, without constraints from chain regulations.
- Stronger emphasis on local experiences in marketing efforts, providing a more authentic appeal.
- Original concepts lead to higher guest review scores, generating increased exposure
Independent hotels have a significant opportunity to capitalize on the market gap left by the chains.
From managing a portfolio of multiple independent hotels, each with its distinct identity, we have observed that these hotels are surpassing their competitors in the market. They are generating higher Revenue per Available Room (RevPAR) and Net Operating Income (NOI) percentages compared to typical hotels.
The freedom offered by independent hotels enables us to create assets that yield better returns on investment and improve the bottom line, exceeding what could be achieved with chain hotels. Not only do independent hotels stand out with their unique concepts and services, but we also employ innovative techniques in revenue management, distribution, and marketing strategies to drive exceptional financial results.
I foresee that in the next 5 to 10 years we will see many more independent hotels being developed than ever before
After talking to numerous hotel owners, it’s evident that they are becoming increasingly frustrated with the strict rules, regulations, and expenses imposed by chain hotels. They feel restricted in their ability to drive business to their individual properties, and upon careful evaluation, many are realizing that the costs may not justify the returns. In fact, a few courageous ones have already taken the step of removing the chain brand flag, and the outcomes are very promising
The secret to success lies in having a fun and original idea, along with a dedicated team that genuinely cares about hospitality. When you provide a one-of-a-kind and personalized experience to your guests, your hotel will thrive and receive excellent review scores, putting it at the top of the charts. If your hotel has a story worth telling, it will flourish and become highly regarded by guests.
Piyush Bhatnagar II Director-Strategic Alliance II 3Q Progressive Alliance