It seems to me that the great diversity that the Hospitality industry offers us today is undoubtedly the best thing that can happen to such an imposing and huge industry.
Alfredo Lamadrid*
The evolution manifests itself in many and diverse ways, not only in the ease that guests have today to be able to generate a Booking only with a few Clicks from any device, for their next stay, whether for pleasure, business or even health, a range more travelers and type of tourism, definitely a trend and growing.
An eternal discussion among travelers is to be able to choose between an independent hotel over a chain hotel or a global presence. It seems to me that independent hotels are to some extent underestimated and I think they have great potential, but it is a reality that they must take very seriously to invest in technology and be very attentive to what guests require today, listening to all their generational varieties and diversity of needs.
What is an independent hotel?
An independent hotel is an independently owned and operated hotel. It does not allow any other owner to use its name or brand. Independent hotels are likely to operate in a single market or in a limited number of markets that are likely to have limited capacity for services or products.
The number of independent hotels has a multifaceted range of accommodation, food & beverage and leisure products, with a variety of price packages and a relatively large number of employees. These hotels offer a heterogeneous marketing offer, so it would be very complicated to provide an unconditional guarantee. Independent hotels are likely to face increased uncertainty regarding the market.
What are chain hotels?
A chain hotel is a hotel that is part of a series of hotels or a group of hotels operated by the same company or owner. Opposite an independent hotel, it is a chain-affliated hotel. The hotel chain is a company that manages, through a unique management of a series of hotels located in different areas.
They can be total or partial owners of the hotel and they manage its administration, marketing and promotion. The global hotel industry is dominated by hotel chains. More than 5 million hotel rooms in the world are controlled by 300 hotel chains and 3.9 million hotel rooms are controlled by the top ten hotel chains.
Performance: Last year, independent hotels experienced strong advances in performance metrics. Even though the occupancy gap between luxury chain hotels and independent hotels is widening, the gap in the average rate is closing and overall, high-end independents continue to make strong gains in average occupancies.
Distribution: Chain hotels have long been known for having an impressive distribution network compared to independent ones. This for independent hotels fortunately changed by extremely solid steps with the rise of the Internet in the last decade and the growing possibilities of distribution and marketing have increased exponentially, I would think that today they can be almost in equality of circumstances.
Standards: It is often overlooked that independent hotels have their own standards and best practices, as well as hotel chains; the only difference is that the standards of a chain must be followed in all its properties. One positive thing to keep in mind is that independent hotels have greater flexibility to change these standards or policies when it is necessary to adjust to the changing needs of the market.
Guest loyalty: Loyalty programs are a great asset for chains that can be scaled in a wide number of hotels and brands, they can encourage their employees in many good ways. This is something that independent hotels cannot take to those scales. However, I think the evolution of loyalty programs is undergoing a change in today's times. Millennials for example are becoming a larger proportion of the travel market, and this demographic is not yet as well known as loyal to any specific hotel or brand, as they are constantly and permanently looking for new experiences in new environments.
Evolution and diversity in guest preferences: As we mentioned in the previous point, it marks a clear trend that consumer preferences are changing towards authentic and unique commitments in their travels. Interestingly or not so much, in the US 59% of millennials stayed in independent hotels last year, which is 20% more than baby boomers.
What is a reality for the entire hospitality industry is that Millennials will continue to send shock waves to the entire industry, and hotels 5 or more years old from the Opening without the appropriate renovation and investment in technologies in all possible nuances, will feel independent, even if they are from Global brands.
5 reasons are very solid not to rule out at any time an independent Hotel for your next stay
1. Fewer obstacles and cost efficiency.
Chain hotels must follow strictly defined rules and patterns, identical for each member of the group. Their actions are subject to a strict framework included in the cooperation agreement on legal issues. For an independent hotel, however, the space is open. There are no rules imposed from the top. The owners of such hotels can spend as much as they see fit on sales, marketing, management and of course on technology. Surely independent hotels can open with less money and fewer obstacles.
2. Flexibility & freedom
Independent hotels are free from restrictive regulations of agreements. Such freedom means that they can take advantage of creative solutions and try various sales tools, which are prohibited for the chain's hotels. Independent and boutique hotels give their owners greater joy, are cheaper and allow greater flexibility of actions. Although it is easier to manage a hotel chain, since all you have to do is follow strict patterns, interesting solutions are a much more solid tool.
3. Personalized vision and approach
The strategy and management plan in the chain's hotels are always the same, regardless of the location. Independent brands are different, which is why managing such a hotel requires a lot more discipline, in fact. A necessary factor here is an individual plan: A beach resort or property in the financial center of the city or a boutique hotel in the center of the city, will need personalized strategies to generate the experience required for each of their guests regardless of the generational order, nationality or type of Traveler.
4. Disruption and out-of-the-box thinking over Loyalty Programs
Chain hotels can attract customers with aggressive loyalty programs, which means, first of all, attractive discounts or benefits that distinguish the stay of a hotel that belongs to a brand of global or regional presence. However, for an independent hotel, the task seems to be a much more difficult obstacle to overcome. They must be totally disruptive and get out of the box at all times, for this to happen, independent hotels must defend their position and create their own brand, unique and recognizable and in some cases exceptional unrepeatable. The property should be filled with a comfortable style and atmosphere. It's a holistic process that should include: interior design, F&B, entertainment, music, technology, innovation, and definitely quality of personalized service.
5. Perception of your guest vs revenue
Scientific studies have long shown us that perception has a great influence on evaluation and decision-making. When we talk about hotels, it seems quite similar, how the hotel is perceived, so it will prosper. Today's travelers value the products they come across and are willing to pay more money in a hotel that offers not only comfort, but also creativity and innovation. In an organic consequence the hotel reaches a greater number of guests and consumers and surpasses the competition immediately.
Independent hotels have immense potential. Therefore, its popularity among owners and investors is almost obvious. Boutique hotels allow you to adapt the marketing strategy to the individual case and not the other way around. These hotels can express their spirit and come up with interesting solutions. Originality is like a lure, attracting thousands of tourists from all over the world and generating much higher profits than in the case of the world-famous chains.
Definitely to put into context everything we have talked about we must point and highlight Grupo Xcaret, they are the clear example of what is today the immense potential of independent hotels with the right vision, strategy and passion to generate a unique and unrepeatable brand.
*Alfredo Lamadrid Alducin is an expert consultant in hospitality technologies; Managing Director @ PDT Positive Disruptive Thinking Hospitality Guest, Managing Partner @ HOSTEC Mexico. You can contact him through the [email protected] and [email protected]
