by Alan Campbell, Featured Contributor
Branding: To be or not to be
IT HAS BEEN a very busy year so far, for the industry as a whole. After attending various conferences and conventions there seems to be a consensus that the independent brand is reinventing itself. The top hotel chains are adding independent brands to their collection. With all of the OTA’S that collect millions of dollars on commissions, the industry is looking for ways to balance the scale somewhat. Large hotel chains that launch independent brands have the advantage of utilizing the chains market and reservation expertise. In many cases without having to use third party web sites for reservations.
Now for those properties that are not affiliated with alarge hotel chain, what advantage do they have? What disadvantage do they have?It is something to consider when opening a new property. Owners have to ask themselves, what if any advantages do the brand offer. Brands are constantly changing their interior layout, and adding expensive additions. Branded owners must comply in order to sustain the brand. Holiday Inn express changed their design several times in the past years. There were a lot of those properties that had to convert in order to stay in business. The new mandates from HI were very costly and some owners just did not have the resources to comply.According to HI a lot of the express brand were not up to par and needed to be removed.
The independent property has a style all its own. It’s not deepened on a corporate culture. The design can pretty much be anything the owner’s desire. Does this create a problem? Perhaps, for with independent properties you aren’t sure of what you will get. However when browsing the internet for independent properties, you will notice a change in how they are represented. Some of the independent properties web sites have an ease of access that branded hotels don’t have. It will come down to the customer’s decision as to what property to book. Having said that, branded properties as a whole have the advantage of a consistent image of what the customer will get.
The decision to go independent is not to be taken lightly,owners must be aware of the issues and financial obligation when undertaking an independent property. I will use a current example, since I am involved in an independent property that will open in 2015. For the time being, permits and licensing are under the name of The Chesterfield Hotel. It will be an independent property, it will not carry a flag, and will probably be one of a kind property. The concept is to rival the Dubai properties star rating. It is being built around the concept of “The Customer” It will be a 136 key suite luxury private property with all of the amenities that go with this type of hotel. In the discussions concerning a branded name property we discovered that there is not a brand on the market that can offer this type of luxury that the owners were looking for. The marketing plan for the property is aimed at a particular segment of the traveling public. It will be a luxury hotel property specially designed with that segment in mind. I have seen the amenities and layout of this property, and it does not compare to anything that is out there today. It is a totally new concept in hotel design as well as what it will offer.
In the past it was difficult for independent properties to compete with the flag properties, but today independents have secured a foothold in the market. They are able to compete more closely with flag properties. I will also say that there are some flag properties that are horrible and need to be removed from the system, but chains are reluctant to do so. So as the year progresses we will see a lot more “Independent” hotels that are associated with the large chains, yet will operate on their own. It will also give rise to smaller boutique style properties that will emerge in secondary markets. The year is still young a lot of things can still happen.
The independent hotel revolution is on its way!!!!!!!!!!!
This is a great article. However, I must add that it does not define enough the independent hotels segmentation, which can really compete against branded hotels. It is not that easily simple as described. Location, technology infrastructure including marketing, organizational design, structure & change, and TQM are still the four dominant factors, which must be adopted in order to run successful independent hotels’ operations. Investors cannot ignore them. Before independent hotels developers embrace the entire context of this article, they should delve into an in-depth analysis to establish the short-term and long term business model and strategy. Nevertheless, such an article has just opened the door to heighten the decision-making process discussions toward: to brand or not to brand.
Wesner St Vil