The Benefits Of Being Independent
Being operationally nimble and flexible has served independent hotels well during the ongoing pandemic and in some cases enabled them to outperform their branded counterparts as a result, according to a few leading hotel owners and operators.
A trio of executives from companies which manage both branded hotels and independents weighed in on the latter segment during BITAC Independent Virtual Connect 2021 and a panel session entitled “Changing Paradigm: Extolling The Benefits Of Being Independent.”
Robert Habeeb, CEO, Chicago-based Maverick Hotels & Restaurants, described 2020 as a “good year” for the company’s independent hotels, which are primarily upscale properties in East Coast resort communities.
“It seemed like it was a year where smaller was better. I know that those independent hotels wouldn’t have performed as well if they were in urban markets, but where we were located we beat 2019,” he said.
Habeeb further added, “I do think there’s an interesting market shift in that people are timid. On any given night our little hotels were running more rooms than the Hyatt Regency Chicago and that’s very telling on where the consumer went during this pandemic. Big [hotels] intimidated people because there was a fear of loss of control. Whereas in these very small hotel environments where people are not coming in contact with a lot of people they feel like they can maintain some level of isolation.”
Furthermore, Aaron Olson, SVP, Hotel Operations, Arlington, VA-based Crestline Hotels & Resorts, pointed out that the company’s urban independent hotels that weren’t conference or meetings centered properties “thrived” during the past year.
“Our independent hotels were obviously able to react and respond a little bit quicker when things went south in late March of last year in terms of operating standards. There was much more flexibility to do what they needed to do, whereas the branded hotels were waiting for some guidance,” he said, later acknowledging that while it may have taken a little longer the brands “really did step up.”
Andrew Carey, CEO, Newport Hospitality Group, meanwhile, reinforced the value of the brands.
“Our experience this year has been that as travelers come back they’ve been looking more for our brand experiences versus our independent experiences. The guests have been more focused in on the extended-stay segments, in particular, so we’ve had a larger challenge with our independent full-service hotels. Operationally we have more latitude around the independents, but that doesn’t overcome the larger challenge of the guest demand side of it,” he noted.
One potential advantage for brands is a result of them having their own guidelines and protocols for cleanliness, which have been heavily promoted to guests. Olson noted that those who manage independent properties have had to respond accordingly.
“There may be a little bit more of a comfort level among consumers because of the way that the brands have marketed their cleanliness and safety programs. They’ve got a bigger voice obviously, which is why it was so important for us to really jump out in front of it and come up with our own standards for those independent hotels and really take in the best of what everybody out there was doing,” he said, further stressing the importance of providing such information on the hotel’s website.
Carey noted that the reality is that consumers have been policing cleanliness and safety regardless of whether or property is independent or affiliated with a brand.
“Once we got into June and July there was a group of travelers out there putting out onto the social media sites what the safety was really like for individual hotels. So you could have a branded hotel that had all the safety and security stuff you wanted, but they weren’t necessarily following it. So it really depends on the GM and the leadership within those entities,” he noted.
Carey went on to add, “I think broad strokes the industry did an incredible job making sure that we were putting the safety and security of our guests and our associates at the fore and making sure that we were doing everything we could to limit the spread of the disease.”
Habeeb, for his part, noted that the company has researched some independent companies that have emerged with cleanliness certifications of their own comparing it to LEED standards for sustainability.
“They come in and put a certification on your front door and allow you to advertise that you’re part of their group,” he said. While Habeeb acknowledged they were often costly solutions, he noted “it might be a wave of the future and our business if consumers start to trust these certifications.”
Olson noted that Crestline has researched some of these solutions as well, but ultimately believes it’s about the execution.
“You can have all of the programs and procedures out there that you want it comes down to how are those hotels executing on a daily basis. Are they instilling that confidence? I just tend to think that’s a bit more impactful than that sticker on the front door,” he said.
Meanwhile, soft brands continue to emerge as a popular solution for owners enabling them to keep properties independent but include a tag line and still be part of the brand system.
Habeeb is particularly bullish on soft brands.
“I think soft brands are explosive at the moment and they will be an explosive growth vehicle moving forward because they’re chasing the consumers wants and needs. For years, it was all about consistency, right? Now consumers are all about the experience and the soft brand is just a great opportunity to be able to tailor an experience to your location and create some great touch points that make you different and better than any other hotel in your marketplace and you still have that muscular brand behind you pushing consumers and guests through the reservation system,” he said.
Carey elaborated on the point.
“I think one of the mistakes the brand’s probably made and maybe we all made across the industry is a lot of times you didn’t know what city you were in because they all looked the same. They [brands] thought people all wanted consistency, but what they really I think wanted was consistency of cleanliness and service, not of the FF&E or the design package,” he said.
Carey went on to tout the soft brands as well. “I think soft brands are a great educational platform frankly for the brand companies to start understanding where they can really peel away from the deep brand standards and think about how they can open up opportunities across the brand families,” he said.
“There are still advantages to being completely independent and in certain instances there are advantages to being soft brands. Being able to tap into that reservation system and the marketing power of the brand is certainly number one. I think the conversations are fascinating as you get in and look at one and start having that discussion with an owner and which way you should go. There just isn’t a right or easy answer in most cases,” concluded Olson.