Are big brand hotels a thing of the past?
Op-Ed: Big brand, independent or somewhere in between? Chris de Closey explores which model delivers the best result for accommodation operators
Way back when, before the days of the internet and online travel agencies, customers found hotels through travel agencies, corporate booking centres and a number of different sources.
The big brand hotels always gave a sense of familiarity in offering and in safety of knowing that a certain standard will be upheld. In the past, these standards meant that regardless of what you knew of a region, the big brands meant that you had some understanding of exactly what you were going to get.
But is that a thing of the past now in the modern age we live in?
I’ve seen a trend in recent months where operators of branded properties have reached out, wanting to separate themselves from big brands and go independent. Their reasons vary, but ultimately it boils down to two different factors. Flexibility and profitability.
Often, but not always, big brands have restrictions on what you can and cannot do with the distribution, pricing and marketing of your own product. These restrictions often mean that you can’t do everything you’d like to do, you may be limited in how you position your property and you are required to operate within the brand guidelines given to you.
This article was first published in the April edition of Resort News. OUT NOW. Read it HERE
Is independent best?
Independent properties often give you the flexibility needed to be as creative as possible for your business. You have the freedom to choose your distribution channels, you can enter into unique agreements with suppliers, greater control over your promotions and deals with wholesalers and online agents and ultimately you get the final say on exactly what you want to do with your product. You live and die by your own sword.
However, sometimes the guidelines help protect your revenue and results (not always), in many cases, big brands can provide more consistent demand and structured support, ensuring you stay with a safe option.
Is it best for profitability to pay (sometimes) exorbitant fees for the support, visibility and distribution that these brands provide?
When does independent not make sense and where do big brands matter?
Picture this, your property is one of many inside your market. It’s crowded, your competitors produce similar reviews, a similar price point to yours. What makes you stand out against these properties and why would guests choose to book you?
If you and your competitors are similar in all the factors guests want (such as location, offering, price point, reviews) what is making you more attractive than them?
This is where branded properties make sense. You can achieve an edge over these competitors with the big brands behind you. In crowded markets, big brands offer a differentiation and help you stand out in the sea of accommodation providers.
Big brands also help with your distribution, the buying power of these brands sometimes means that their scale can improve visibility and access to online agents, get preferred inventory allocation with wholesalers and corporate bookers, helping to drive occupancy.
Read more from Chris de Closey HERE
The happy medium?
So, you want the support of a big brand but the freedom and flexibility of an independent property? The growth of white labelling accommodation is on the rise, with some amazing, established operators in the space who are delivering strong outcomes for owners and investors alike.
White label hotel management is a third-party operating model where an external company manages day-to-day operations, marketing, and revenue strategy, but allowing the owner of the property to develop or maintain their own brand. Often, using a white label solution gives you the backing of a big support network, without having to give up your own aspirations for the long term goals of the property.
In all, big brands aren’t going anywhere, as much as we have conversations with clients about going independent, there will always be more conversations of new properties joining their ranks. They will continue to grow their ranks, as many customers value the consistency and reassurance they provide.
Customers who are confident to run their own businesses (and do it well of course!) will always maximise their profitability. Those who are needing that extra support always have a white label option, it’s just about picking the best solution for each individual business.
Read the latest edition of AccomNews HERE
Identity is key to independence, owning the character as much as management style and service offering. Great article!!