And as large companies continue to grasp more control of the hospitality industry, smaller, independent hotels are suffering. The benefits of running a small hotel business Cornell Hospitality Report, 11(21), 6-13. That is to say, they strive to offer a unique and authentic experience at every hotel. But today, independent hotels account for less than 30 percent of hospitality venues. O'Neill and Carlbck (2011) and Carvell, et. Holverson and Revaz ( 2 for their tourism growth. So when it comes to staffing models, when it comes to building new assets, architectural plans, you name it, there is a step-by-step playbook to follow, and we see our profitability is substantially higher at branded hotels than they are in the independent and soft-branded hotels.. What is the difference between independent hotels and chain hotels? Weve looked at the differences between these two structure types, but you may still be wondering if there is any way for them both to compete. For more information please visit our Permissions help page. Please try another or click, By clicking the button, you agree to LoopNet's, An Overview of This High-Risk, High-Reward Asset Class, Passwords is too common or does not have at least 8 characters. 2. Patel said that, if everything goes according to plan, investors can expect annual returns approaching 20%, which is certainly impressive when considered in comparison to other real estate assets. Click here. Accordingly, an independent hotel that takes the money that it would have put into a brand and reallocates it toward search engine optimization (SEO) or other digital marketing efforts to attract online interest may be well-positioned in the 2021 hotel landscape. Good boutique hotels also know how to take advantage of the surrounding area. As Freitag noted, Theyve been there and done that, right? There is no independence. If the hotel is profitable, and growth is not part of the strategy, the hotel can afford to stay unbranded. Cornell Hospitality Report, 15(21), 3-11. This cookie is set by GDPR Cookie Consent plugin. They focus on quantity to achieve this goal and for this reason can often be more competitive in terms of pricing. Analytical cookies are used to understand how visitors interact with the website. One of the ways different hotels can be sure that they are offering a one-of-a-kind service is by carrying out a competitive analysis. Chains, on the other hand, can be more competitive on pricing, and can provide a sense of reliability that will appeal to a wider target audience. The aforementioned brand impact isnt the only area where hotel financing differs from other CRE asset types. A hotel franchise is referred to as a referral hotel chain. Retrieved from http://ejtr.vumk.eu/index.php/forthcoming-articles/654- v2310/, Carlbck, M. (2017). Perceptions of European independent hoteliers: Hard and soft branding choices. These cookies allow a website to remember choices you have made in the past, like what language and currency you prefer, remember your name and email and automatically fill forms. Does paying higher franchise fees command higher RevPAR?. With an independent restaurant, you don't have to worry about coming up with a large franchise fee or prove a large net worth like many chain restaurants require for franchisees. Because many of the elements that make hotels a sometimes challenging real estate asset are the same features that make them a compelling opportunity. You dont have to sort of wonder, How is the competition doing? 4 minute read, The Mews Blog>Pros and cons of independent hotels versus chains. You also have the option to opt-out of these cookies. Mews has a comprehensive platform designed for your specific business needs.
