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How Independent Hotels Can Beat the Big Chains

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As any independent hotelier knows, navigating the hospitality industry is tough.

When most discuss the travel industry, they talk about how it’s dominated by a few large players in both the accommodation and distribution verticals. But boutique hotels have been able to level the playing field in the past few years due to traveler trends and technological advances.

When independent hoteliers play to their strengths, they’re able to navigate around some of their unique circumstances. Here we’ll discuss how independent hoteliers are winning in 2017 even against some of the largest travel brands in the world.

1. Passion for travel

Hoteliers around the world all have the same thing in common: they’re obsessed with travel, meeting new people, and experiencing new cultures. And unsurprisingly, this has a huge impact on how they run their business.

For most independent hoteliers I’ve talked to, they love running their properties because of the people. Often, an independent hotel can provide a different type of experience than a big, branded hotel. Of course a branded hotel is best at providing a consistent experience whether you’re in Kansas or France, but an independent hotel can provide a one-of-a-kind experience that’s more personal.

2. Changing traveler trends

Traveler trends are changing and people are experiencing places in new ways. Airbnb and the rise of the sharing economy have played a large part in the evolution of travel. While some analysts will say that Airbnb isn’t impacting traditional accommodations, they’ve made an obvious impact on the larger brands’ future plans.

Leigh Gallagher perfectly explains in just one minute how Airbnb has a complex relationship with the hotel industry, as both seem to be prospering at the moment.

Large brands like Marriott and Hilton are creating new brands that cater to Millennial traveler trends, co-sharing spaces, and alternative accommodations. Accor hotels launched Jo&Joe based on the experience you’d find at a hostel, reports Skift. While traditional brands may not have felt the impacts of alternative accommodations yet, they’re preparing for changes in the market.

These trends are largely a positive change for independent hoteliers because consumers are broadening their travel searches.

With more brands, distribution channels, and availability, people are making decisions based on a whole array of factors other than brands. With more noise, the once-deafening messages of big brands have been toned down while others have been amplified. Hoteliers who play to these hotel industry trends will end up winning as long as they remain consistent.

Steve Lowy, of the British Educational Travel Association, accurately described what’s going on in the market right now: “I think all this brand confusion and noise provides an excellent opportunity for smart independent hoteliers. Being small means being nimble and quick to react.”

Being independent means no corporate overhead or long processes to get new strategies approved. If independents can recognize changes in the market and react swiftly, they’ll beat the big brands to the punch.

3. The right software

Technology has made a major impact in how independent hoteliers run their businesses. In the past, hotel software cost an obscene amount of money, automatically pricing themselves out of independents’ budgets. But now, with the rise of software as a service (SaaS), hoteliers can access software with no installation costs, annual costs, or expensive contracts.

This technology is one of the main reasons independents are able to navigate competitive markets. They now have access to the same tools and have the ability to market to new guests.

From property management systems to channel managers, there are a few products that have become essential to hoteliers everywhere.

Property management systems

An automated property management system is essential to independent properties no matter their size or type. A good property management system will help you automate your workday and spend less time on admin tasks. Here are some of the most important things to look for:

Automation: By default, a property management system should automate the task of accepting and keeping track of reservations, rate plans, reporting, among other things. An alarming number of properties still use spreadsheets or pen and paper to manage their properties and it puts them at risk for over bookings and missed revenue opportunities.

Real Time Dashboard: A property’s dashboard allows property owners and employees to get a quick overview of what’s going on at the property. Incoming reservations, outgoing, daily bookings, and other important information should be accessible with the click of a button.

Drag and Drop Calendar: Managing reservations can feel like a complicated game of Tetris. With a drag and drag calendar, hoteliers can quickly identify opportunities to maximize reservations. Often there is hidden availability that is much harder to identify in an Excel spreadsheet or on a piece of paper.

Reports: Large hotel brands pay a lot of attention to their data. Every property management system should have the ability to create reports on financials like distribution channel production reports, RevPAR, ADR, etc.

There are also a handful of reports a property should run every night like: Room and Tax, Shift Audit, Departures, Arrivals, Housekeeping, and Continuous, to name a few.

Booking engine

Proprietary booking engines allow independent properties to provide a seamless booking process to the guests. Before, independent properties had to resort to email submission forms to request bookings. But now, hoteliers can eliminate the back and forth emails and instead automatically confirm reservations and payments in one step.

Consumers are now accustomed to ordering and booking online, so their tolerance for less than flawless booking processes could cause them to abandon your website.

Direct bookings have obvious benefits, including zero commissions and higher margins. A property is able to offer their guests more value through direct bookings because they’re not paying 15-30% commission rates to an OTA.

Channel manager

Massive distribution used to be reserved for properties who had access to powerful, expensive software. Today, channel managers are relatively inexpensive and allow independent hotels to join the largest online distribution channels and niche marketplaces.

With a channel manager, it’s easier than ever to test new markets and extend a property’s reach. Big brands win because they’re able to be wherever a guest is looking to purchase. Not every channel is a perfect fit, but the option to choose new channels is powerful.

The future is bright for independent hotels

It is true that the hospitality industry is dominated by a handful of players who seemingly control the market. However, independent hotels are in a unique position to break through the noise and take advantage of current travel trends. Technology has changed so rapidly over the past decade that every day the gap between the big and little players shrinks. Hoteliers who use their available tools to their advantage will win.

Looking for Hospitality Property Management software? Check out Capterra's list of the best Hospitality Property Management software solutions.

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About the Author

Alex Gaggioli

Alex Gaggioli works as a Marketing Coordinator at Cloudbeds in San Diego, California. He is a social media addict with a passion for content, travel, and technology.

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