Independent hotels are not a new trend in today’s hospitality world. This concept has actually been around for some time now. These are hotels that neither belong to a hotel chain nor feed from any central reservation system. Over the years, independent hotels have been trying to scratch the surface in terms of obtaining a piece of the action. In other words, it has been a tough road for them to acquire some market occupancy shares in the lodging industry when they have to compete against the likes of the already established hotel chains such as IHG, Marriot International, Hilton, and Hyatt.
Part of the issue for independent hotels is that they don’t have enough resources—meaning that they don’t have the necessary distribution channels and marketing support like a hotel chain would have. In addition, these hotels are already at a disadvantage because of the lack of a loyal customer base. For example, there is no frequent guest program which offers rewards. As a result, independent hotels have to resort to a terminology called “soft branding” to target and develop a loyal customer base.
What is Soft Branding?
According to Cindy Schoenauer, a senior consultant of PKF Consulting, Inc., soft branding is an opportunity for independent hotels to keep their reputation as an independent boutique hotel while benefiting from a global reservation system with a proven track record for sales and marketing efforts. Here, independent hotels are gaining tremendous momentum in the area of distribution through universal distribution systems and through internet coverage. They are also teaming up with major hotel chains to have access to their customer base in exchange for a franchise fee. By capitalizing on soft brands, independent hotels are making an impact in major markets and in special resort locations.
Furthermore, while using the resources of branded hotels and taking advantage of third-party distribution systems to target prospective guests, independent hotels still manage to be different and retain their individual identities. Here, independent hotels take into consideration what their customers prefer and what they are fond of when using a particular product or service.
Ideally, hoteliers want to create independent hotels that will connect them to a specific niche within the consumer base in the hotel lodging industry. They hope to attract consumers who express an interest in hotels that can identify with their own lifestyle or personality. There’s no doubt about it, independent hotels and boutique products have taken a new approach in catering to a niche market like Millennials, and have proven to become profitable in doing so – but the overwhelming majority of new development is still led by the select-service products catered towards a corporate traveler offered by chains such as IHG, Marriott, and Hilton.