Independent Hotels: Harnessing Soft Branding

3 min read

Soft Brands and Independent Hotels Starting to Make an Impact in the Hotel Industry

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 are they linked to 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.

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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.

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In the Hotel Industry, Brands Matter. Here’s Why!

3 min read

In the Hotel Industry, Brands Matter. Here’s Why!

Imagine the following scenario. You’ve been asked to travel out of town for a professional conference. The conference is being held in a convention center, and nearby there is a trio of nice, high-quality hotels—a Hyatt, a Marriott, and a Hilton. Your boss asks you which one you’d rather stay at; the choice, she says, is totally up to you.

If you’ve never traveled much before, you may express little preference. But assuming that you’re a seasoned vacationer, or that your work sends you to a lot of far-flung destinations, you probably know exactly which of these three hotels you want to be put up in. They may all be equal in their amenities, in their quality, even in their proximity to the convention center—but you have your brand, and you’re loyal to it.

Hotel Guests are Loyal to Their Brands

Such brand loyalty is by no means uncommon among tourists and travelers—the people who make up the hotel industry’s basic client base. Many regular travelers have brands that they stick to whenever they can, whether traveling within the country or even internationally. Hilton people tend to remain Hilton people; Hyatt people pick Hyatt hotels whenever they have a chance. And so on. In fact, many regular travelers would prove all too willing to drive an extra couple of miles to their convention center just to get the hotel of their choice.

A big part of this is consistency. People take comfort in knowing that all Hyatts are essentially the same, in much the same way that a Big Mac tastes the same at any McDonald’s in the country. Not only is there a basic level of quality that’s always going to be met, but you know whether or not there’s going to be free Wi-Fi; whether or not there will be a breakfast service; you even know what kinds of bedding to expect. For people who travel frequently, these little comforts are no small thing. They ensure an experience that is dependably posh and surprise-free.

Additionally, hotel owners actively foster this level of brand commitment. These days, most major hotel chains offer customer loyalty rewards, meaning discount points for those who consistently pick the same hotel brand. So not only do regular guests get a consistent and surprise-free experience, but the hotel chain actively makes it worth their while.

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Brands Matter for Investors, Too

All of this underscores an important point for the investor—that while no real estate investment can ever be fully guaranteed, a hotel that’s well-managed, situated in a vibrant market, and affixed to a recognizable brand certainly comes with some advantages and a greater chance of success.

Just take Marriott as an example: This is a company that has done so much to ensure a consistent guest experience and has built such an effective loyalty program, that investing in a new Marriott hotel is effectively investing in a business with a ready-made, built-in market.

All of this goes to show that, when considering a hotel investment, brand matters. And that’s one of the things that allows EquityRoots to stand out. We understand the role that brand plays in consumer behavior, and we can provide access to some of the best hotel brands in the world. This includes even the Big Three-Hilton, Marriot, and IHG—which are only attainable to the most seasoned and successful of hoteliers. (Even those with plenty of money and a few years of hotel experience are by no guaranteed a place at the Big Four table.)

Hotel guests don’t ignore brand affiliations—and hotel investors shouldn’t, either. Contact us today to learn more.

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