According to Butler and Braun (2014) unbranded hotels lose benefits of brand support systems (operating manuals, training, access to best practices, etc. Independent hotels are more agile and better prepared to adapt to the local market shifts ("Skift Report", 2018), and have the flexibility and opportunity to create unique experiences for the guests (Stone, 2018). All rights reserved. The staff is similar to those at boutique hotels. The insurance market is very unstable, Patel said. Are independent hotels capable of competing with chain hotels. And there is only so much you can do with a certain physical box until it becomes economically unfeasible, he said. We inspire our audience of meeting and event professionals to dream bigand create brilliant experiences that delight attendees, achieve desired results and elevate the impact of the meetings industry. Those flags are going to get me more revenue per room, he said. This leaves little room for creativity for each individual property. They have the ability to negotiate better room rates for employees who stay there a lot. 4 minute read, The Mews Blog>Pros and cons of independent hotels versus chains. That said, it depends because each hotel is different. In The Shifting Scene of Independent Hotels in America, a research report by STR, a systems and tech research company, various reasons were unveiled, such as independent hotels lack of funding in comparison to larger brands, such as Marriott and Hilton; the steady absorption of these independent hotels by larger brands; and smaller hotels difficulty in keeping up with the ceaselessly changing industry. This is particularly helpful when traveling with two or more people for an extended period of time. 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. On the flip side, they tend to be more expensive and elite. 10 Tips to Improve Your Housekeeping Operation, 22 Aug 2022 Because of the potential for a significant reduction in revenue during economic downturns, all of the experts LoopNet spoke with said it was critical that investors plan to fund a substantial portion of the purchase with cash. What are the disadvantages of chain hotels? Hoteliers on the "Pros and cons of independence" panel at this year's Hotel Data Conference in Nashville took a specific side and talked about why they liked their specific affiliation of choice,. Its great to be creative, but we like to make money, he said. Retrieved from https://gupea.ub.gu.se/handle/2077/53941/, Carvell, S. A., Canina, L., & Sturman, M. C. (2016). They like to see the corporate or franchise model in financing these deals.. What Are the Essential Requirements for Gastric Sleeve Surgery? Volume: hotel chains, due to their standard and extensive offer, benefit from economies of scale due to the expansion of their business and the reduction of costs for bulk purchases and management. Traditional Business, WebstaurantStore: Independent Ownership vs. Perhaps the single most unique (and commonplace) feature of hotels compared to other real estate assets is the presence of brands or flags, in industry parlance. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Bright Business Media LLC. You may also be able to start an independent restaurant with less cash than you would with a franchise. According to Holverson and Revaz ( 2006 2015 1997) identified the main disadvantages of SME (independent) hotels as insufficient management and marketing skills within the distribution channel. While all hotels focus on profitability, chains are more focused on getting the most revenue possible out of every hotel room. The authors concluded that the value that the brand brings is not static and varies over time. You are not the first one. Freitag described the relationship between these entities as a triangle between the owner, the management company and the brand. The cookies is used to store the user consent for the cookies in the category "Necessary". It may be because of the architecture of the place but also because of the services designed for a niche clientele: there is no comparison with a single offer, therefore there is less competition and an economy due to specialization (it reduces costs by not having an extensive offer that pleases everyone ). The good news is, if you can buy today, youre buying at the trough. There is no independence. Poor marketing communications Poor budget allocation Poorly managed advertising campaigns Poor product presentation These items are all part of the core hotel brand experience. Make your property remarkable with an ecosystem of hospitality solutions that maximize revenue and enhance the guest experience, The control centre for front office and back office staff with smart automation, A connected guest experience thats memorable as well as modern, Make every payment fast, secure and automatic, Tools for better understanding your business, Hospitalitys biggest marketplace of apps and integrations, The power to easily connect your tech to Mews, One size does not fit all. The hotel management agreements and franchise agreement handbook. Even multifamily properties, which have more frequent turnover than their commercial counterparts, typically offer one- to two-year leases. Eva has over a decade of international experience in marketing, communication, events and digital marketing. al. What is the difference between independent hotels and chain hotels? Competitive advantages of chain hotels | Download Table - ResearchGate That being said, chains tend to have a less personal touch, focusing on their brand standards rather than what each individual guest wants. Much of this growth is in midscale properties, which increased from 4,400 in 1990 to more than 16,000 in 2018, and upscale hotels, which grew from 2,500 properties in 1990 to 7,500 in 2018. Here you can manage your preferences regarding cookies: Essential cookies enable core functionalities of the website such as marking your data inputs, network management and accessibility. They have the ability to negotiate better room rates for employees who stay there a lot. Most days, you will spend your day walking, running errands for your business, and performing a multitude of tasks. Conclusion. We dont have to rely on (online travel agencies), opaque channels, other discount mechanisms as much as some of our independent and soft-branded hotels do And then when it comes to operations and development, theres a playbook, so we dont have to reinvent the wheel every single time.