Why Big Brand Hotels Need To Act Like Independents
Contrary to popular belief, independent hotels tend to outperform big brands during times of crisis, and this sentiment spills over into peacetime too. Here is an excellent resource for some figures on this - https://preferrednet.net/media/1296303/independent-vs-brand-hotel-performance-whitepaper.pdf
IHG CEO Keith Barr said this when asked about post-Covid travel:
Customers are going to want to stay in the biggest branded hotels—this will put headwinds on home-sharing. We will also see weaker brands and independent hotels convert over to the big brands.
It’s easy to see how Keith arrived at that assertion, but it’s not so simple to understand why he was wrong.
At Klinical, we work closely with hospitality brands all over the world from luxury resorts in Ghana to 5-star heritage hotels in London. As we consult, strategise, create and develop, we pick up various insights that help us to stay on the crest of hospitality’s next wave.
Here are just a few things I’ve noticed:
Agility
Big brand hotels like JW Marriott tend to have strict regulations over what their properties can and can’t do from a branding and marketing perspective. This may provide some upside via consistency and simplicity but our experience in the field and the latest data demonstrate that travelers are increasingly looking for interesting stays with points of difference. It’s extremely difficult for properties to cater to this change if all of the decision-making power is housed at HQ.
As well as not adapting to changing demands, the creative assets and marketing materials of big brand hotels can quickly fall way behind their boutique and independent rivals. Again, this is because the chain of command to make changes stretches long and high up to HQ. This creative stagnation shows itself best (or worst) in things like wedding brochures and sales presentations which nobody at the property has been able to update or tweak for fear of contravening the corporate guidelines.
Indie hotels, on the other hand, can keep a close eye and a poised hand on their brochures, presentations, social media templates, and more. This provides them with a significant competitive advantage.
Authenticity
Often, big brands have a single, universal website for all their hotels, and the individual properties are unable to have their own tailored online presence. Staying at the Marriott in Goa, India is obviously going to be different from staying at the Marriott in Grosvenor Square, London yet they occupy the same website with the same UX, the same tone, the same styling, and more. The varying characteristics and personalities of these locations are stifled, and their stories are left untold.
A counter-argument may be that uniformity provides a customer who knows what he or she wants with the confidence to make a swift booking decision wherever they’re traveling to. It’s like being in a strange country and suddenly seeing the McDonald’s golden arches in the distance - you know you can trust that location to provide sanctity, familiarity, and an antidote to anxiety.
Is that really what people want from their travel experience? A safe bet? The data suggests that people are more experimental than ever, and the desire for difference increases by generation.
This Forbes article about Deflagging is a great read: https://www.forbes.com/sites/forbesbusinesscouncil/2021/06/07/what-does-the-increase-in-hotel-deflagging-mean-for-the-hospitality-industry/
My view is that the phrase ‘A Stay With a Story’ will come to characterise the next decade of successful hotel stewardship. The Story in this sense refers to the character and personality of the brand but also the idea that guests will leave with an interesting story to share with their friends and family. Independent hotels are better positioned to accomplish this because of their dexterity, and big brand hotels will need to flatten their structure in order to compete in the same way.