The remaining insurance companies are using the situation to their advantage and raising premiums. According to the STR report, from 2003 to 2007which saw more than three dozen hurricanes, in places such as the Gulf and Atlantic coastal regions of the United States1,000 independent hotel properties faced a permanent closure. NASHVILLE, TennesseeSome hoteliers prefer absolute creative freedom, others want some wiggle room in terms of creativity and others want guidelines completely laid out for them from a brand. Hoteliers on the Pros and cons of independence panel at this years Hotel Data Conference in Nashville took a specific side and talked about why they liked their specific affiliation of choice, whether it be independent, branded or soft branded. Consider both the advantages and disadvantages of hotel ownership as a franchisee to decide if it's right for you. Hotels are designed to give you a comfortable and luxurious experience. A deep dive into operating and branding strategies for hotel owners. At the same time, though, you'll need to be patient, know where to find help and be able to handle the challenges of having full responsibility of your restaurant. 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. Its great to be creative, but we like to make money, he said. The greatest advantage to me is the ability to be creative, he said. Furthermore, by creating a targeted, highly-segmented offer for a niche audience, it will be easier to capture clients that are not so price sensitive, but instead are looking for that one-of-a-kind experience. Choose a solution to find out more, Hospitality events, insights and inspiration, Everything from industry trends and hotelier interviews to product releases and events. Good boutique hotels also know how to take advantage of the surrounding area. The quality of the guest experience can be controlled by brands. 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. While consumers may still appreciate the presumed quality and service assurances that accompany a brand, they tend to be less brand specific, Barton said. 4 minute read, The Mews Blog>Pros and cons of independent hotels versus chains. Owners can change interiors or upgrade amenities when they see fit. The hotels that arent related to a hotel chain are considered independent. Registered in England & Wales No. When you run a franchise, the franchisor is the one who tells you what food you can serve, what your location must look like and what procedures you must follow in your daily operations. The brand would place their flag on the property, subject to many, many requirements on the owner in terms of the design, the quality and the level of service they provide., Lest you think that the brand is doing the majority of the work for you, its important to understand that hotel brands typically do not manage the properties under their umbrella either. Recommended articles lists articles that we recommend and is powered by our AI driven recommendation engine. There are more constituents in a hotel investment than there might be in many others, and there is no durable revenue stream, as we learned to our chagrin again in 2020. While you can sell an independent restaurant, you'll need to have put in the effort to make a reputation for yourself and show potential buyers that the purchase would be profitable for them. A comparison of branded and independent hotels performance during a full economic cycle, International hotel development: A study of potential franchisees in China, Strategic hotel development and positioning: The effect of revenue drivers on profitability, The role of brand affiliation in hotel market value, The relationship of sales and marketing expenses to hotel performance in the United States, Tourism in protected areas and the impact of servicescape on tourist satisfaction, key in sustainability, Cash regimes and the franchise system: An extension of the marginal value of cash, The internationalisation of the European hotel industry in the light of competition theories, Performance comparisons of hotels in China, Foreign market entry mode in the hotel industry: The impact of country-and firm-specific factors, The penetration of international hotel chains in Italy: Evidences from an updated census, Hotel chains: survival strategies for a dynamic future, The future of hotel chains: Branded marketplaces driven by the sharing economy, An extended COPRAS model for multi-criteria decision-making problems and its application in web-based hotel evaluation and selection, Network advantages effect on exit performance: examining venture capitals inter-organizational networks. However, that increased revenue comes with a cost. Please check back in a few minutes. A hotel franchise is referred to as a referral hotel chain. Their ability to offer experiences different than the larger, branded hotels appealed to the younger generation, anxious to have one-of-a-kind experiences. Whereas chains are built with the idea of having a standard offer, including standardized design and quality standards no matter where a guest stays in the world, independent hotels pride themselves on their uniqueness. Business travelers can take advantage of the chain hotel. Thats what I see.. Pros and cons of the independent hotel - the popping post There are several actions that could trigger this block including submitting a certain word or phrase, a SQL command or malformed data. By clicking "Log In," I agree to LoopNet's. What are the disadvantages of chain hotels? Agreements : a large booking platform accompanied by agreements with agencies, tour operators and OTAs, constitutes an impressive commercial force. Analytical cookies help us improve our website by collecting and reporting information on how you use it. Permission is granted subject to the terms of the License under which the work was published. Franchise Direct: How Much Does It Cost to Open a Fast Food Franchise in the United States. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. typically do not own the hotels that bear their names. Independents vs. chains - advantages and competitivness - Amenitiz This means they may fall short in some aspects of the guest experience. Advertising cookies for delivering tailored and customized advertising. Comparing The Benefits of Boutique vs. Chain Hotels - Social Tables 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. Kelso neatly summed up the investment profile of hotels in a single sentence: Its a high-risk, high-reward asset class.. ONeill, J. W., & Carlbck, M. (2011). Independent hotels are different from chains in that they are not built with the idea of having a standard offer, but with the idea that they are unique. There is a significant difference in the overall experience both kinds of hotels offer. Independent hotels are hotels that are owned and run by themselves. How am I doing compared to the competition? You know, he said. 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. Chain-Hotel Definition / Meaning - Xotels The key to getting a competitive advantage is providing a unique experience that cannot be replicated in any other structure. Some sources also speculated that the loyalty programs, which have long been one of the primary benefits offered by the brand franchise model, are less relevant in an era where OTAs dominate. Example: an employee for 50 reservations instead of 10 is more profitable. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. BTR Shines Even as CRE Sales Plummet: Heres What to Focus on Next, What Self-Starters Should Know About Self-Storage Investment, CRE Sales Plummet in Q1 as Expected; Heres What to Focus on Next, 5 NNN Retail Properties Available For Under $4 Million, How Rising Interest Rates Are Impacting NNN Retail Properties. There is no independence. Such challenges notwithstanding, all of the experts LoopNet spoke with believe this is a particularly compelling moment for investors to consider hotel assets. You are not the first one. Generally, the independent hotel is managed as if it were a family business, with a limited and versatile team in its activities.