Photo: www.stayinacastle.com
It would be great to hear your opinions whether you agree or not as that is what this platform is about.
Over the last 6 years, in the UK the hotel landscape has become more “branded” whether it be a softer brand like Best Western or the more stringent brands under the Hilton or IHG families. The UK has been the opposite of the 70% branded-30% independent model of the US for years but there are predictions that we are heading to a more 50/50 split over the next decade or so. Why is this so?
First, during the recent financial crisis banks have been stung by hotels globally. Big brands give the banks reassurance that they’re a level of security in regards their investment and the same goes for other traditional investors. Secondly, some owners have felt that there is a safety net when you have a big brand behind you. This is all understandable but is this actually the best route? Looking at various reports it can be seen that the big brand portfolios have been left a bit behind with online disruption occuring both through the “traditional web” and more recently the “mobile web”. Who has taken over? Well the OTAs; technology-driven companies that provide amazing distribution and visibility for hotels no matter what brand, shape or size.
Over this period, I have heard loads of reports of how this portfolios loyalty scheme has grown by this or that percentage, but do these brands still “own” the customer. I am not sure they do. When a customer goes to a big OTA they get a choice of all brands (independent, big, small and even villas!). Consumers are able to find a place in almost any city or town in the world, and most of the time the OTA offers a far better booking experience than the (often clunky) brand core websites.
So going back my to original point, where does this leave the independent? I think all this brand confusion and noise provides an excellent opportunity for smart independent hoteliers. Being small means being nimble and quick to react. Being small allows for personality to be shown through all forms of marketing and service and I believe in a day and age where there is so much noise that this is very powerful.
If you look at the food retail sector in the UK, Tesco has been tearing up trees with their growth over the last decade, whether it was the superstores or the metros, it seemed as if there was a Tesco opening everyday wherever you looked. Butchers and fishmongers disappeared from the high street and very few food markets existed. However, take a closer look at the last two years, through a combination of the recession, lack of trust in the Tesco brand due to food scandals and some brand boredom, the high street has started getting its personality back. Local farmers markets, local produce, butchers, bakers and fishmongers re-opening and doing well. My thoughts are that this is what could happen with hotels over the next few years. When you go to a Tesco you have hundreds of choices (like an OTA) when sometimes all you want is a box of tomatoes. You don’t want to be forced to buy chewing gum at the counter or travel insurance before checkout. And like the growing popularity of Aldi stores, I believe that consumers will become attracted to more niche websites where they find what they actually want, with less choice, but more catered to their needs and desires. This is an experience that independents can provide, not only online but when a guest stays. This is achieved by making the experience so truly memorable that they will tell their friends (in person or through social) and also book direct the next time they visit without the need to enter the noisy world of the internet. Independents can offer a unique, personalised, memorable experience which is what the travel consumer craves, especially in the bland technology-driven world we now live in, where there is little to stimulate the senses.
I believe there is a bright future for the independents. Whether this happens or not is down to the independent hotel owner working really hard on their product, service and marketing, and taking the opportunity that OTAs provide them with in regards of visibility and distribution (30% or so of people looking at a hotel profile on an OTA will go to the hotel’s own website).
Let me know your thoughts, and I hope you enjoyed reading the above.
Written by our CO-Founder & CEO – @SteveLowy