Industry Update
Opinion Article11 January 2016

The rise of independent hotels

By Mendes Cavin, Founder & Managing Partner, Miners Hospitality

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Traveling has always been something exciting, whether to seek new adventures or experiences. With the growth of the world's population and an increase in global wealth 1 the hotel industry thrived with a stunning growth rate of 23% from 2008 until 2016 2 and large global hotel chains developed hotels like there was no tomorrow. As of January 2015 the top 10 largest hotel chains managed a cumulated total of 38'425 hotels with a combined 4'808'079 rooms 3.

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Interestingly however, over the last decade traveler perception changed quite a bit. Travelers don't necessarily want that golden bathtub anymore but would rather pay more for an unforgettable experience. Luxury is now shifting from 'having' to 'being' with consumers moving from owning a luxury product to experiencing luxury 4. With this shift in consumer perception large hotel chains struggle to keep up with the demand and their global scale doesn't allow for quick changes within the group.

This provides a huge advantage to individual hotels and smaller hotel chains since it takes longer for global chains to establish new brands tapping into the fast changing market. Individual hotels and small hotel chains now for the first time, have a strong advantage and are able to leverage on the swift changes in the industry. Important for smaller hotels or brands is to accept and adapt to these changes and to immediately start developing products and services targeted to consumer demands.

Here are six 'whirlwind' ways to adapt and lead the category that you, as the hotel owner, desire.

  1. Reduce the paperwork clutter and refocus on delivering service rather than recording it. Many times, with a large hotel chains, a systematic reporting methodology is in place. For me, the report and record play second fiddle to the actual execution of the hospitality or delivering luxury. Capitalize on apps and e-based tools to do the back-end records and focus the energy of your team (notably the front-end) to spend more time going the extra mile.
  2. Create a name that jingles and a marketing plan to goes with it. As like all corporations including large hotels, brand matters. And the brand story is resonated through all your touch-points (from booking engine to the front desk, your website to your concierge). A critical step for a new hotel owner is to have all these in place, and audited from the get-go. A well executed brand goes a long way.
  3. Reduce reporting layers and create a mean and lean team. For us, with one of our hotels, we saw no need to have a director of food & beverage. We rather combine the role and we made our head chef the CheF&B – he or she leads the kitchen, and the service execution. The new name also created attention too.
  4. Create experiences: This is a pivotal step and is part of your hotel branding. It is not a gimmick, but a sincere approach is executing something differently. Why reduce the spa experience to just the four walls of the spa - redefine pampering by bringing a selection of soaps to your guests. Right into their rooms. Do the unexpected and a new experience in luxury is crafted.
  5. Keep it exciting. The world is in constant change and so should you. Once your hotel is a success and you have achieved the reputation and financial returns you aimed for, don't just stop and lean back. This is probably the cause for most hotel failures over time. Guests want to see, feel, taste something new all the time or else it gets boring. As a hotelier you will have to keep re-inventing yourself to stay ahead of your competition.
  6. And most importantly to me and my company is to give back. When you have gained great financial success with your hotel business it is crucial to do something for people and planet. Give something back. It doesn't matter what. Important is that you do. Even though being a 'green' hotel is rarely ever the only reason why guests choose a hotel, respond positively to it.

Being able to adapt to the quickly changing customer demands has become the biggest advantage of individual hotels and small hotel chains. If accepted and adapted to it, these hotels will start seeing a shift of travelers moving from large brands to their unique type of hotels.

Mendes Cavin

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