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Independent Hotels Are Booming.
By Madigan Pratt
Friday, 1st September 2017

If you follow hotel performance data then you know they are experiencing what can best be described as boom times and what’s most interesting is that independents are significantly outpacing their branded brethren.

And in case you haven’t seen the data, here are a few highlights from a recent Lodging Magazine article.

Independent hotel ADR growth is running at twice the rate of ADR growth as branded hotels
Large markets with significant international travelers (like Las Vegas, Manhattan, Los Angeles) are helping to drive this trend

However some of the biggest increases are being seen in smaller markets like Rochester, MN (+80%) and Prescott, AZ (+75%)

Interestingly enough, the data source for these insights comes from Expedia and only cover US markets, but the same underlying fundamentals most likely apply to hotels in international destinations as well.

Not surprisingly Expedia wants you to believe it is the expanded access to global audiences through online (i.e. Expedia type) market places that is contributing to this growth. But is there a cause and effect relationship between their reach and independent ADR performance? Probably not when you consider most independent hotels have been on Expedia for more than a decade.

So what is making independent hotels so hot? If Expedia isn’t the driving force behind this explosion in independent hotel ADR, what is?

  • Traveler’s Desire for Authenticity – Authenticity seems to be the trending word in travel today. Research studies abound including ones from Virtuoso to Expedia showing travelers from millennials to the affluent are looking for authenticity in the hotels and destinations they visit. And who other than independent hotels can provide the most authentic experiences?
  • Share-Worthy Experience – Like authenticity, young and affluent travelers have demonstrated their desire for experiences that have a unique vibe, one they can share on Instagram and other social media. Here too independent hotels that listen to their customers are better positioned to capture the local vibe than big box hotels.
  • Speed to Market – Independent hotels that operate within an entrepreneurial environment have it all over big box hotels when it comes to making fast decisions and instantly reacting to guest requests and opportunities in a market.
  • Marketing – Independent hotels are getting smarter and using more sophisticated marketing techniques including CRM software once only affordable by chain hotels to drive higher revenue and a bigger share of direct bookings.

So how do owners and managers of independent properties keep this positive trend going in light of continued intense competition in the hospitality industry?

For information and two case studies on how two small luxury hotels are using CRM to drive significantly more revenue and direct bookings, watch this video: 469 Seconds that Will Change Your Hotel’s Marketing Strategy.

Madigan Pratt is President of MP&A Digital & Advertising, an award-winning agency helping luxury hotels attract and retain profitable customers. Principals with over 60 years of collective experience at some of the world's largest advertising and direct marketing companies lead the agency's team of marketing, creative, public relations, Internet and social media professionals.

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