Leveling the playing field for independent hotels

Independent hotels are clearly proving attractive to all types of modern-day guests, and not just younger travellers who crave more personalised experiences. According to Expedia Group data, there was a 20% year-on-year increase in demand for UK independent hotels in 2018. UK independent hotels contributed roughly half of the total hotel supply in 2017 and with gross bookings of the UK hotel industry predicted to rise to £54.3 billion in 2021, the independents are set for strong growth. This segment of the market continues to appeal through offering something authentic and local for guests. The days when guests simply saw a hotel room as somewhere to sleep for the night have long gone. The advent of the ‘boutique’ hotel has created a whole new concept by turning a guest’s stay into an experience. In London, we are seeing anything from Georgian-themed quirkiness at The Rookery in Clerkenwell to the funky, futuristic cool of Stylotel in Paddington. The individuality of these types of venues provides guests with a travel experience unlike any other. It helps enhance a guest’s stay, offering them a genuine feel for the city they are staying in. It helps make them memorable and encourages guests to become loyal customers. This ongoing success is evidenced by the data, with Expedia Group figures showing, for the second year in a row, unbranded properties with greater average daily rates (ADRs) and overall revenue growth than their branded hotel competitors. When comparing Q1 2018 to Q1 2017 Expedia Group data, independent popularity once again soared, with demand for these hotels continuing to grow twice as fast as chains, consistent across both domestic and international bookings. Technology has certainly played a major part in levelling the playing field for smaller, boutique hotels, by allowing them to punch above their weight. But often technology adoption in this segment of the market lags behind other parts, online marketing channels are still under-utilised, and direct distribution opportunities are still being missed. But that need not be the case - today’s owners and operators have access to more data and insights than ever before. Technology provides independents with the greatest opportunity to allow them to compete on the world stage, no matter size or budget. By leveraging the technological assets and scale of a global platform, independent hotels can now compete with their larger counterparts more effectively. The armoury of evolving insight, data and free operational tools, for example in revenue management, offer hoteliers, particularly independents who might lack the resources and budget to invest themselves, greater value than ever before. For example, a hotelier may learn that their competitors are getting huge demand from, say, Chinese or Far Eastern travellers which they aren’t seeing. These tech tools mean they can dive into their rates, and even specifically target these travellers to secure more valuable demand from the Far East. They can also learn how they sit versus branded properties in their market. There was higher growth from visitors from the UAE booking an independent hotel versus a branded hotel in 2018, for example, (160% vs 130% year-on-year growth), showing the growing appeal of boutique hotels to high-spending international travellers. We are seeing many examples of these types of venues really getting the most out of their data and becoming more sophisticated with revenue management strategies, allowing them to compete with big chains in a way they’ve never been able to before. One of our hotel partners, a 3-star venue in London’s Bayswater, has seen transformational business results following usage of Rev+, Expedia Group’s revenue management tool. Over a three-month period between August and October 2018, along with greater business efficiency, the hotel enjoyed double-digit ADR increases and room night growth of 30% year-on-year. With this level of support in the background, independents have the opportunity to genuinely distinguish their hospitality and property as unique. They can respond to guest needs quickly, delivering a personal experience which secures greater loyalty from their guests. In short, independents have greater flexibility and freedom to experiment and innovate. By letting the big global players invest billions in technology innovation it means that independent hoteliers, for whom technology might not be a core competency, don’t have to. But, of course, they can still benefit from the global reach and marketing that continually drive profitability. By leaving the likes of Expedia Group to develop the technology that meets rapidly evolving consumer expectations, independent hoteliers can concentrate on what they do best: providing travellers with an exceptional hospitality experience. Krishan Kadodwala, director of market management, UK and Ireland, Expedia Group