As revenue growth for the independent hotel segment continues to outpace branded properties, many independents are turning to personalization of the guest experience as a key strategy for sustained success.
In 2018, independent properties had greater average daily rates (ADRs) and overall revenue growth than branded hotels, according to Expedia Group data.
That marked the second year in a row that Expedia research showed ADRs for independents outpacing those of branded hotels, with revenues for unbranded properties continuing to grow twice as fast as chains across both domestic and international bookings.
Independent hotels are increasingly considering ways to personalize both the online and offline experience for their guests to keep the growth momentum going.
Key areas of focus include fostering partnerships with local businesses to offer guests experiences outside the hotel, and using technology tools to personalize and streamline online shopping and booking on the hotel’s website.
Personalizing through partnership
Jacki Brown, Product Marketing Manager for Amadeus, says cultivating local business partnerships are a great opportunity for independent hotels to personalize the travel experience for their guests—and also set themselves apart from the competition.
“We are seeing a lot more expectation by travelers and groups that a hotel will help them with experiences outside their stay,” Brown says.
Consumers expect personalization within the e-commerce experience, and if you don’t have personalization features emerging in your e-commerce experience within the next two years, that experience will start to feel outdated.
Lauren Rothrock - TravelClick
“Part of it is driven by the traveler, but we are also seeing more of this happening because partnerships are a great way for an independent hotel to enhance and differentiate their service.”
Most guests want hotels to give them recommendations for local experiences and activities, with food-focused experiences topping the list.
“There is so much opportunity here for independents to book local activities, transportation and reservations at partner restaurants,” Brown says.
It’s a win-win situation, she adds, because sending business to partners “means they will refer business back to the hotel.”
The unique characteristics and varied locations of independent hotels make them particularly well-suited to establishing partnership relationships.
“There are so many different types of independents—large and small, urban, suburban and rural—and they are located all over the world,” Brown says. “There are significant differences, and local partnerships can really enhance the service each of these properties provide to their guests.”
Independent hotel groups jump on the personalization bandwagon
Independent hotel groups are developing guest profiles and recognition programs to personalize guest experiences as they focus on building their group’s brand, cultivating guest loyalty, and cross-selling their properties, according to Lauren Rothrock, vice president of reservations solutions and guest management solutions at TravelClick, an Amadeus Company.
“Independent hotel groups want to make sure that if a guest has stayed at one of their properties before and they then stay at another property in the group, that second property knows as much as possible about the guest from their first stay,” Rothrock says.
“They want to empower properties in the group to recognize the guest and personalize the guest experience using data from a past stay or stays.”
To that end, she adds, many independent hotel groups are now developing guest profiles, “so they have a plethora of information to use to personalize each guest’s second or third trip to make them happier and happier with their experience so they come back again and again.”
Supporting the needs of independent properties
With the recent acquisition of TravelClick, Amadeus is focused more than ever on helping Independents succeed in a competitive market.
Traveler profiles are fast becoming essential for independents because a majority of consumers want more personalized interactions with travel brands—and they are much more likely to do business with those brands that recognize them and offer them recommendations tailored to their specific needs and preferences.
According to research in The New Travel Experience, a study of U.S. and U.K. consumers by Accenture Interactive, 67% of respondents said they want brands to use previous travel information to help them make better travel decisions, and 75% said they are more likely to buy from brands if they are recognized, remembered, and receive relevant recommendations based on their purchase history.
Recognition programs that reward frequent guests are another dimension of personalization, and many independent hotel groups have introduced some variation of these programs or have them under development, according to Rothrock.
These are not necessarily the points-based programs offered by major brands but more frequently feature discounts, room upgrades, or free breakfasts for repeat guests, “some gift or delight to thank them for their loyalty and keep them coming back,” she says.
Personalizing the online experience for guests
In the digital space, many independent hotels are prioritizing the personalization of their brand.com websites so guests stay on the site and convert on the hotel’s direct booking engine.
“That’s a top goal for hotels we speak to in the independent hotel space,” Rothrock says.
Some big hotel brands have already used guest data to personalize the experience on their websites and booking engines, and OTAs are jumping on the trend.
Aggregating guest data is key to personalizing the online experience, and Rothrock notes that many independent properties are looking for ways to do that on a smaller scale than branded hotels and OTAs. The reasons to do so are compelling.
“Consumers expect personalization within the e-commerce experience, and if you don’t have personalization features emerging in your e-commerce experience within the next two years, that experience will start to feel outdated,” she says.
“The consumer will get there and expect some sort of log in experience, some sort of promotion that’s tailored to them, and if you don’t have it you will risk losing a booking and potentially losing that customer.”
She adds, “That’s not true right now, but a couple of years down the line personalization will be the norm in e-commerce, so much so that without it your e-commerce experience will feel clunky and behind the times.”
Tapping technology to enable personalization
According to Anna Ransom, segment marketing manager for Amadeus, independent hotels now have access to a variety of technology tools and customer-relationship management (CRM) software solutions that can enable them to personalize the guest experience on their brand.com website and booking engine.
“There are so many technology tools available to aggregate data about your guests so you can understand who they are, what their expectations are, and how to deliver on those expectations, and then run analytics against that data to be sure you are delivering the experience that really works for them,” Ranson says.
“It doesn’t take an extreme level of sophistication to gain insights on guests if you can put some automation behind it and action accordingly.”
At the end of the day, personalization is king. Guests are seeking out hotels that deliver personalized and memorable experiences, from shopping to booking to execution.
Anna Ransom - Amadeus
While meeting consumer expectations for online and offline personalization is a challenge for many independent hotels, it is also an opportunity that independents cannot afford to miss.
“Buyer behavior has changed over time,” Ransom says. “Technology has changed how customers want to do business with independent hotels, and the demographics of their guests are continually changing, which means their expectations are changing as well.
"The independent hotel market has to adapt to those changes and address those needs.”
Implementing effective technology tools and partnerships are critical to adapting to those changes and addressing guest needs and expectations, she says, adding that, “At the end of the day, personalization is king.”
“Guests are seeking out hotels that deliver personalized and memorable experiences, from shopping to booking to execution,” Ransom says.
“Independent hotels have the unique opportunity to take that to the next level, particularly when they empower their teams with the automation they need to deliver on their brand promise and increase engagement with their guests.”
About the author...
Diane Merlino is a freelance journalist and travel industry analyst.