As competition among hotels remains heated due to new construction and market saturation, independent hotels continue to thrive and outpace chain hotels.
This is taking place in both growth and their average daily rate (ADR).
For the second year in a row, Expedia Group data shows unbranded properties had greater average daily rates (ADRs) and overall revenue growth than their branded hotel brethren.
Comparing Q1 2018 to Q1 2017 Expedia Group data, independent popularity once again soared, with independents continuing to grow twice as fast as chains, consistent across both domestic and international bookings.
We found that when it comes to Expedia Group VIP Access hotels, consisting of 3,500-plus hand-picked hotels, the independent ADR advantage is even stronger.
For 5-star hotels, VIP properties on average command a nearly 60% higher ADR than non-VIP 5-star hotels, and at the 3-star level there is a greater than 10% ADR advantage – giving them even more of an ADR lead over chains.
Chains used to have a distinct ADR advantage, especially internationally, due to their scale and marketing prowess.
But technology has leveled the playing field by allowing smaller hotels to play big through access to world class marketing, revenue management, ecommerce and competitive insights tools and technologies.
Making it work
Independents clearly continue to excite and increasingly attract travelers today, and from our deep experience working with these properties in nearly every market, we have learned from our lodging partners the secrets to their continued success.
1. Focus on customer experience
Unlike larger hotel brands which are tied to strict brand guidelines, independent properties have the opportunity to create a unique local experience for the guest, clearly reflective of their community.
From locally sourced artwork, to unique culinary experiences, independents can create the customized guest stay that travelers today crave.
2. Leverage audience segmentation tools
Today’s boutiques and independents have more data and insights than ever before.
Hotels can see their corporate versus leisure bookings, packages versus standalone bookings, and data on their comp sets.
You may learn that your comps are getting huge traffic from London and you’re not. You can then dive into their rates, and even specifically target travelers from there to up your piece of the pie in any city.
Not only does technology allow properties to target travelers by city, country and region, it also allows independent hotels to reach global audiences in their own languages and currencies with no heavy tech investment.
Further localization is also helpful. For instance, in Japan, tapping is the preferred mobile interaction versus swiping, so Japan sites are often, and should be, built to accommodate this preference.
4. Leverage the experts
Knowing the nuances of your market helps you be smarter about your positioning.
Deep insights allow you to look beyond your comp set to see what other market factors may be impacting your bookings, like a 5-star losing a group booking and dropping into your pricing set.