When the brakes come to a halt in the broader economy, they come to a halt in the hotel industry, he said. The offer has expanded to meet these changing demands, and to cater to different types of guests, which has seen the rise of different types of structures like boutique hotels, independent hotels and chain hotels. Holverson and Revaz ( 2 for their tourism growth. Register a free Taylor & Francis Online account today to boost your research and gain these benefits: Comparing chains versus independent hotels based on international sales: an exploratory study, a University of Bologna, Rimini, Italy;b Horwath HTL, Rome, Italy, c Universidad Internacional de La Rioja, Logroo, La Rioja, Spain, d Universitat Politcnica de Valncia, Valencia, Spain, Social media analytics: A tool for the success of online retail industry, Asymmetric information and deal selection: Evidence from the Italian venture capital market, Global-local trajectories for regional competitiveness: Tourism innovation in the western cape, Catalysts in introducing information technology in small and medium-sized hospitality organisations, A comparison of the performance of brand-affiliated and unaffiliated hotel properties, Expansion strategy of international hotel firms, Hotel chain affiliation as an environmental performance strategy for luxury hotels, Visitor attractions and events: Responding to seasonality, Modal choice in a world of alliances: Analyzing organisational forms in the international hotel sector, How firms relate to their markets: an empirical examination of contemporary marketing practices, Efficiency evaluation of hotel chains: A Spanish case study, Profitability determinants of hotel companies in selected Mediterranean countries, Determinantes en la eleccin del modo de entrada de las hoteleras espaolas en destinos forneos, The eclectic theory of international production: A case study of the international hotel industry, A comparison of the performance of independent and franchise hotels: The first two years of operation, European Hotels and Chains Report, Horwath HTL. The aforementioned brand impact isnt the only area where hotel financing differs from other CRE asset types. The majority of chain hotels are approved for tourism. These things stand there for 30, 40, 50 years, but consumer tastes change, consumer preferences change. Weve looked at the differences between these two structure types, but you may still be wondering if there is any way for them both to compete. To Be or Not to Be - Brand Affiliation in the Hotel Industry. For instance . These cookies allow a website to remember choices you have made in the past, like what language and currency you prefer, remember your name and email and automatically fill forms. Do brands matter? Investing in Hotels: Advantages, Disadvantages and Unique - LoopNet In some cases, the value of affiliation could be negative when the costs associated with the association are higher than the revenues received (Carlbck, 2015). Soft brands of international hotel companies are taking over. If you've ever spent a . Ravi Patel, president of Hawkeye Hotels, took the branded side in the debate. This cookie is set by GDPR Cookie Consent plugin. Lets look more in detail about the difference between these two different kinds of hotels, as well as discover whether these two types of structures can compete. 1 Wider potential for innovation is the advantage of independent hotels 2 Easily focus on resources 3 Personalization is easier in independent hotels 4 Adoption of any market shift is easy 5 More detail-oriented Wider Potential for Innovation Independent hotels can adopt new processes for enhancing their performance. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Cloudflare Ray ID: 7c088146c8c40cf3 You are not the first one. Ashley Donohoe started writing professionally about business topics in 2010. While you can sell an independent restaurant, you'll need to have put in the effort to make a reputation for yourself and show potential buyers that the purchase would be profitable for them. Hotel Franchise Disadvantages | Bizfluent When you run a franchise, the franchisor is the one who tells you what food you can serve, what your location must look like and what procedures you must follow in your daily operations. No other proprietors can use its name or brand. Their ability to offer experiences different than the larger, branded hotels appealed to the younger generation, anxious to have one-of-a-kind experiences. Eva has over a decade of international experience in marketing, communication, events and digital marketing. According to Ford Barton, principal of Lodging Partners, a brokerage and advisory firm focused on the hospitality and lodging sector, OTAs have fostered a commoditization of hotels. This, in turn, has often resulted in less pricing power for the hotels.. Here is what we found to be the biggest challenges with PMS solutions by hotel operation type: Independent Hotels. Freitag also mentioned that abundant data, including information found in the dSTAR Report produced by STR (which, like LoopNet, is owned by CoStar Group), is an industry attribute that investors can benefit from. For example, Franchise Direct reports that starting a KFC location can run anywhere from $1.4 to $2.7 million in initial investment costs, while Domino's looks for a net worth of $250,000. That is to say, independent hotels might use technology to create a seamless guest journey, enhancing the guest experience and being able to offer service 24/7. (, How power distance affects online hotel ratings: The positive moderating roles of hotel chain and reviewers travel experience, Intellectual property rights, complementarity and the firms economic performance, Perceptions of European independent hoteliers: Hard and soft branding choices, Organisational form as a solution to the problem of credible commitment: The evolution of naming strategies among U.S. hotel chains, Star rating and corporate affiliation: Their influence on room price and performance of hotels in Israel, Categorical data analysis: Away from ANOVAs (transformation or not) and towards logit mixed models, Department of Tourism Management Alexander Technological Educational Institute of Thessaloniki, Overcoming the liability of foreignness through lobbying: An examination of franchise systems, Construction of an instrument to evaluate the User eXperience of a group of co-creators in the upstream innovation process, Country-of-operation and brand images: Evidence from the Chinese hotel industry, Managerial academic experience, external monitoring, and financial reporting quality, Competition in the international hotel industry, Maximum likelihood algorithms for generalized linear mixed models, Greening the hospitality industry: How do green human resource management practices influence organizational citizenship behavior in hotels? Retrieved from https://www.hvs.com/article/953-a-case-for-being-independent, Skift Report (2018). That being said, chains tend to have a less personal touch, focusing on their brand standards rather than what each individual guest wants. The biggest advantage of an independent business or restaurant is that you get full reign over how you run it. Independents vs. brands vs. soft brandsPanel moderator Patrick Mayock, senior director of research and development at HNNs parent company STR, asked each panelist to start the debate by explaining the advantages of being an independent, brand or soft brand. Provisions relating to the exchange of services should be included in the term sheet. Daily physical activity. This is one of the most idiosyncratic asset types in real estate, as well as (potentially) one of the most rewarding. There are disadvantages to staying independent (unbranded). Should hotel owners partner with hotel brands or keep their properties independent (unbranded)? "Global Brand Expansion: How to Select a Market Entry Strategy." Cornell Hotel and Restaurant Administration Quarterly 48.1 (2007): 13,27,8. However, with an independent restaurant, you have the freedom to shop around for an affordable restaurant location and then compare the prices of suppliers, services and equipment to find an arrangement that fits your budget. The authors concluded that the value that the brand brings is not static and varies over time. Independent hotel brands have two major disadvantages, which of the most common is lack of capital to invest in marketing and business development, and the other is not being able to attract or retain top talents which makes marketing management a lot more inefficient compared to what international brands can do. So taking a spontaneous or unplanned last-minute holiday may not always be. Independent hotels advantages and competitiveness compared to chains 22 Oct, 2019 These independent hotels now account for 50% of the French hotel pool. One of the ways different hotels can be sure that they are offering a one-of-a-kind service is by carrying out a competitive analysis. But today, independent hotels account for less than 30 percent of hospitality venues. As a hotelier, you have to follow certain rules and standards and can not react to the market demands as quick and flexible as you wish. I think its far more important in the hospitality sector to consider the downside scenario, because the cash flow is so much more volatile than [it is in] other asset classes, he said. This group is simply not inclined to spend money or time on application . Pros and cons of the independent hotel - the popping post I reviewed the literature on the subject, and there is no simple answer. A 5-star hotel should give you a better experience than a 3 . But opting out of some of these cookies may affect your browsing experience. Advantages of Joining an International Hotel Chain 8 The correlation between chain penetration (in terms of rooms) and foreign arrivals is 0.3 in our data. A boutique hotel is a small, upscale, luxury hotel that has a distinct personality, intimate experience, and personalized service. LoopNet disclaims any and all representations, warranties, or guarantees of any kind. Brand affiliation for the small independent hotel could help to stay competitive in the market (Carlbck, 2017); however, for hotels operating in particular markets, staying independent could be more beneficial (Kwortnik, 2011; Stone, 2018). In other words, the unique features of hotel assets are myriad; but dont get overwhelmed. Independent hotels are more open to change. He has worked in the commercial real estate industry for more than 15 years, serving in a variety of marketing, content and communications roles for companies that include Newmark Knight Frank and Cushman & Wakefield. We noticed you're using Internet Explorer to view our site properly, please use a more up-to-date browser like Chrome, Firefox or Edge. It is established that everything that is not related to a hotel chain is considered an independent hotel . Proximity : an unbeatable relationship with the guest that allows quality support and communication for a better guest experience (favored by social networks). It is free of its capabilities and possibilities. He has also previously held positions as an adjunct professor, music critic and editor-in-chief of an online arts and culture publication. Please try again. Rushmore (2004) suggested that hotels with the following attributes did not need a brand: Exclusive location, unique architecture, rare amenities, boutique hotel, or an eye-catching name. She also has earned a Master of Business Administration degree with a leadership and strategy concentration from Western Governors University along with a bookkeeping certification. Part one, which centered around the current and anticipated near-term state of the market, as well as current investment opportunities, can be found here. We apologize, but the feature you are trying to access is currently unavailable. Brands can also be critical if youre courting the business travel market. Accordingly, an independent hotel that takes the money that it would have put into a brand and reallocates it toward search engine optimization (SEO) or other digital marketing efforts to attract online interest may be well-positioned in the 2021 hotel landscape.
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