What is the meaning / definition of Independent Hotel in the hospitality industry?
An Independent Hotel is a hotel that is independently owned and run. It doesn’t allow any other proprietors to use its name / brand.
Basically all of the hotels which are not related to a hotel chain are considered ‘independent’. They might sign up to so called ‘voluntary chains’, meaning they remain independent but adhere to the standards and requirements of a bigger brand. That way they benefit from the marketing power of the big brand and it helps them to compete against the chains.
An example of a ‘chain’ of independent hotels is Best Western.
Travelers expect for their chosen hotel to lean towards their wants and needs. A big advantage of an independent hotels is that they have the flexibility to provide special and personalized services compared to corporately-owned and operated hotels, as the large chain brands have restrictive rules and protocols. An independent hotel can provide the guests with what they are looking for – to enhance their stay with unique memorable experiences that a large chain can not provide.
The benefits of a hotel being independent are:
- Flexibility: It can react to the changes and requirements of the market quicker than a hotel belonging to a larger chain. The reactivity and power of decision limits monetary losses and boost management tasks.
- Variable pricing policy allows quick and flexible decisions made in Yield and Revenue Management to adapt to the demand and the market behaviour and to increase the revenue.
- Financial Autonomy, meaning it doesn’t have financial pressures from a chain group that requires a certain performance. It is yield by independency of decisions on his capacities and abilities
- Uniqueness! Every independent hotel has a different offer and also there are many types of independent hotels, such as Boutique, Luxury, Budget, Hostel, Design Hotel, etc. It can offer niche products and be targeted to a specific clientele. It offers an unique experience to the clients and therefore recognition value
- Proximity to the client and a unique customer relationship (i.e. using social media)
On the other hand, a disadvantage is that it doesn’t have the support of a major affiliation (marketing support, negotiation power against travel agents and OTAs etc.)
- Independent Hotel