Independent hotels vs. Global brands. Fair game?

Posted on June 28, 2010


I was reading recently this report on

Fawlty towers“According to the hotel research company MKG Group, over 80,000 hotel rooms have been added to EU hotel supply (reaching 147,000 hotels and 5.2 milions rooms), half of which in Spain, Germany and Italy. According to MKG Hospitality, the EU is experiencing a certain level of restructuring, with outdated independent properties fading in favour of new economy-budget hotel products, particularly in France, Germany and the UK. Chain hotel are also strengthening their position, now with almost 11,500 hotels and 1.3 million rooms, representing just over 26% of total number of rooms.

So it looks like the usual rule in Europe where independent hotel represent 80% of the inventory is not true anymore. Does that mean we will reach the sale level of standardization in hotels in the US, probably not. But it means independent hotels have joined franchisers to probably sell better their property and be more competitive with a bigger marketing budget available at the head office level of the brand.”

It shows the power of a brand and the power of integrated marketing. We all would like to think that global hotel chains are going against the trend of more personalisation and individuality but at the end of the day the figures talk. The travel industry feeder markets have spread globally and traditional distribution channels still holding strong in some markets. So unless you have a global structure to manage it, it is proven to be challenging…. Asia is slowly going through the same re-structuring process with the Majors adding more branded flags every months. While many hotels in upcoming Asian destinations were developed in the 80’s by individuals or conglomerate as a secondary business (to host friends or be a sleek showcase) without in-depth expertise, brand credibility and distribution network, today’s economical reality and industry complexity makes it very hard for independent hotels to survive on the long long term.

Interesting figures using Bangkok as an example:
– 210 hotels in Bangkok are listed on
– 23 Accor hotels
– 7 Starwood hotels
– 7 Marriott hotels
– 7 Amari hotels (Onyx hospitality)
– 3 IHG hotels
= 22.4% of the hotels in Bangkok are controlled by five management companies

Where is the opportunity?

Guests staying at independent hotels are looking for an experience that they can not get, rightly or wrongly, at a branded hotel. This is the great opportunity to create a desire and added value that the some sterile branded hotels won’t be able to offer. But remember that branding and advertising become hugely expensive and ineffective when you don’t really know who you are marketing to. Once the concept and positioning have been defined you can build a brand strategy around them.

A very common mistake made is to hire the architect, the interior designer, the food and beverage consultants and the hotel staff before developing a brand strategy plan. It is imperative that the independent hotel owner takes branding as seriously as their branded competitors. The independent hotel must first nail down their concept and define their audience from both a demographic and psychographic perspective. Then the rest can follow.

Fabrice Burtin – June 2010