The Top Concerns of Independent Hoteliers

And Some Solutions

By Pamela Barnhill President & COO, IHT, IBC and IVH Hotels | December 25, 2016

Even though independent hotels consistently make the news, the concerns of the owners and managers of independent hotels are often overlooked. Many cite consolidation, low margins, distribution, loyalty programs, rising operational expenses and technology as some of their key issues. How are independent hotels meeting these challenges?

With capital flush and entrepreneurs eager to enter the new peer-to-peer economy, the rise of fresh ventures has created a breadth of innovative, stimulating options for independent hoteliers. This is an exciting time for hotel owners who are ready and willing to embrace the changing landscape.

Consolidation

Last year and early this year have been a banner period for deal-making for buyers and sellers alike. What's curious is how attitudes differ on whether it is time to buy with plenty of upside or time to sell for fear of oversupply and a pending recession; opinion is truly split. Also, many are rumbling about a hospitality technology bubble in the brewing. In this low-margin business, we have already seen large consolidations among OTAs, so one may say that is a natural progression in brands, management and tech companies to scale.

But the naysayer may counter, "How will they maintain the culture or loyalty program?" or "Why was that really necessary?" Could it be that as brands, they are suffering and direct bookings are down? Could the brand be delivering less? Look at the monthly bills and line items and it's clear which bookings came from GDS, OTAs, meta and brand.com/CRO. A recent review of one such bill was very interesting: After stripping out GDS, OTA and meta, what was left that was truly owed to the brand.com was minimal.

The Landscape

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.