NASHVILLE, Tennessee — Independent hotels are performing well despite the tough economy as operators leverage their flexibility to create authentic experiences to attract guests and make other changes quicker than the big brands they compete with, according to hotel executives who spoke at the 2024 Hotel Data Conference.
Hoteliers who participated on "The Independent Mindset" panel said business at their independent properties has been buoyed by corporate travel, especially group travel.
"Generally our independent hotels are doing really well" and have outperformed branded hotels, said Romy Bhojwani, senior vice president and head of asset management at Philadelphia-based HHM Hotels.
Bhojwani said the ability of independent hotels to increase room rates is a significant reason they're doing well.
"Our independent hotels are pushing rates to those they haven’t seen," he said. "Overall we’re very bullish. We’re not seeing a slowdown there, from a pricing standpoint."
Cvent, a company that provides software for hospitality management and meeting and event planners, has seen a "steady increase year over year" in business for independent hoteliers as business travel and group demand rebound, said Allie Bennett, Cvent's principal account manager of the hospitality cloud.
Before the COVID-19 pandemic hit, companies wanted to host meetings that were "outside of the norm," Bennett said. Coming out of the global health crisis, companies just wanted to have meetings.
"Now, planners are saying they’ve reverted back to 'It is about the experience,' and that’s what’s most important to them," Bennett said.
The recovery of business travel and group demand makes the hotel industry feel more optimistic about the year ahead, EOS Hospitality senior director Ross McAlpine said.
"Business travel and group has come back; ’25 is looking a little better for us," he said.
EOS is using its ability to be "really targeted in our messages" and to gain customer insights from data available to independent hoteliers, McAlpine said.
Still, travelers are being more judicial with their spending, said Harry Carr, vice president of revenue management at Davidson Hospitality Group's independent division Pivot.
"We are seeing a little bit of a pullback in our pure leisure travel," Carr said. "On a Tuesday in July in Florida, [travelers are] not willing to pay a premium. People are willing to spend, but they’re being a little bit smart about it."
As corporate event planners book future trips, they want to give employees "unique and memorable" meetings they'll want to post on social media, "something that’s Instagrammable if you will," Cvent's Bennett said.
This provides an advantage to independent hotels that typically have more flexibility than branded ones, Bennett said.
Bhojwani agreed.
"As an independent you have all the creative freedom you could possibly want to create these experiences," he said.
But he stressed that any program independent hotel operators create "has to be local, different" and provide "a great experience."
"It’s the want for experiences to have something unique," Bhojwani said.
Resort guests are willing to pay a premium for those experiences, "but it has to be truly authentic," he added.
Bhojwani offered an example of an authentic experience HHM created at its Sea Crest Beach Resort in North Falmouth, Massachusetts. HHM launched "a New England streetscape" on the Cape Cod property that featured beers from local breweries.
"That has been so wildly successful" and resulted in organic social media output, Bhojwani said. It also resulted in guests' ancillary spending during summers months at times exceeding the resort's average daily rate, he said.
The foundation of any program to provide unique experiences needs to be local, EOS' McAlpine said. One such program it launched was a community impact program at Isla Bella Beach Resort in Marathon, Florida. The hotel collects funds through a 1% fee paid by guests to help local nonprofit groups and charities.
Some of the money collected supports the Conch Republic Marine Army's effort to clean up the local shoreline and mitigates the hotel's impact on the environment. The program has been "great for staff morale" and for guests who want to feel a local connection, McAlpine said.
"We have almost no pushback from guests about paying that fee when it’s explained it’s going back to the community they’re staying in," he said.
Capt. Brian Vest, founder and president of the Conch Republic Marine Army, said EOS' program helped the group purchase a boat used for the cleanup. EOS also provides a free slip for the boat, Vest said.
EOS has donated "almost a quarter of a million dollars" to how non-profit group, Vest said. "Guests donate when they get off the boat, too," he said. "All of them want to give to the local community."
When independent hoteliers launch new programs at their properties, "You have to make sure the entire team understands what the experience is," Carr said.
In Kansas City, Missouri, Davidson added igloos to the rooftop pool area at The Fontaine to attract guests long after summer ends. The Nine Zero One Igloo Bar has become a sought-after holiday destination, according to the Fontaine.
The igloo bar shows that an experience created to differentiate a hotel "doesn’t necessarily have to be something crazy."
The unique experiences independent hotels can provide are sought after by event planners, Cvent's Bennett said. In fact, 44% of them desire programming they can’t get from big brands, she said.
"Customization that independents are able to do are wanted by planners," Bennett said.