Pros and cons of the independent hotel
The hospitality sector is vast and made up of a multitude of accommodation offerings. It is established that everything that is not related to a hotel chain is considered an “independent hotel” .
To tell the truth, the small and medium-sized companies that operate in this sector share similar operations and characteristics that are their own (with their benefits and drawbacks).
Generally, the independent hotel is managed as if it were a family business, with a limited and versatile team in its activities. The volume of passengers is not very high compared to a chain hotel, but it is similar in terms of figures per activity.
This result is the direct consequence of a specific management and administration that entails advantages and disadvantages.
Advantages of the independent hotel
Flexibility : the manager’s reactivity supposes an almost instantaneous decision-making power that limits monetary losses and increases profitability. Example: staff organization that counts ten people from one day to the next.
Fixed prices : the established price policy, being little variable, ensures a constant and clear “revenue”. With the cost savings for “Yield Management”.
Unique experience : there is always a different offer, from the hostel to the boutique hotel. It may be because of the architecture of the place but also because of the services designed for a niche clientele: there is no comparison with a single offer, therefore there is less competition and an economy due to specialization (it reduces costs by not having an extensive offer that pleases everyone ).
Financial autonomy : independent accommodation does not have financial pressures from a group that demands a certain return. It is free of its capabilities and possibilities.
Proximity : an unbeatable relationship with the guest that allows quality support and communication for a better guest experience (favored by social networks).
Advantages of hotel chains = disadvantages for the independent hotel
Volume: hotel chains, due to their standard and extensive offer, benefit from economies of scale due to the expansion of their business and the reduction of costs for bulk purchases and management. Example: an employee for 50 reservations instead of 10 is more profitable.
Yield Management : a system that enhances profits by calculating supply and demand (widely used by hotel chains).
Promotion : a marketing and communication office that is in charge of advertising the chain as a whole and the individual recognition of each structure.
Agreements : a large booking platform accompanied by agreements with agencies, tour operators and OTAs, constitutes an impressive commercial force. Click here for Desk booking system for hot desking.
Trying to maximize the advantages of independent hotels in small accommodation such as B & Bs, hostels, country houses and small hotels is one of the keys to differentiate yourself from the chains and to be successful!
The objective is to know very well the business that is being managed and to know how to identify (and differentiate) the pros and cons.