LONDON—If the independent, boutique hotel aligned to a soft-brand consortium looks over its shoulder, it will see swiftly coming up the road a gaggle of new, big-brand copycats. These include Autograph (Marriott International), Curio (Hilton Worldwide Holdings) and Luxury Collection (Starwood Hotels & Resorts Worldwide).
The race is not over. Independent boutique offerings can outpace these new upstarts by being true to their vision, enjoying flexibility and going beyond the call of duty in regard to their guests’ expectations and experiences, said panelists attending the Boutique and Lifestyle Hotel Summit.
Speaking at the opening panel session titled “Sales representation versus hotel soft brand,” Michael Prager, non-executive chairman of Optimal Monitoring Limited and Hospitality Pro, said boutique hotels, defined typically as having fewer than 150 rooms and trading toward the top end of the rate spectrum, can still remain distinct because the big boys cannot replicate what they have.
“(Boutique hotels) always have a quirky element that would make it difficult to be part of a brand such as Marriott,” Prager said.
Standardization requirements of the large chains, in other words, will turn what they hope will compete with independents into something else that does not offer the same attraction.
“The experience of the guest will not be standardized, but the soft brand has to stand for something. (At Pride of Britain Hotels), we have a maximum limit of 50 hotels, and it is up to the membership hotels who gets to join,” said Peter Hancock, chief executive, Pride of Britain Hotels.
A true soft brand is a consortium where an independent hotel has the best of both worlds, he said.
Hancock likened it to a pregnancy in which the mother could choose her due date, hand the new born back if she did not like it and have no long-term obligations to the father.
Bullies on parade
Panelists understand fully the business considerations of the large chains in terms of the soft-brand space.
“The big boys are coming in, and why would they not? It’s a valuable space,” said Alejandro Garcia-Andrade, business development manager of Luxury Hotels Group.
“(The large chains) are definitely invading our space, eating our lunch, and that would be expected from very successful, powerful companies. It’s flattering, but it is annoying, too. I think intelligent (independent) hoteliers will see that (soft brands) and these new incomers are two separate things that merely claim to have the same name,” said Philipp Weghmann, executive VP of Europe for Preferred Hotels & Resorts, who agreed flexibility is key to the type of property wishing to remain in the true soft brand fold.
“Owners are not forced to adopt standards that might not be relevant, but they do often need and want support; they cannot do it all themselves, and (soft brands such as ours can) access market without taking away uniqueness,” Weghmann said.
Soft brands, hard threats
Encroachment from the large chains is not the only headwind making life hard for soft brands.
“Customers do not care about the owner-brand relationship, but what is helpful to them is the presence of the brand, a powerful marketing message,” Hancock said, who added that he feels soft brands envy the chains for their reliability.
Panelists said the marketing spend of large chains is a threat, as is the erosion of the star-rating system due to how disruptors—TripAdvisor was mentioned many times—now frame distribution, with such criteria as review-led ratings.
“(Soft brands have) embraced changes as they have happened, and we need to embrace them all,” Hancock said in response to one audience member saying TripAdvisor allowed him to leave a soft brand, and the membership costs, as he no longer needed its marketing.
“TripAdvisor is relevant,” Garcia-Andrade added. “It has changed entirely how people view distribution, but there is a risk in having dependency on online travel agencies.”
“If, for instance, you had a nightclub in the hotel, really cool, you would not hire the best architect and then the best DJ only to put all the entrance tickets on a blind selling platform such as an OTA,” Weghmann said.
Panelists said hoteliers need to exercise their ability to decide what inventory to lay on the tables of OTAs.
“Millennials can face the market in a very different way, and soft brands need to look at this trend,” Garcia-Andrade said, the allusion being that many members of soft brands veer toward the traditional and/or expensive end of the market that might not see too many guests in this age bracket.
“Looking at things optimistically, boutiques are here to stay, driven by millennials, with the baby boomers now mimicking them,” Garcia-Andrade added.
Weghmann sees technology and disruption as potentially leveling the playing field.
“Amazon entering in the market will put pressure on the OTAs, hopefully more reasonable commissions,” Weghmann said.
“I have no idea what the future will provide,” Hancock added. “Things always will come that take us by surprise.”