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Hotel Chains: their characteristics and benefits

Hotel Chains: their characteristics and benefits

A hotel chain is a company that owns, operates or manages multiple hotels under a common brand name. These hotels share similar characteristics in terms of design, services, quality standards and often even décor. The idea behind a hotel chain is to offer a consistent experience to guests, regardless of where in the chain they […]

A hotel chain is a company that owns, operates or manages multiple hotels under a common brand name. These hotels share similar characteristics in terms of design, services, quality standards and often even décor. The idea behind a hotel chain is to offer a consistent experience to guests, regardless of where in the chain they stay.

Hotel chains can span a wide range of categories and price points, from budget hotels to luxury hotels. Some hotel chains are internationally known and have a presence in multiple countries, while others may have a more localised presence. I recommend that you take a break and have a look at the different hotel stars.

Characteristics of hotel chains

Hotel chains offer booking support, extensive marketing and advertising campaigns, guest loyalty programmes, brand standards (ensuring quality), consultancy support and peace of mind for lenders.

Examples of hotel chains include Marriott International, Hilton Hotels & Resorts, InterContinental Hotels Group (IHG), AccorHotels, among others. These chain hotels often have loyalty programmes that reward repeat guests with additional benefits, such as discounts, room upgrades and other perks.

However, it is not all plain sailing. There are drawbacks, the biggest disadvantage being the loss of independence. As a hotelier, you have to follow specific rules and standards, and you cannot react to market demands as quickly and flexibly as you would like.

The decision-making process is more time-consuming. Another disadvantage is that by deciding to be part of a chain, you give up uniqueness. Your property, as part of a chain, will never stand out.

These independent hotels can also join a flexible hotel brand or Independent Hotel Group, where they can take advantage of all the benefits offered by hotel chains without being limited by the associated restrictions.

It is therefore of vital importance to have professional advice, the decision making will be much more accurate and suitable.

 

LIFESTYLE HOTEL

In the hotel industry, the Lifestyle Hotel concept is not framed as a conventional category, but is defined by specific characteristics, sharing similarities with boutique hotels. Like boutique hotels, Lifestyle Hotels stand out for their uniqueness, distinctive character and charm.

However, they differ from conventional hotels in that they are aimed at a specific public or target group and not like traditional hotels, which are for a more generic public.

As defined by the Boutique & Lifestyle Lodging Association (BLLA), lifestyle hotels represent the evolution of boutique hotels, driven by hotel chains that incorporate the best elements of boutique hotels, such as small size, intimate ambience and modern design.

But at the same time, they add chain advantages such as loyalty programmes, consistency and economies of scale. This combination makes lifestyle hotels generally more affordable and accessible than traditional boutiques, contributing to their eventual mainstream presence.

In this context, lifestyle hotels can be seen as a variant of boutique hotels, adopting a franchised or chain hotel approach.

This is why boutique hotels are characterised by their small size and elegance, offering high levels of service. On the other hand, lifestyle hotels are recognised for their innovative approach and delivery of more personal experiences compared to conventional branded hotels.

An example of this type of hotel is the resort that Hard Rock has created in the Maldives, which straddles the line between its well-known rock ‘n’ roll style and tropical paradise.

 

WHAT IS RACK RATE?

The term rack rate commonly refers to the standard or full rate that a hotel, resort or other accommodation establishment charges for a room without any special discount or negotiation.

This rate is usually the highest rate that the establishment offers and is used as a benchmark for calculating discounts or special rates that it will apply to both its individual and wholesale customers.

The idea behind the rack rate is to establish a base price before applying discounts for advance bookings, promotions, loyalty programme memberships or other offers. Travellers who book directly with the hotel can often obtain lower rates than the rack rate, especially if they book in advance or as part of promotional packages.

It is important for every hotel establishment to have such a standard rate on which to apply discount margins in order to have a clear return on investment (ROI).

In short, the rack rate is the full or standard price an establishment charges for a room before applying any discount, promotion or fam trip.

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