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The future of the independent hotel market

The future of the independent hotel market

Expectations towards the independent hotel market are divided in different opinions. For some experts, in the long term, independent hotels are approaching a concentration. That is, they are approaching the fact of having to be part of large chains or franchises in order not to be left behind, as the hotel market is expected to […]

Expectations towards the independent hotel market are divided in different opinions. For some experts, in the long term, independent hotels are approaching a concentration. That is, they are approaching the fact of having to be part of large chains or franchises in order not to be left behind, as the hotel market is expected to become more and more sophisticated, which brings with it the need to invest a lot of money in digital and technological transformation, in management and in retaining talent through training. These seem quite strong challenges for tourism SMEs.

However, on the other hand, there are experts who argue and defend the viability of independent hotels. In this case, the idea is that hotels should strive to maintain a unique and differentiated product and, in this way, sell themselves. Furthermore, it is argued that those hotels that can develop well in a particular niche have opportunities to be viable in the future, but taking into account their ability to adapt their rates to a market that is highly competitive.

 

Aspects that independent hotels need to work on to reaffirm their future

On 24 November 2022, at the Hotel Puerta América in Madrid, Spain, a convention of Keytel (the first alliance of independent hotels, with more than 3,000 associated hotels in 80 countries) was held. At this convention, the future of independent hotels was discussed. From this, certain conclusions were reached that we would like to present below, as these will be of great help to owners who want to know how to maintain the viability of their business over time.

 

It is important to balance the marketing mix

Keytel spokespersons explained that “an optimal commercial strategy is one that allows the best results to be achieved with the least effort and cost, and in achieving this, the direct channel has a priority role, as it is the channel with the greatest opportunities for loyalty and the greatest value for the complementary offer”.

In this sense, direct sales must be optimised by means of far-reaching commercial strategies. To this end, strategies must take into account B2B (business-to-business) and B2C (business-to-consumer) distribution and the hotel’s distribution channel mix.

In addition, revenue management and digital marketing will be key to generating customers and optimising profitability.

The theme of sustainability

The theme of hotel sustainability was entitled at the convention as the “Competitive Regenerative Hotel”. That is, a hotel that must contribute to the economic, social, cultural and environmental development of the locality where it is located. It is estimated that demographic segments such as Europeans want to travel more sustainably, but hotels do not know how to meet this enormous challenge.

Therefore, every independent hotel owner must apply methods and efforts to develop their hotel activities with the least possible impact on the environment.

 

Technology as a tool to improve the customer experience

In Spain, the digitalisation index in the hotel industry stands at 46 out of 100 points. In recent years, technology has played a key role in hotel marketing and can be used to improve areas such as loyalty.

Having integrated and easy-to-use technology is important to improve the customer experience, as it allows customer data to be processed into information to facilitate processes. An example is the use of software such as PMS or CRM. However, it is necessary to consider that for the implementation of technologies it is necessary to invest and have extensive knowledge of the hotel’s processes.

Within the areas of expertise of specialised hotel consultancies, such as IHCS, you will find the knowledge and tools to correctly position and promote independent hotels so that they can achieve maximum success in the long term. Do not hesitate to contact us if you would like us to help you secure the future of your independent hotel.

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