Independent or standalone hotels don’t face a number of obstacles that are becoming bigger problems for operators and lenders of branded assets.

WHILE BRANDING is becoming an essential part of the hospitality business, trends seem to be moving in favour of independent hotels. According to a 2017 study from Expedia, independent hotels had a greater overall average daily rate and faster growth than their branded counterparts. Not to mention, independent hotels have doubled the pace of branded ADRs since early 2014, proving these hotels are occupying much of the industry. Independent or standalone hotels don’t face a number of obstacles that are becoming bigger problems for operators and lenders of branded assets. “As global and domestic brands increasingly try to chart their growth across India’s skyline, standalone establishments like ours have always rested on providing our guests with a unique experience and a personalized service to ensure sustained patronage,” says Vijay Wanchoo, Sr. Executive VP & GM The Imperial, New Delhi.

Travellers flocked to these hotels because they stood out from the others. The switch back to standalone property occurred when travellers started to want and expect more during their stays, more authentic experiences, more local culture and more one-of-a-kind moments. However, one cannot deny the fact that the branded hotel chains like Marriott International, Hilton, Accor or ITC Hotels are supported by incredible infrastructure and name recognition.

Providing personalised experience 

Unlike others, independent hoteliers have the freedom to design their hotels in a distinctive manner, without the restraints of strict brand guidelines. They're able to personalize themselves in a way that is unique to their location. “Millennials, the golden market segment everyone has been raving about, also seems to appreciate more authentic and original personalized experiences over a cookie cutter, of the shelve type of product. So for the years to come, I would say this is quite a good outlook for Standalone hotels,” Sanzeev Bhatia, VP & GM, The Metropolitan Hotel & Spa said. He further believes that the ultimate deal for an independent hotel is to be able to provide handcrafted experiences in a manner that is scalable. “For the independent hoteliers like us, if you do not have that exclusivity, within your property, I don’t think it goes well. It is a capital extensive industry and one has to be at par in the market,” Roop Pratap Choudhary, MD, Noor Mahal Karnal commented. 

Flexibility and freedom

Independent hotels can upgrade their assets when the market tells them to, not when the brand tells them to. “Our business has been scaling up each year as we continue to follow flexible business approach tailored to the dynamic market trends,” said Pradipta N. Biswas, GM, The Grand New Delhi. Sitting on the convenient seat of flexibility, what comes as a boon for independent hoteliers is the freedom of distribution and commercial strategies. “At the hotel level, branded chain hotels have no flexibility over strategy, no input into marketing, little flexibility over pricing and no control over their website. Standalone have all of that,” adds Bhatia. Standalone hotels by leveraging the online travel agencies and distribution platforms gain a global reach. Branded chain hotels have successful loyalty programmes, but standalone are free to take a more modern approach.

Attracting business

Citing an example of an independent hotel doing great in its business is The Imperial New Delhi. The property holds a unique positioning in the city due to its location and historical background and increasing competition or existing chain hotels have not affected the business till date. Continuing to be the market leader, Wanchoo feels that MICE business has high growth potential in the industry for both standalone properties and hotel chains as well. “We cater to premium MICE clients such as British Petroleum, Vodafone and Harvard University, Dell and Skypower in our office spaces to some of the most sought after clients such as Amazon, Facebook, and Nestle in our daily meeting rooms,” he further added. 

The Grand New Delhi is also known to be a much sought after convention hotel for hosting conferences, meetings and upscale events and exhibitions. With banqueting being one of its biggest strengths the property offers 30,000 square feet of versatile meeting, event & banquet space.

Challenges

The most challenging part of being a standalone is creating visibility and building the brand value. Social media tools like TripAdvisor and Zomato are coming to its rescue by providing great engaging platforms for many hotels. For instance, The Grand New Delhi rely very much on social media to reach out to their targeted market.  Biswas also feels that HR has also been the biggest concern till date. “It is extremely hard to attract the right talent and then retain them. There is a certain temperament required in dealing with an independent hotel and that is where the challenge comes in recruiting,” he stated. 

According to Wanchoo, one of the challenges that the independent hotel space is facing is that the market is shrinking as most of the renowned brands are sprouting across tier 2 and tier 3 cities making their services and experience available for an increasing number of global travellers, across the country. “In the current scenario, the need of the hour is to create value in the minds of the guests and bundle services for them to distinguish your establishment from the rest in the industry,” he suggests. 

Showing the upward occupancy graph

In spite of being in a continuous tussle with the domestic and international hotel giants, the solo properties are not leaving any stone unturned when it comes to the occupancy rates. Several factors like flexibility, providing a personalised experience and giving local-touch add up to their advantage which shows positive growth in the occupancy graph. The Metropolitan hotel & spa enjoys 80 percent of occupancy whereas NoorMahal Karnal marked on 70 percent of occupancy rate in the last calendar year. “Hotel occupancies have been averaging at 70 percent on month on month basis in 2019 and we are working closely with our business development teams to grow it further as we get into the year,” Biswas added.