Soft-branded hotels work for some owners, but other owners prefer the independent route to remain unique.
In our industry we often refer to moments. This broad umbrella term could be in reference to almost anything from guest-facing moments of truth, to the “a-ha” moments during employee training and development where you can see the learner click on and advance their understanding.
For independent owners and operators, there comes a moment within the ebb and flow in which you are faced with a decision that had not even been contemplated since the embryonic stages of when you first decided to get into the business. Do I remain in the independent space, do I soft-brand with a major franchisor or do I go all in and bring on a full-branded flag and all the benefits and frustrations that it could bring?
Just recently, I witnessed this exact moment play out within an after-hours social event among successful operators that had each taken different paths down this road. Phrases such as “I will never sell out my business” were refuted by “My business had never seen so much revenue growth year over year after I partnered in a soft brand” to the ultimately envious statement of a third hotelier who stated, “I have never been to so many cool brand conferences in a single year after I went all in.” While many independent hoteliers are indeed a little jealous of the cool annual trips, many find a larger amount of pride and comfort within the four walls of a location they have and continue to develop and maintain through sweat equity.
For decades, there were only two choices. Either you were a fully branded property or you were left to design and execute a brand concept on your own—not to mention cultivate new business, develop a booking engine and marketing plan and go out and sell. Oh yes, all while operating a 24/7/365 business.
Only the strongest of entrepreneurs preferred the hard road and were convinced that once discovered by prospective guests, the uniquely independent ways of their operation would be enough to sway the thought process away from the same old cookie-cutter, big-box experience you could find along any highway up and down the country. Finding success within partnerships such as historic building projects, playing key roles in revitalization of local city centers and becoming community stalwarts was a winning equation for the most successful independent hoteliers.
As success grew over the years for owners, they were presented with a conundrum of how they could continue to drive profitability, grow their business and reach more people with their strong but limited resources. At the beginning of a business, this is simply an early decision that shapes your first steps. It presents itself as the conundrum years later after proving you can be highly successful on your own but making you realize you are at a glass ceiling. Do you keep your derived identity or do risk losing everything that made you so special in the first place?
Around this same time, major hotel companies had already taken notice of the success of these independents and were having conversations on if designing a new brand line was the way to go. They also considered whether there was an easier inroad that provided the international backing and toolbox of their own business power in which they could leverage in concert, with already established and successful properties that would not inhibit the organically grown local experience these sites had already laid the groundwork for. The soft-brand concept was born.
While it has taken on many forms through different hotel companies, the fact remains that the soft-brand partnerships have proven to have saved numerous businesses from going under thanks to the power of branded distribution channels, corporate-level expertise in key items such as revenue management and sales/marketing efforts, not to mention the expansive network of the loyalty members who seemingly overnight have been made aware of your product as a new destination option.
Let me be clear, the soft-brand choice is not for everyone. Even in my own career, I have operated within portfolios that housed independents, soft brands and flagged properties all at the same time. They all serve a targeted purpose and end goal for the asset owners. While there are clear advantages with established brands that aim to assist in increasing revenues, only engage if you are confident after thorough review and evaluating similar projects that the essence and magic of what your independent story is will remain the foundation moving forward.
In the end of the conversation I began this column with, I was waiting for my car as the three hoteliers exited the building and shook hands, bid farewell to one another and walked out to their waiting cars at the valet stand. With the branded- and soft-branded operators getting into a large SUV and high-end luxury sedan, respectively, they looked back at the single independent hotel operator who stood next to me awaiting his car and joked that he too could drive one of these if he just “sold out to the brand,” and after a few more laughs they pulled away.
Before I could even lean over and inquire more about why he had truly remained independent in the face of everything that was presented in the conversation that evening, my car arrived followed by a brand-new Maserati pulling up behind. He looked over and laughed and said, “If they only could understand that sometimes being unique and different while doing it on your own could be the difference between being a standout versus just another number.”
Brandon M. Springer-McConnell is a Vice President for IDM Hospitality Group. His experience with both branded and independent properties has afforded a unique perspective of the operational challenges faced on a daily basis to an array of hospitality business models. His expertise includes strategic career development and succession planning for leaders, organizational structure and development, government affairs and hospitality law.
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