The travel industry has experienced a remarkable boom this year that is worth celebrating, Luxury hotels are more in demand than ever, which creates new opportunities for properties to connect with consumers that align with their needs, values and interests.
Independent hotels in the luxury sector offer a wide range of benefits to explore, including the type of immersive experiences and unique destinations travelers are craving right now. Hospitality brands have an opportunity to capitalize on this surge of interest by partnering with independent hotels and growing their global portfolio in sought-after regions.
There are many independent hotels around the world that understand the value of these collaborations to maximize their potential. This approach is proving to yield success at WorldHotels, with our global portfolio slated to grow by over 25% by the end of 2023. In light of current market forces, the rebound of travel, and overall state of the industry, partnering with independent properties can provide strong ROI for global hospitality brands.
Exceptional independent hotels are often looking to connect with a global brand for a mutually beneficial partnership that can help them grow their market share and reduce costs. At the same time, brands can tap into established properties that have their own background, highlight the destination, and understand how to provide a genuine hotel experience that offers what travelers of today are seeking. This presents a symbiotic relationship for both the brand and the property.
Independent hotels can strengthen their position and increase opportunities for success through engaging a brand with extensive infrastructure. A global hospitality brand offers a variety of benefits, including international sales and marketing departments, state-of-the-art technology, a widely recognized loyalty program, distribution capabilities, and customer care support. An established brand can also provide valuable data that is beyond what is available at an individual property, allowing independent hoteliers to strategize more effectively. Also, hotels that connect with a larger brand can build consumer confidence and notably increase revenue with the additional support, whether for soft or hard brands. Consumers are more likely to book a hard- or soft-branded hotel than an independent, even when using online travel agents.
On the brand side, tapping independent hotels can expand the brand’s global reach, allowing them to seamlessly reach new markets through a valued property that provides an authentic, immersive experience. According to the American Express study for ILTM, “Buzz v. Reality: Decoding the Luxury Travel Consumer’s Mindset,” brands should be aiming to curate a portfolio with options in many global destinations, especially with international trips (50%) overtaking local/regional trips (23%). Central and South America and Asia-Pacific are prime for this type of expansion. WorldHotels is exploring those markets, so new properties will be debuting soon. North America is another ideal region for portfolio expansion with acclaimed independent properties looking to align with brands. Because of this, we anticipate WorldHotels will see the most growth in the U.S. this year, along with Canada and Mexico.
Back to the consumer, travelers – especially Millennials – also want to experience something a little bit different and off-the-beaten-path, and oftentimes the location of these independent hotels checks that box. More travelers are seeking out luxury hotels in remote or secluded destinations that can cater to their interests, and the perception of all-inclusive resorts has shifted considerably. Travelers are looking for experiential and private offerings when choosing their accommodations, so boutique hotels are ideal choices with their amenities, from acclaimed restaurants and spas to programming that connects them to the destination.
In terms of development, we are in a cycle of conversions in most of the world with some exceptions with new construction in APAC and LATAM. Boutique and independent hotels are performing particularly well in recent years. According to CoStar, revenue increased in 2022 compared to 2019 across independent boutique segments, from luxury to upscale.
Now is the time to maximize the potential for independent hoteliers and brand families through mutually beneficial partnerships. As we see the boutique experience combined with industry-leading support from a global brand more often, the hospitality industry’s next chapter will be an exciting one to watch.
With WorldHotels, independent hoteliers can tap into the power of a global hospitality enterprise and gain support from a brand that celebrates each hotel’s authenticity.
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