As anyone in the industry can attest to, there’s a relentless barrage of brands on the hotel landscape these days, and the trend shows no sign of stopping. Hotel chains are releasing new prototypes every few months and innovative amenities continue to capture consumer interest, whether it’s a robot delivering room service or virtual reality headsets in the guestrooms. What’s more, acquisitions continue to breathe new life into brands and increase the strength of loyalty programs.

In this age of brand proliferation, independent operators struggle to capture market share. “It’s a unique segment when you try to isolate it because it has a very broad range of properties,” says Brian Stanford, senior managing director at CBRE Hotels in Toronto, listing off boutique hotels, full-service properties, small, family-run motels and units in secondary and tertiary markets.

Unbranded assets are a significant slice of the pie — Stanford estimates about 70 per cent of Canada’s hotel inventory, and 45 per cent of the overall room inventory, is unbranded. And, what’s more, “From an occupancy perspective, there isn’t really a significant variance between how independent and branded hotels are operating versus the national results.”

Independents checked in at 62.8 per cent occupancy in 2015, slightly below the national average of 64 per cent. This year, independents are forecast to increase occupancy to 63.5 per cent, just shy of the national forecast of 65 per cent. On the other hand, unbranded properties recorded a higher ADR than their branded counterparts, wrapping up 2015 at $151.66, compared to the national average of $143. “But that’s going to be influenced by a lot of boutique hotels that are running a fairly high ADR,” Stanford explains.

That doesn’t mean the sector is without its challenges. “For those smaller independent properties such as motor hotels and motels, they’re going to have challenges as we’re continuing to see newer, branded hotels coming into a lot of these smaller markets,” says Stanford, identifying the Atlantic provinces, Manitoba, Alberta and Saskatchewan as suffering the biggest impact, as well as independents in Ontario — home to the country’s largest inventory of unbranded hotels.

According to Stanford, consumers have a tendency to choose a branded hotel when booking through an Online Travel Agency (OTA) because of the quality and service guarantee offered by the brand, even if the independent operator may be as good, or better.

But Ida Albo disagrees. The managing partner of the Fort Garry Hotel, Spa and Conference Centre in Winnipeg says OTAs can work in independent properties’ favour, due largely to the “Uber-fication” of the industry, where user reviews can make or break a business. “Selling through third-party sites has levelled the playing field for independent properties,” says the hotelier, adding guest-satisfaction scores, property class, location and rates also play a big role. “It’s become less relevant whether I’m staying at a Fairmont or an independent property,” she sums up.

Aside from striving to earn top-notch user reviews, Fort Garry’s owners are constantly renovating and upgrading the historic property. The 240-room, century-old hotel was re-branded nearly five years ago to become a destination for weddings and events as well as a place for relaxation, thanks to its on-site Turkish spa, Ten Spa. “We’ve also started to incorporate free yoga classes,” Albo adds.

The team recently replaced coffee makers with a coffee and cookie service, delivered 24-7 to the guestroom, as well as offering a discounted $15 breakfast for guests. Currently it’s installing outlets to accommodate a wide range of technology and outfitting rooms with fur blankets to impart a cosy, home-away-from-home feeling.
These additions have generated results. “We’ve been able to achieve the same market share and RevPAR as branded properties in Winnipeg of a similar class,” Albo boasts, citing a more than five-per-cent increase in RevPAR and better-than-average occupancy, although she wouldn’t share specifics.

“We’re lucky we’re an independent property,” she says, adding “we don’t have a lot of overhead relative to the big chains. The biggest challenge is those third-party sites have generated a lot of business for hotels, but have also put downward pressure on rates. They also take a big commission [20 per cent],” she says.

Meanwhile, one of the challenges the team at Hôtel Le Crystal is preparing for is the change of supply in the Montreal market. “As the Fairmont Queen Elizabeth will be closing soon [to undergo renovations] we need to be prepared to accommodate more corporate clientele and groups. We are a small property (131 suites), so we need to be wise not to lose any business as that will be an opportunity for us next year,” says Guylaine Thériault Rehel, marketing manager.

It turns out 2015 was an excellent year for Le Crystal, which generated a 12-per-cent uptick in RevPAR and $249 ADR. “[It] was our best year since we opened,” boasts Rehel. “We are a young property (we opened in June 2008) and we did major renovations two years ago to be sure our product is still top quality. We changed the rugs in the suites, recovered the sofas, changed the TVs for bigger and newer ones, replaced the duvet, bed sheets and pillows. We also changed almost all the furniture in the lobby, to give the hotel a fresh look.”

Good things, small packages
Operating a small bed-and-breakfast allows the host to connect more deeply with guests, who in turn pen positive user reviews and reward hoteliers with repeat business. “It’s not a conveyor belt,” laughs Irish-born Elizabeth O’Carroll, who has been running The Pebble Bed and Breakfast in Halifax for the past 17 years, where rates range from $245 in May to $295 from July through October.

Recently, The Pebble earned the number-1 bed-and-breakfast distinction in the city from TripAdvisor. One reason is the luxe amenities on offer, including feather beds, goose down duvets, hydrotherapy baths and London-based Molton Brown toiletries. Inside the big European kitchen, the host treats her guests to her special Pebble blend of coffee, while getting to know them and recommending parts of the city and restaurants to visit. That level of personalization extends to the reservation system. “I don’t have online booking and that was a conscious decision on my part,” she adds. “It doesn’t take me long at all to respond to an email or pick up the telephone.”

But it’s not easy operating an independent establishment. “One of the challenges is marketing: I rely on search engines’ rating systems because I don’t have the budget for marketing like big hotels do,” says O’Carroll. She also lacks the flexibility to accommodate free cancellations with short notice.

But when it comes to rising above the sea of brands, hoteliers agree that being firmly engrained in the community — whether it’s serving locally sourced fare at Hôtel Le Crystal’s La Coupole, to sourcing artwork from Halifax at The Pebble, or supporting arts and culture initiatives at Winnipeg’s Fort Garry hotel — is key to lasting success. “We’re a very strong community-oriented hotel, so most of our marketing budget is like a sponsorship budget. We’re very active in the community and support a number of non-profit and arts and culture groups through events at the hotel and through different programs that we have,” says Albo. “This is where we generate our revenue, so let’s be good to our community, and, then in turn, our community will be good to us.”

Volume 28, Number 2

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