Idyllic scenery, unique marketing tactics and surprising perks coupled with service excellence are just a few benefits that set independent hotels apart from the competition, but operating without the safety net of brand support can be tricky. The good news is many independent hotel operators are achieving the same successes as their branded competitors.
According to PKF Consulting, the overall hotel market is on track to achieve a national occupancy rate of 63 per cent, an ADR of $132 and RevPAR of $83. “In terms of branded versus non-branded properties, there is not much difference in rate performance. Branded hotels are doing only slightly better with 64-per-cent occupancy, and independents are at about 60 per cent,” says Brian Stanford, national managing director at PKF Consulting’s Toronto office. “When we look at the non-branded segment, we need to consider boutique hotels, which do very well, along with small motor hotels in tertiary markets that have a hard time meeting brand standards. Those properties make up a big piece of the industry and, more and more, they are being pressured into brand affiliation. Today, we have about 50 per cent branded room inventory where it was only 30 per cent 15 years ago.”
That’s good news for unique hotels such as P.E.I.’s Inn at Bay Fortune. Set in a rural fishing-and-farming community, the 100-year-old property’s sweet spot is its restaurant. “We’ve always focused on food,” says David Wilmer, the property’s innkeeper, as he reflects back to 1992, when he hired now-famous chef Michael Smith (who still makes guest appearances). Their relationship sparked The Inn Chef, a popular TV cooking series hosted by Smith, which showcased the Inn’s cuisine as well as its ties to local farmers and fishermen. As a seasonal operation (typically open from late May until mid-October), much of the hotel’s fresh produce is sourced from its gardens, and it celebrates local eats, such as North Lake Bluefin tuna. “As an independent hotel, it’s more difficult to wave your flag and get people’s attention than it is for the larger branded hotels,” he says. “The Inn isn’t just a place to stay, it’s a foodie destination.” In fact, it’s P.E.I.’s only spot with a CAA Four-Diamond rating as well as a Wine Spectator Award of Excellence.
But, of course, the hotel is about more than the food. “I’m always working on marketing and the website, where in a larger organization you have people who are hired specifically for advertising and social media,” Wilmer says. And, although the inn is busy with honeymooners, fishermen and golfers each season, today’s new operating environment has had an effect. Last year was difficult, Wilmer confesses, preferring to keep numbers private. “This year was our best since 2010, in terms of dollars and cents, and for room bookings it was our best since 2008. There’s a new paradigm. I do about two-thirds of the business I used to do [before 2006].” While he’s adjusted to a less fruitful market, Wilmer sees a brighter future. “I think we’ll see slow incremental growth,” he says.
Meanwhile, experts are predicting growth outside of rural areas. “We will continue to see development of unique boutique hotels in urban centres where there is a niche for high-quality properties,” says PKF’s Stanford.
Vittorio Di Re, GM of Montreal’s Saint Sulpice Hotel, agrees, but admits there have been struggles in the recent past. “In 2012, there weren’t as many conventions in the city as usual, but it was busier in that sense this year,” he says. “We’re also looking forward to the 375th anniversary of the city in 2017. The celebration is very promising, especially when we look at how well Quebec [City] did with its 400th anniversary in 2008.” Di Re, who has worked for brands such as Best Western and Radisson, joined the historic 108-suite boutique hotel in 2010. Since then, Le Saint Sulpice has undergone a gradual transformation where everything from linens and mattresses to coffeemakers and cutlery has been replaced or updated. “The hotel wasn’t up to standards for a luxury boutique property. It was when it opened in 2002, but you have to keep up with trends,” he says.
Along with the hotel’s tangible improvements, performance has been shaping up over the past three years. Since 2010, occupancy has increased by 17.76 per cent, ADR is up 7.17 per cent and RevPAR has jumped 26.21 per cent. “A room is a room, but the service and attention to detail is what makes people come back,” says Di Re. Top-notch service complements the hotel’s extraordinary marketing efforts, such as its signature lotus flower scent released through the ventilation system and the short film it released called La Valise (The Suitcase), a mysterious fictional tale about four guests staying at the hotel. “We ran the trailer on CBC during prime time, had posters all over the city and hosted a red carpet premiere event,” the GM says of the 2012 campaign that led the hotel’s 10th anniversary celebrations.
In 2012, Le Saint Sulpice was ranked Montreal’s number-1 hotel in the Condé Nast Traveler Readers’ Choice Awards. This year, the hotel won gold in the Grand Prix du Tourisme Québécois 2013. “A big factor in winning [the Grand Prix] is innovation. In a branded hotel, you’re limited in what you can do,” Di Re says. “As an independent, you’re not stuck to marketing restrictions, but you also have to do everything yourself and be sure you don’t make mistakes. The film took a large portion of our budget, but it increased visits to our website, and our numbers continue to grow.”
Flexibility in marketing is indeed a boon for some independent properties but not all. “Unless an independent is offering something unique, the recognized branded asset equipped with marketing and reservations support is tough competition,” Stanford says. “Independents are experiencing increased pressure to effectively market and differentiate themselves. If you have a good hotel and competent management it can work really well, without giving up eight to 10 per cent of revenue to a franchisor for those services.”
Vancouver’s independent Canadian-owned and -operated St. Regis Hotel distinguished itself while celebrating its 100th anniversary this year. In honour of the property’s first century, marked on March 15, it sold 1,000 rooms at $100, donating $5,000 of the revenue generated to the Strathcona Community Centre’s children’s meals programs. “Rather than having a party, we decided to give back to our community,” says Jeremy Roncoroni, GM.
The team at the recently revamped 100-year-old hotel, which is constantly being revitalized, also provides guests with the best in technology trends, offering high-definition TVs featuring more than 200 channels in rooms, Wi-Fi, unlimited international calling and a well-equipped business centre. “We don’t nickel and dime our guests for anything,” he says of the services for which many hotels charge additional fees. The amiable GM is exploring the idea of providing slippers in-room, inspired by the hotel’s many Chinese clients.
The past year has been a positive one for Roncoroni, with occupancy up 0.75 per cent, ADR increasing 3.5 per cent and RevPAR climbing 4.6 per cent. “I think we are going to see a minimal increase in occupancy over the coming year. Our focus will be on enhancing what we’re already doing,” he says, explaining that one of the biggest challenges for a luxury boutique property is consistently meeting high guest expectations. In September, as a response to the unfavourable CBC exposé on hotel cleanliness in Canada, Roncoroni hired someone to help roll out even more rigorous housekeeping than what was in place. “With new hotels opening soon, we will have to fight harder to build and sustain occupancy rates and RevPAR,” he says. “It’s time to get back to basics — great value, superior service, impeccable rooms and a good night’s sleep.”