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Staying Independent in the Age of Soft Brands

Staying Independent in the Age of Soft Brands

Stash Hotel Rewards CEO Jeff Low has seen it happen time and again. As major hotel companies ramp up their soft-branding efforts, more and more independent hoteliers are joining collections like Curio, Autograph, and Ascend to reap the benefits of being affiliated with a big brand. “It’s a function of the dynamics of the industry,” Low says. “It’s harder to run an independent hotel in many ways, but mostly because they don’t have the marketing of big brands.”

Low explains that building a hotel from the ground up is often a costly and difficult process. Independent hoteliers must seek out investors to get their project off the ground and must ultimately make a return on those investments. When new projects are associated with major brand names, investors often feel more comfortable because the brands have accrued credit and have a reputation for making returns.

“There are more financing options available when a hotel is associated with a chain through a soft brand, because lenders perceive there to be less risk,” Low says.

Because independent hotels don’t have the name recognition of top brands, they often rely on online travel agencies (OTAs) to help fill rooms. This comes at a price, however, as third-party booking sites often take about a 25 percent margin from these hotels, which hurts their bottom line.

Additionally, independent hotels must compete with the robust loyalty programs of the mega-brands. Frequent business travelers and those who spend 60 nights or more on the road typically book strictly with their favorite brand in order to rack up rewards points. Many frequent travelers will not even consider staying in a hotel unless they can participate in some form of a rewards or points program.

By creating a loyalty program specifically for independent hotels, Low turned challenges into opportunities. Founded in 2010, Stash Hotel Rewards helps more than 150 independent hoteliers with marketing scale, loyalty, and direct bookings. “Stash levels the playing field for independent hotels by attracting frequent travelers,” Low says.

Independent hotels provide guests with a distinctive experience and sense of place, Low adds. While being affiliated with a soft brand or a chain can provide owners with guidance in running their properties, some hoteliers want to remain fiercely independent and free of any set standards. Given that chain affiliation can get expensive with marketing and loyalty fees, Low emphasizes the importance in the ability to stay independent if hoteliers so choose.

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