In just the last few years, soft-branded hotels have gained significant traction in the lodging industry. Most of the major hotel companies have a soft brand, and now is truly the age of the independent hotel. However, Pamela Barnhill, president, COO, and founder of InnDependent Boutique Collection (IBC) and president and COO of InnSuites Hospitality Trust, has been a fan of unique properties long before they became trendy. The daughter of an independent hotelier, Barnhill has built a career out of spotlighting independent and boutique hotels with technology and collection tactics that drive RevPAR. With a viewpoint shaped by a lifetime in the independent hotel space, Barnhill has a lot to say about the soft brand segment.
What prompted you to found IBC?
Over the years at InnSuites, we’ve owned and managed independent, Holiday Inn, and Best Western hotels. From what I experienced, the independents had a significantly harder time driving both top-line growth and bottom line expenses. Unless they had a really good relationship with their vendors, it was very hard to get a good price on a good quality service or product. Because of my relationship with the vendors from the branded hotels, and because I managed and owned more than a few properties, they were willing to give me really good pricing that they weren’t offering to other independents.
While I was first experiencing the cost discrepancy in a vacuum, in 2011, I was asked to be on the board of the Independent Lodging Industry Association. When I joined the association, I found that other independent hoteliers have that same challenge. Bringing everyone together and creating a community where we can pool our knowledge and resources to drive RevPAR, or at least provide a level playing field for the independent hotelier to be able to compete, just seemed to be the right thing to do.
What are the top benefits of being an independent hotel?
We have way more flexibility in our independent properties than we do in our branded ones—and we can have a lot more fun running them. We’re able to cook creative, delicious, and in-season foods and serve fresh, nutritious fare at breakfast. We’re able to have more fun when choosing the amenities we have at the hotel and in the rooms. The paint colors can be more vibrant and whimsical. There’s just a lot more creative energy. Independent hoteliers like this freedom and embrace it. They like having their personality show in their properties. On the other end of the spectrum, the larger, institutional buyers typically prefer the easier, branded properties because they provide so many resources and enough regulations and restrictions that they’re easy to follow and execute.
Why have we seen a rise in soft brands?
With the rise of online/mobile booking, travelers can see the reviews and the pictures before they make any decisions regarding their hotel stay, whether it’s branded or independent. That transparency has allowed independents to gain a stronger foothold because they usually have some pretty interesting amenities, and their price is typically a little lower than the branded competition. So, given a choice between a branded property and a quirky independent, the consumer will probably choose the one that is a little cheaper, has more amenities, and offers more of an experience. Likewise, hotel owners are able to more easily obtain financing and are running the numbers and realizing they can accomplish higher profits due to the variety of services available today that historically weren’t available to independent hotels. The big brands are starting to realize this. Now, they also want to provide an experience, but realize that it’s hard to create that through tight regulation. They’re definitely trying to walk a fine line between their brand standards and creativity. And they’re trying to do that through a soft brand because they can’t necessarily loosen up hard brands’ standards because they’ve had an established business model for so long.
Speaking of online booking, how do online travel agencies (OTAs) impact independent hoteliers?
Independent hotels really need to receive their guests’ full information, and OTAs don’t necessarily do a good job sharing the data necessary to secure loyal, repeat customers. So as independent hoteliers, we need to think about how we drive that type of business. In my mind, some of the best ways to drive repeat business are retargeting and direct marketing from direct search and marketing on meta channels, which makes information like email and home addresses essential. It’s really important that hotels find channels that allow them to get that consumer close, instead of driving them further away.