Preferred Hotels & Resorts has been in the independent hotel collection market for half a century. Currently, the company’s upper-upscale and luxury portfolio encompasses five collections—Legend, LVX, Lifestyle, Connect, and Preferred Residences. Today, these five collections are facing a wealth of new competition from soft brands, which have been entering the hotel market at a rapid-fire pace. LODGING caught up with Preferred’s president and CEO, Lindsey Ueberroth, to get her perspective on this growing segment of the industry and why the independent hotel scene is more attractive to today’s travelers than ever before. Here’s what she had to say.
You’ve been in the independent hotel collection business for a long time. Why do you think the big hotel companies have been so eager to enter this space over the last few years?
I think there are a few reasons. The first is related to the internet and how it’s made it easier for travelers to preview a hotel before staying there. Before that was possible, there was a comfort in the consistency that the chains provided while you were traveling—especially internationally. That paradigm has been completely turned on its head. Travelers now have more information about a hotel than they ever had before. Reviews, photos, and social media all give them a comfort with a property that was previously unachievable. And travelers love it.
The second is that travelers are looking to stay in hotels that reflect their travel aspirations and personalities, not cookie-cutter properties. We like to call them independent-minded hotel travelers. I don’t think most people look at themselves as cookie-cutter people. This element is driving a lot of growth around soft brands.
Additionally, from a major chain perspective, it’s an opportunity to add another brand and expand their options. Individual brands can hit a saturation point. When that happens, that company’s best option is to add another brand that expands their reach into previously saturated marketplaces. They can then approach developers and owners with something they couldn’t offer with any of their other flags.
How is Preferred coping with the new soft branded competition entering the market?
Well, first let me mention that we’re not losing a lot of hotels from our portfolio to these new soft brands. However, there is a lot more competition for development right now than we have ever experienced before. In the fairly recent past, independent properties were not really a viable investment for a lot of hoteliers. Now, with the exposure these properties are getting from the big hotel chains, independent properties are in the limelight. We just have to share that limelight with more people than in the past.
A lot of the soft brands launching today are targeting the stay experience toward millennials, but Preferred has been in the independent space for 50 years. Is the demand for independent hotel stays transcending demographics?
If you look at the new soft brands that have popped up, they’re mostly in the upscale, upper-upscale market segment. Additionally, several of them were launched specifically to capture the millennial market. I think one of the reasons we’ve had so much success and continue to grow is our portfolio goes from upper-upscale all the way up to ultra-luxury. The breadth of our portfolio allows travelers to stay with us for a variety of reasons—business, family vacation, special event, or even just “I want to stay in an ultra-luxurious hotel.”
Additionally, new research has been showing that millennials don’t want brands to cater directly to them. They even find it somewhat offensive. There’s a real independent streak there, and a feeling of “Don’t tell me what I like.”
Preferred has very broad shoulders as a brand, which allows us to cater to millennials, GenX, and Baby Boomers equally well. And those demographics like variety. It makes our portfolio fun.
Is there a single commonality that ties all of Preferred’s properties together?
No, and that’s the beautiful part! [laughs] Actually, staying in our hotels is meant to be an experience and allows our guests to really enjoy their destination. Achieving that goal requires a combination of an actual physical product as well as service. Our team members make each stay incredibly special, and that is consistent across our portfolio.
How do you market an experience to potential guests?
You have to know how to point potential travelers toward the authentic—and I know that word is overused these days—experiences that your guests are already experiencing. For the last two years, we’ve been using social media extensively to show what our properties are all about. In that period of time, we’ve had more than 20,000 people engage with it. Through social media, we’ve been able to create a strong community around the Preferred Hotels & Resorts brand that is specifically focused on the experience that our hotels provide. We
have a robust social media presence, but we also encourage guests to use a hashtag, #ThePreferredLife, to find our properties more easily online. It’s only common sense to use social media this way because travelers are using social media more and more as a travel planning tool. When they see that hashtag, we want them to say, “That looks beautiful. I want to go there.”
How can you make sure your social media attracts the most eyes?
Well, if you look at our Instagram, for example, you don’t see a lot of the traditional hotel rooms. It’s activities and excursions, like people skydiving over the Palm Islands in Dubai. We’re really trying to encapsulate the idea the hotel is an important piece of the stay, but we want to celebrate the overall Preferred life and the experiences it brings to our guests. We look at our hotels as an extension of that experience, which really elevates them beyond the physical hotel room. We want our guests to be thinking about all the wonderful things they’ll be doing with their time, not just where they’ll be sleeping each night.
Do you think the independent segment of the hotel market will continue to grow?
Hoteliers love being 100 percent independent and really enjoy the creativity that affords them with their property. In that respect, I completely expect this market to continue to grow over the coming years. Additionally, I embrace the added competition, which both keeps us on our toes and indicates that soft brands and hotel collections aren’t going anywhere soon. The demand keeps growing, and markets all over the globe are really embracing independent properties in a way they never have before.
From a personal standpoint, I get so much inspiration and so many ideas from our more than 600 hoteliers, and being able to celebrate that individuality across our portfolio is simply amazing.
