On room numbers alone, the split is
similar. According to international hos- pitality research group MKG, of the 19.5 million estimated hotel rooms available worldwide last year, only some 7.85 million were in branded chains. MKG also found that 27 per cent of the 6.6 million hotel rooms across all of Europe – including the UK and Russia – are in branded chains, with the rest coming from independents.
INCREASING CHOICE Increasing the number of independent hotels under a chain umbrella should be good news for corporate travel buyers, who traditionally have focused on dealing with the branded chains, because it increases choice and locations for them. However, most independent hotels are just that – outside the chain system – and these offer good value, according to HRS’s West. He argues that the chain hotels’ drive for global growth means they incur higher marketing overheads than those for independent properties. “Independent hotels [in the HRS system] tend to be 15 per cent cheaper compared to chain hotels based on similar location, star rating, user
Increasing the number of independent hotels under a chain umbrella should be good news for corporate travel buyers
reviews and amenities,” he says. BBT re- cently reported on a deal that saw HRS add around 70,000 hotels to Travelport’s global distribution system, and HRS also has agreements with Sabre and Amadeus. Opportunities for independent hotels
to make inroads into the corporate market are also growing, he believes, as a result
DECLARING INDEPENDENCE
WHILE THE EMERGENCE OF SOFT BRANDS is really only a niche market for the global chains at present, they cannot expect to have it all their own way for long. Traditional hotel marketing consortia are also reinventing their game to take account of changing market conditions, from the emergence of the Millennials (aka Generation Y) to the way travellers are willing to embrace new mobile technology. These consortia – such as Leading Hotels of the World, Preferred Hotels, Small Luxury Hotels of the World, and Relais and Chateaux – provide marketing, distribution
28 BBT MAY/JUNE 2015
and branding services to their memberships of upmarket
independent hotels. Although leisure travellers are these consortia’s traditional base, they are also increasingly targeting business travellers and groups, especially for their MICE offerings. Relais and Chateaux, for example, recently launched a dedicated Unique Corporate Retreats programme for over 100 of its hotel members for discreet high-level board meetings and other small events aimed at senior executives. Best Western
International (BWI) is the hotel industry’s biggest consortium with more
than 4,000 mainly mid- market independent hotels around the world, including over 280 in the UK. It recently decided to fight back against the global brand chains encroaching on its territory by launching its own soft brand, called BW Premier Collection. The first to join earlier this year was the Hotel Master Johan, a renovated 68-room independent boutique hotel in Malmo, Sweden. BWI chief executive David Kong believes the new brand will help such upscale hotels to “reduce their reliance on online travel agencies and improve profitability while maintaining their independence”.
of user reviews becoming more relevant and trusted. “With improved availability of content online the buyer has more choice of hotels, which in turn leads to better adoption and compliance, as there is less leakage from the programme,” West says. But finding good independent hotels in the right location can be an issue for buyers. Jef Robinson is a global travel buyer at Citrix Systems. He says his prior- ity is to “leverage global and regional chain relationships wherever possible, so they are used where best suited to local offices”. But he points out that “many of our offices are situated in locations where there are no partner hotel chains in the immedi- ate vicinity to service our needs. In such circumstances, we make a judgment call on finding accommodation – prioritising quality of service, safety and convenience – as well as value, which means we do have a number of independents in our transient hotel programme”. A travel buyer for a leading company in
the European aviation sector also points out that the “existence of global contracts with the major chains will always include corporate deals, so that alone encourages us to use them over an independent”. The buyer also notes that “better adher- ence to our travel policy is helped by the chains’ reward programmes, which are very popular with our travellers, making it more unlikely for them to want to use reward-free independent hotels”. So not all travel buyers feel a need to
use independent hotels. Peter Macey is facilities and central purchasing officer for legal organisation the Medical and Dental Defence Union of Scotland (MDDUS). Macey says he uses chain properties in Glasgow, London and Manchester. He has direct arrangements with three key hotels in those cities or, if they are full, uses either MDDUS’s Premier Inn Busi- ness Account or goes through a hotel booking agency. “The key reason is that since our travel is based on specific loca- tions there is no compelling reason to seek out independent hotels,” he says. But it’s not just global hotel groups
wanting a piece of the action offered by independents. Retail giant Amazon recently launched a hotel-booking service, called Amazon Destinations, initially featuring around 150 properties in the US. It says its commissions will be “competitive” compared to other OTAs. This small but significant step could signal a game-changer for independents – and the wider hotel booking sector.
BUYINGBUSINESSTRAVEL.COM
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