What is the meaning / definition of Independent Hotel in the hospitality industry?

An Independent Hotel is a hotel that is independently owned and run. It doesn’t allow any other proprietors to use its name / brand.

Basically, all of the hotels which are not related to a hotel chain are considered ‘independent’. They might sign up to so-called ‘voluntary chains’, meaning they remain independent but adhere to the standards and requirements of a bigger brand. That way they benefit from the marketing power of the big brand and it helps them to compete against the chains.
An example of a ‘chain’ of independent hotels is Best Western.

Travellers expect their chosen hotel to lean towards their wants and needs. A big advantage of independent hotels is that they have the flexibility to provide special and personalized services compared to corporately-owned and operated hotels, as the large chain brands have restrictive rules and protocols. An independent hotel can provide the guests with what they are looking for – to enhance their stay with unique memorable experiences that a large chain can not provide.

The benefits of a hotel being independent are:

  • Flexibility: It can react to the changes and requirements of the market quicker than a hotel belonging to a larger chain. The reactivity and power of decision limit monetary losses and boost management tasks.
  • Variable pricing policy allows quick and flexible decisions made in Yield and Revenue Management to adapt to the demand and the market behaviour and to increase the revenue.
  • Financial Autonomy, meaning it doesn’t have financial pressures from a chain group that requires a certain performance. It is yield by the independence of decisions on his capacities and abilities
  • Uniqueness! Every independent hotel has a different offer and also there are many types of independent hotels, such as Boutique, Luxury, Budget, Hostel, Design Hotel, etc. It can offer niche products and be targeted to a specific clientele. It offers a unique experience to the clients and therefore recognition value
  • Proximity to the client and a unique customer relationship (i.e. using social media)

On the other hand, a disadvantage is that it doesn’t have the support of a major affiliation (marketing support, negotiation power against travel agents and OTAs etc.)

To counter this, independent hotels can join a soft hotel brand or Independent Hotel Group, where they can take advantage of all the benefits offered by hotel franchises without being held back by all the restrictions imposed.

See also: