21 Oct Small Hotels Are Getting Swallowed Up by Big Chains
Still, she said, itâs getting more challenging to operate as an independent hotel. âThe major brands can approach corporate clients with a large portfolio and a range of prices,â she said. âThatâs stiff competition.â The Sorrento also competes with a growing number of Airbnb offerings and other short-term rentals.
Patty Baird, who owns the independent Cedar House Sports Hotel in Lake Tahoe, Calif., with her husband, focuses on creating a sense of place at the hotel, including photography retreats, cooking classes using local ingredients and a dog-friendly itinerary on the hotel website. A recent outing to a local food hub and brewery gave visitors. âa sense of our town and its spirit,â she said.
Independent hotels can face higher costs than large chains when working with online travel agencies like Expedia and the Priceline Group. Hotels generally pay a 15 to 30 percent commission when a traveler uses the online booking agency to reserve a room. But larger companies like Marriott use their market power to negotiate lower booking rates. Independent hotels also rely more on online travel agents to book their hotel guests than the big brands.
Independent hotels also face competition from online booking agenciesâ sites. The agencies will sometimes buy key words, including the name of independent hotels, to advertise on Google and steer travelers to their sites rather than to the independent hotelâs site. Ranked first in a recent search for Cedarbrook Lodge, outside of Seattle, were advertisements from two Expedia brands, meaning that those brands had essentially outbid Cedarbrook Lodge for its own name on Google. This practice can translate to reservations that are less lucrative for the independent hotels.
For its part, Expedia says buying those key words can help independent hotels because its research shows that search experiences that associate hotels with an Expedia family brand name give those hotels more credibility and customers are more likely to book them.
Jolene DiSalvo, senior vice president of Columbia Hospitality, which manages the Cedarbrook Lodge, said that while the hotel appreciated the wider audience exposure provided by online travel agencies, the goal is always to âdrive direct bookings to our websites,â both for the extra revenue and more important, she said, to own the customer experience from the start.
Extreme weather has been especially hard on independent hotels because they donât have the resources of a major chain to rebuild. According to the research company STR, 1,000 independently owned and operated hotels closed in areas along the Gulf of Mexico and the Atlantic from 2003 to 2007. Those were the years that nearly 40 hurricanes, including Katrina, came through the areas.