Definition
An independent hotel is, at its most basic level simply one which is not franchised nor affiliated with a member organization. Independent hotels dot the landscape from coast to coast, varying widely in terms of size, quality, condition, cost, and amenities. Some rival or exceed the most upscale urban branded properties. Some offer unique experiences in exceptional locations like National Parks or other attractive scenic destinations. Others are more simple roadside motels catering to families and travelers.
Independent properties cross over with a variety of investment styles. A property may be independent and a boutique hotel, a lifestyle hotel, a lodge, roadside motels. Bed and Breakfast/Inn properties tend to be exclusively independent. An independent may offer Food & Beverage (F&B) service or Limited-Service (like coffee in the lobby). The key defining factor of an independent hotel is simply that the owner is the first and last word on all decisions made about the property.
Overview
Dramatic changes in the industry as a whole have disproportionally affected independent hotels, which have neither the economies of scale nor the deep pockets of the national chain brands. Independent owners must adapt individually to compete in the emerging areas of social media, online travel agents, hotel review sites, internet presence, and changing consumer expectations.
Independent hotels offer much greater flexibility in setting rates and deciding on capital improvements and expense allocations for an owner. These properties may be suited for absentee ownership with professional management, provided they offer a sufficient number of rooms to support the added management expense. Independent hotels also tend toward higher risk – much is dependent upon the marketing, website, and customer relations they cultivate, and income year over year can be more volatile.
Investor Style
Owner/operators, especially those with some business or hospitality-specific experience, often do well with independent hotels. Individual owners can create a property that is reflective of their own personality or caters to a specific community or lifestyle. In some cases, these properties may be suited for professional management. Many properties which are ideal for investors just starting their hospitality portfolio fall into this category, as pricing is generally lower than comparable franchised properties.