How Independent Hoteliers Compete With Large Chains

These giants of the hospitality industry benefit from a wealth of resources that are often out of reach for the individual independent hotelier.

The good news is that the rise of affordable and easy-to-use cloud-based software, – which utilizes real-time data sets to provide immediate, actionable insights – presents a real opportunity to level the playing field with larger hotel chains.

Why independent hoteliers struggle to compete

Independent hotels struggle to compete with large hotel chains for many reasons, but several key factors are: strong customer loyalty programs that encourage returning guests, deeper pockets for tech investments, an established and trusted brand and lower operating costs due to economies of scale.

Although these are certainly assets that large hotel chains use, they also can represent vulnerabilities.

For example, independent properties can be more nimble in service recovery situations, have more aggressive sustainability initiatives, or can also more quickly vet new vendors and find the right tech stack, rather than getting stuck in long-term contracts with a brand-mandated partner.

If fighting the battle against major groups and chains feels impossible as an independent hotelier, remember that what makes large chains so formidable can also sometimes be a weakness that you can capitalize on.

How independent hoteliers can compete with large chains

Chances are that you are running a very lean staff, and you only employ the minimum headcount required to offer excellent service. This means that the employees you do manage are stretched thin, and managing multiple roles.

How can this be spun into an advantage? A lean staff means that you stand more to gain by implementing automation.

Automation, especially when combined with AI can transform what were labor-intensive tasks into seamless workflows requiring only the lightest of touches.

By using intuitive software designed specifically for independent hoteliers you will see a number of key benefits:

Automating time-consuming tasks streamlines your day-to-day operations and removes human error, leading to improved efficiency and cost reduction.

Demanding, manual tasks like refreshing rate shops or sending confirmation emails can be eliminated from your workload. This means you can focus on better serving your guests along with other high-value activities.

Accurate and actionable data at your disposal enables you to make better commercial decisions to increase your hotel revenue.

Modernize hotel operations with a PMS

Running a hotel is made up of almost countless responsibilities: from supervising reservations and orchestrating check-in and check-out procedures, to tracking room availability, managing guest communications and synchronizing housekeeping duties. And that's just scratching the surface.

Traditional ways of handling these tasks, although functional, are often time-consuming and inefficient. Hospitality technology exists in the form of a Property Management System (PMS) which can optimize your hotel’s operations.

A cloud-based PMS serves as the central nervous system of hotel operations. It offers a granular view of both front and back office activities and automates operational tasks across functions such as housekeeping, reservations and payments.

It not only bolsters operational efficiency and flexibility but also enriches the guest experience by giving you quick access to personalized guest data and freeing up your time to act upon it.

Because a PMS acts as the operational nucleus of your hotel, allows you to connect with a variety of other tools and systems, making it easy to access and integrate relevant data. One example is setting up a direct connection between your PMS and an invoicing system. The PMS can send key data to the invoicing platform regularly, which makes paying vendors and collecting payments much easier.

Additionally, when your PMS is connected with solutions such as a channel manager and a pricing recommendation tool, you expand functionality, drive efficiency and achieve better business results.

While a PMS might not be the panacea for all operational challenges, you can’t reasonably expect to challenge and outperform your large chain competitors without a PMS. If you aren’t currently utilizing a PMS, take the dive and invest in one now.

Automate dynamic pricing for a competitive edge

As an independent hotelier, when you see the words “revenue management”, or “dynamic pricing”, you may think to yourself, "That's too complex to get a handle on when I've got what feels like a million tasks to complete."

The truth is that if you’re looking to go head-to-head with large hotel brands and major chain hotels, this is another aspect you can’t ignore.

Many independent hoteliers rely on tedious, time consuming rate changes - perhaps spending a few hours at the start of the month updating weekday / weekend prices for all of their various room types within their PMS, or channel manager, and then forgetting all about rate strategy until the next month rolls around. This type of pricing strategy has serious pitfalls.

If you aren’t utilizing a dynamic pricing solution, you aren’t able to react to market conditions as quickly as your large-chain competitors. This leads to suboptimal pricing outcomes and lost revenues.

By utilizing an automated solution fed by high quality data from your PMS, you can update prices in real time based on a variety of market factors and price optimally 24/7, meaning higher ADR and Occupancy.

Thankfully, there are now tech solutions engineered for independent hoteliers, offering you the ability to dip your toe into the pool of revenue management and still reap the rewards typically seen with a much deeper immersion in this commercial strategy.

Using a tool such as Lighthouse’s Pricing Manager can lead to substantial improvements in business performance that mean you can catch up on your big chain rivals. Here’s how:

Time-saving: Automated pricing recommendations spare you from manual research and analysis

Preventing revenue slippage: Automated room pricing strategies reduce the risk of manual inaccuracies and human errors

Boosting profitability: Real-time price adjustments based on forecasts and competitor data allow you to capitalize on every revenue opportunity, regardless of demand fluctuations.

Competitive edge: Quick and informed responses to demand and competitor pricing ensure you stay competitive, possibly attracting more bookings if you offer better value at similar prices.

Occupancy maximization: Price optimization effectively manages occupancy levels, preventing overbooking during peak seasons and attracting more guests during off-peak times.

Competitive pricing 24/7 means that you have the same advantages that the large chains have; You’ll never miss out on revenue and you can fully automate your pricing strategy. Alternatively, you can utilize an automated pricing system to find an ideal balance between full-automation and hands-on guidance by setting customizable rules, alerts, and limits.

Optimize distribution with a channel manager

Another area where large chains have a major advantage is distribution. In the past, independent hoteliers may have been able to get by with one reliable Online Travel Agency and a website. Now, maximizing online presence across multiple channels, and yielding them appropriately during times of fluctuating demand is key to keeping up with your chain-hotel competitors.

Rather than painstakingly managing inventory by hand, a major quality-of-life improvement you can make relatively quickly is building on your burgeoning tech stack by adding a channel manager.

Why utilize a channel manager? If you’re like most indy hoteliers, you want to increase direct bookings via your website to avoid commission, but also maintain maximum visibility across third party channels to attract bookings on Online Travel Agencies (OTAs) like Booking.com and Agoda. It takes a lot of thought and effort to get right.

A hotel channel manager streamlines the process of marketing, managing, and selling your hotel rooms across third-party platforms and your own website. This means no more manual work. Instead you get real-time pricing and inventory updates without lifting a finger.

A tool like Lighthouse’s Channel Manager centralizes and automates your distribution across multiple channels, effortlessly updating pricing, promotions, and syncing of availability in real-time.

You don’t miss out on any revenue opportunities and with connections to over 200 channels you maximize visibility to reach the audience most likely to book your property.

Best of all, when paired with Pricing Manager, price recommendations based on real-time market demand and competitor rate data are automatically sent to all of your connected channels. This ensures your room pricing is always fully optimized, no matter which website it’s on.

This synchronization prevents overbooking by maintaining accurate inventory counts, drives your business performance and fast-tracks your revenue management game, so you can challenge big industry players.

Leverage data to deliver personalized guest experiences

Travelers are increasingly expecting hotels to cater to their individual needs, a trend that has increased greatly due to the influence of social media, and an increased accessibility to luxury travel experiences. In this regard, independent hotels hold a distinctive edge over their larger counterparts. You can provide personalized and authentic experiences for your guests, from the start of their booking journey to the front desk.

In contrast to cookie-cutter strategies often employed by larger hotel chains, you have the opportunity to be nimble in your approach and leverage data through technology to deliver services that truly resonate with each guest's unique preferences.

One way independent and boutique hotels can rise to this challenge is by integrating a PMS with Customer Relationship Management (CRM) software. This combination enables you to track and analyze details such as guest preferences, booking histories and requests.

With this wealth of data available, you can craft unique experiences tailored to the individual, from upgrades and room service, to the type of room they prefer. The level of personalization you are able to deliver can go a long way to increase guest satisfaction, foster loyalty and repeat business.

This marriage of data with a personal touch gives rise to a proactive service culture that can truly set you apart from large chains.

Establish a competitive advantage with data-driven insights

Data is an invaluable commodity for independent hoteliers aiming to compete with larger chains. Thankfully, tools are now available that were previously only attainable by big brands with deep pockets.

By analyzing both internal and market data from the right sources, and assembling the right tech stack, you can implement strategies and develop a robust commercial strategy just like a large chain, but without the red tape.

Lighthouse provides the most comprehensive, complete and reliable data in the travel and hospitality industry. Lighthouse’s comprehensive independent hotel platform allows you to price more competitively, simplify channel management, and drive more direct bookings - all ways independent hoteliers are catching up with their large chain competitors.

Safe in the knowledge your pricing and distribution strategies are automated to your requirements, your time is freed up to hone your competitive advantage over larger chains - providing a one-of-a-kind guest experience.