In the current operating climate, what does independence truly mean? The growth of OTAs, an increasingly globalised market, shrinking margins and the all-pervasive significance of scale have made it ever more difficult for hoteliers to go it fully alone.

In an effort to quickly expand portfolios through minimal investment, international operators spied significant opportunities within this landscape, launching new brands and initiatives that promised selected properties the ability to maintain a large degree of independence – minimal or zero branding, no standardised room sizes, a hands-off corporate approach form head office – while benefitting from being able to leverage global platforms and delivery systems.

Initially, the vast majority of this activity took place in the upmarket and luxury spheres, segments where individuality and personality are long-cherished values and the idea of cookie-cutter branding an anathema. However, this still left a huge amount of independent stock lower down the chain, properties that perhaps didn’t fit neatly within – or were unwilling to compromise for – the stringent brand standards employed by international operators.

Traditionally, there has been an acceptance within the industry that those looking towards the midscale segment prioritise consistency and reliability; “The best surprise is no surprise,” went the Holiday Inn slogan. This is changing. Locality, individuality and authenticity are now becoming key drivers at most tiers of the sector, amid a growing acceptance that a cookie-cutter approach lacks appeal for a new generation of guests who are enjoying an unprecedented range of hospitality options.

A change in circumstance has also reshaped the playing field for those independent hoteliers who value their freedom, but have been somewhat left behind by an increasingly scale and brand-dominated market. Buoyed by the success of upscale soft brands such as Hilton’s Curio Collection, and growing demand from owners and consumers for a slightly lower-end version of the same concept, soft branding is slowly infiltrating the three to four-star segment, offering hoteliers and travellers on a slightly less-than-luxury budget a blend of independence and reassurance that was hitherto out of reach.

Tapestry Collection, a Hilton brand targeting independent hoteliers in the upscale market segment, and Wyndham Hotel Group’s Trademark Hotel Collection, which was designed for ‘savvy and autonomous owners’ in the upper-midscale segment seeking independence on their terms, are cases in point. For both operators, the launch of a soft brand in the three to four-star price point was a no-brainer.

“We saw an opportunity to expand our portfolio while advocating for uppermidscale independent hoteliers with no existing soft brand options available to them,” says Philippe Bijaoui, chief development officer for Wyndham Hotel Group (EMEA). “Demand for soft brands has grown at a rate of nearly 20% in the past several years.”

The group already supports nearly 5,000 franchise owners across its portfolio and announced the launch of Trademark, its first soft brand, in June of last year. Incredibly, Trademark passed 100 properties at the end of November.

“This collection targets an untapped pool of hoteliers across the uppermidscale segment and above,” Bijoui says. “The traditional segmentation of our industry typically sees only luxury hoteliers maintain independence. Trademark goes beyond this to broaden and redefine the scope of a soft brand.”

It’s an opportunity Hilton has also identified, resulting in the launch of its 14th brand, Tapestry Collection, back in January.

“While numerous brands compete in the luxury and upper-upscale segments, Hilton’s extensive consumer feedback and competitive data analysis have revealed a white-space opportunity in the upscale market segment, especially for a collection brand,” explains Mark Nogal, global head of Curio Collection and Tapestry Collection, adding that the company’s proven experience of launching a successful collection brand – Curio Collection – gave the team confidence that it would be able to balance each hotel’s individual identity with the strength and reliability offered by Hilton and, as a consequence, drive “organic net unit growth”.

Brand-new strategy

The appeal of upper-midscale and upscale soft brands is clear from a consumer perspective. As Nogal explains: “These hotels cater to guests seeking reliability and value in their independent hotel choices. You’ll never see the same thing twice and every experience will be uncommon, backed by the reassurance of the Hilton name and award-winning Hilton Honors programme – providing guests the best of both worlds.”

It’s all part of the wider evolution of what constitutes a brand, according to Bjorn Hanson, a clinical professor at the NYU Jonathan M. Tisch Center for Hospitality and Tourism.

“A brand used to be absolute uniformity,” he says. “It didn’t matter if a hotel was in Oregon, Hawaii or New York City, the brand had a standard, and the furniture and the fabrics would all be identical, even down to the art on the wall.

“Holiday Inn’s old slogan used to be a positive, but it’s becoming a negative. More travellers are looking for something genuine and authentic, and that’s what these collections offer – the opposite of the old, rigid brand uniformity.”

The name Tapestry was chosen by Hilton because it is a ‘one of a kind’ element and the collection’s first property, Hotel Skyler Syracuse (named after its owner’s one-year-old grandson) fits the bill perfectly. First built in the 1920s to house the Temple Adath Yeshurun congregation, and later used as the home of the Salt City Center for the Performing Arts, the eco-conscious property opened in 2011.

Today, Syracuse’s first LEED Platinum Hotel features an eclectic mix of retro and contemporary decor across 58 unique rooms.

At the time of writing, Tapestry has 13 operating hotels in its portfolio and more than 40 in the pipeline, although, as with so many of these soft brands, those numbers are changing by the day.

“This model is a way for brands to get great ideas from developers and owners that have found ways to operate in their local market,” says Hanson. “Whether they are in design, marketing, operations or staffing, there are creative ideas that brands could incorporate into their systems or across collections. It’s kind of an intellectual capital in addition to the scale and inventory capital that’s gained.”

The economy of scale

For the likes of Hotel Skyler owner Norm Swanson, the draw to join a collection like Tapestry or Trademark is the fact that it can maintain its own independent spirit and identity – thanks to more flexible standards than a traditional brand – but also take advantage of the scale, global distribution and internationally recognised loyalty programmes that come with affiliating with one of the world’s largest hotel operators.

Trademark hoteliers, for example, will be able to gain access to a growing base of more than 52 million members who are part of the Wyndham Rewards loyalty programme; gain significant cross-selling opportunities, as Wyndham Hotel Group’s hotels are distributed through at least 10,000 affiliate partners and in global call centres handling more than nine million calls annually; take advantage of the group’s buying power with negotiated OTA rates, and a mixshift in reservations away from thirdparty intermediaries towards Wyndham Rewards and other direct channels, such as website and call centres; and rely on Wyndham’s experienced global sales, marketing and operational teams.

Hoteliers that opt to join Tapestry Collection gain access to more than 50 million Hilton Honors members and a global distribution network, and thanks to the soft brand’s flexible standards, only need to make minimal changes to their operations. Swanson, for example, had to increase the speed of the property’s wireless internet network, upgrade its 24-hour fitness centre and install a system that allows guests to unlock the door to their rooms with a smartphone app.

For Hanson, the biggest challenge of the model will be that owners of more traditional brands may start to want some of the flexibility they see offered in the collections.

“They may even start to resent the brands,” he says. “All of a sudden, if other brands at the same price level that they’re competing with, perhaps even affiliated with the same hotel company, are given the ability to make the decision not to comply with brand standards, the owner of the more traditional brand could feel very disadvantaged.”

Demand for soft brands has grown at a rate of nearly 20% in the past several years.
– Philippe Bijaoui

The team at Trademark is actively working with a number of individual owners and large developers all over the world, including owners of existing hotels, and exploring new construction opportunities in urban markets. The current portfolio includes properties in the US, Canada, Austria, Germany and Switzerland. With the global supply of independent properties in the upscale market estimated to be more than 15,000, the scope for significant, rapid expansion is enormous.

“While the first opportunities Hilton has identified are in the US, we will continue to carefully evaluate and expand the collection in additional markets that align strategically for the brand,” Nogal says.

The immediate focus of the company will be on growing the brand in distinctive markets.

“We’ve set a high bar to add historic, iconic or landmark hotels, which truly represent the individuality and personality the Trademark Hotel Collection stands for,” Bijaoui says.

The end of independents?

Hanson appreciates that it is only a matter of time before other groups follow suit. Deutsche Hospitality’s unveiling of MAXX by Steigenberger, earlier this year, is a case in point, and IHG expects to open more than 200 upscale voco hotels over the next ten years.

“This is an evolving trend that will continue and expand in the worldwide lodging industry,” he says. “There are so many mid-priced hotels, whether they’re boutique or lifestyle, that don’t meet the traditional brand standards of a 14×27ft room, or might have different public space configurations.

“For brands to grow, they have to accept hotels that might not have qualified under old brand standards.”

One can see the benefits for operators, but, with the trend still in its infancy, it remains to be seen whether hoteliers who are used to complete independence remain fully on board. It may not be that the meaning of independence is changing, more that, for owners wanting to maximise exposure and turnover, it could soon cease to exist altogether.