Report Overview

Brands are consolidating, consumer preferences are changing, disruptors are impacting the distribution landscape, and technology is evolving. Hotel owners face an increasingly complex environment in which they must choose the single, best operating model and brand strategy for a given property. Easier said than done. In this report, we examine implications for hotel owners of the major brands increasingly shifting to asset light; the growth potential for non-branded operators and soft brands; how independents can succeed when catering to experiential-minded consumers with a focus on technology and data; and key items to think about when choosing a brand.

What we found through our analyses and interviews with owners, operators, managers, franchisors and other industry experts is that there may not be one best way to own a hotel. There is no “one size fits all” operating model, and decisions must be made on a property-by-property basis. Nevertheless, hotel owners can’t be idle, and should continue to be innovative, adaptable, thoughtful. They should also be willing to push back on their managers and franchisors to produce the best results. At the end of the day, the objectives remain the same: Acquire or develop strong real estate, ensure the property is run as effectively and efficiently as possible, choose the right partners, and never lose sight of that hospitality factor. This is a people business after all.

What You'll Learn From This Report

  • The advantages and disadvantages of different ownership operating models (independent, brand management, non-branded management, franchise)
  • Key considerations when entering into management and franchise agreements
  • How income statements differ among owners, managers, and franchisors
  • An overview of the hotel industry in terms of market shares of branded versus non-branded and managed versus franchised versus owned properties
  • Why the large brands have increasingly shifted to asset light and consolidated
  • The benefits of brand affiliation, including how loyalty programs and lower online travel agency (OTA) commissions can drive incremental revenue
  • How consolidation has negatively impacted hotel owners
  • The potential market opportunity for soft brands and non-branded operators
  • Keys to operating a successful independent property
  • How changes in the distribution landscape, from OTAs to Airbnb to Google, are influencing hotel owner decisions
  • Cost considerations for hotel owners in today’s environment
  • Skift Research’s proprietary ranking of seven major hotel brand chains based on 13 quantitative metrics to inform hotel owners’ decisions about brand affiliation
  • Skift Research’s expectations for distribution costs, growth of independent hotels, how contracts will evolve, and how the major brands are going to respond to industry trends

Executives Interviewed

  • William Fortier, SVP, Development, Americas, Hilton Hotels & Resorts
  • Kristian Gathright, COO, Apple Hospitality REIT
  • Amar Lalvani, CEO, Standard International, Bunkhouse Group, One Night
  • Raymond Martz, EVP & CFO, Pebblebrook Hotel Trust
  • Sara Masterson, VP, Hotel Management, The Olympia Companies
  • Chip Ohlsson, EVP & CDO, Wyndham Hotel Group
  • Victoria Richman, CFO & COO, HVS Hotel Management & HVS Asset Management - Newport
  • Ian Schrager, Founder & CEO, The Ian Schrager Company
  • Atish Shah, EVP & CFO, Xenia Hotels & Resorts
  • Julienne Smith, SVP, Real Estate and Development, Hyatt Hotels
  • Ted Teng, President & CEO, The Leading Hotels of the World
  • Shai Zelering, MD, Real Estate, Hospitality, Brookfield Property Partners