Deep Dive: Hotel Owners' Operating and Branding Strategies

Skift Take

The hospitality industry is evolving rapidly, with brands shifting to asset light and consolidating, soft brands and non-branded operators growing steadily, and the distribution landscape becoming increasingly competitive. Nevertheless, hotel owners stand to gain if they focus on acquiring and developing the right real estate, choosing the appropriate franchisors, managers, and partners, running their properties efficiently and effectively, remaining innovative and thoughtful, and maintaining that ever-needed hospitality factor.

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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.

Featured Quote

“The most important thing in our business is the quality of the real estate, the location of the real estate, and the hospitality factor ... Everything around it is noise, and owners can adjust.” – Shai Zelering, MD, Real Estate, Hospitality, Brookfield Property Partners

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

A Deep Dive Into Operating and Branding Strategies for Hotel Owners