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Small INDEPENDENT HOTEL DIRECTORY - 2012

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Small hotels - fighting for survival

A generation ago, a very large proportion of the hotel market in Europe consisted of small independent establishments; but even then, these hotels, with their their character and their individuality, were declining in number.
     Today, the situation for small independent hotels is harder than ever before; their numbers continue to decline from year to year, and the number of new small independent hotels being opened up each year is far less than the number of old small independent hotels that close down or go out of business.
     In France in 2008, according to the French national statistical office INSEE, completely independent hotels (i.e. hotels that do not even belong to a grouping of independents such as Logis de France) still accounted for 45% of the hotel rooms available in France; but this figure must be put in perspective. Ten years earlier, independent hotels accounted for 56% of hotel rooms in France. And if anything, the decline in independence is accelerating.
     As for Spain, since 2010, this country has become a major new development area for some of the world's large hotel chains, including  Holiday Inn, Accor and Marriott, who are moving in to take advantage of the downturn in the Spanish economy. In January 2011, the American Marriott group announced a new Spanish joint venture with Spain's AC hotels, designed to open up 400 new hotels in Spain in the coming ten years. All this is bad news for Spain's independent hotels, especially in the upper segments of the market. (For more details see the Spanish hotel market.)
     Throughout Europe, as already in north America, it is harder and harder for small hotels to remain completely independent, unless they benefit from prime locations where they can rely on business simply by offering a service that people want in a place they want, and a price they can afford. But even small hotels in prime town centre locations can find themselves forced out of business if a well established chain hotel sets up close by, or if too many chain hotels, such as Première Classe or Travelodge, set up in conveniently accessible locations outside town, draining car-mobile customers out from establishments in less accessible central locations.
     The rapid development of the Internet has revolutionised the travel industry from top to bottom, but on balance it has helped the large hotel groups more than independent establishments. With their great financial power, large hotel groups with established brand names have been able to use the Internet to maximum advantage in their international expansion; American tourists can now see, with the click of a mouse, that there are chains like Holiday Inn or Marriott ready to provide a familiar environment for them  worldwide, and European tourists can see, from their desktop or laptop, that familiar names like Ibis and Novotel, parts of the Accor group, can welcome them in many parts of the continent and beyond. Small independent hotels could never compete with hotel chains in terms of advertising and brand awareness; in this respect, the Internet - which some initially hoped would help to level the playing field - has generally put them at a disadvantage, as large numbers of tourists and holidaymakers go for the familiar names, on the assumption (sometimes the presumption) that the service provided will match their expectations.

     Nevertheless, it has not all been bad news for small independent hotels; the Internet - witness this website - has also become a means of communications through which small independent hotels can make their existence known to a wider audience. To try and combat the large groups on similar terms, many independent hotels, notably larger and more expensive ones,  have joined forces in groupings known as "referral chains" or "voluntary chains", such as  Inns of Tradition in the UK or Logis de France in France. These can benefit, like the big chains, from a recognised brand name and national and international advertising in different media, including the Internet. But given the strong presence of big hotel groups on the Internet, and their deep pockets when it comes to Internet advertising,  independent hotels  will always find it hard to compete,  even when they pool their resources .
     On the other hand, there will always be room for small independent hotels in certain situations,  since in some cases small independent hotels fill a role that is complementary to that of the large chain hotels, and a market niche that the large hotel groups are not too interested in. Ultimately, large chain hotels have one principal purpose, and that is to make money for their shareholders. Many small hotels exist  for a quite different reason: to provide at least some sort of a living for a family or a husband-and-wife team or local inhabitants who want to remain living locally. The large chains are reluctant to invest in new establishments in places where they are unlikely to achieve very high occupancy rates for a good part of the year, if not year-round – unless of course they can achieve profitability by charging very high rates for a part of the year only, as in Alpine resorts,  They need volume, and a certain minimum level of occupancy for at least ten months of the year, or else they find themselves with high running costs and little income. Small independent hotels have considerably more flexibility, and have less to lose by shutting themselves down, or shutting up part of the hotel, during the slack months. With only the owners and perhaps a few seasonal employees to pay, and no boardrooms, CEOs, shareholders and large central administrative offices to run and finance, small independent hotels can survive and provide a vital local service in places where the chains fear to tread.

    There will always be  places where small independent hotels will survive, because they are the only ones who can survive in certain places, particularly rural areas; but in places where the big chains have seen lucrative openings, the future for small independent hotels will be hard.

See also: Small hotels and OTAs (booking portals) : are they necessary?

© Independent-hotels.info 2011


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