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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