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Small hotels - fighting for survival
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 .
The advantages of the small independent hotelOn 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. In places where the big chains have seen lucrative openings, the future for small independent hotels may be hard, but even here it is not all bad news. Independent hotels - at least those that make the mark - have some things that the big brand chains cannot have (though some are trying to do so); notably the human touch, individuality, character and a local base.
Getting seen on the InternetAs for bringing in the customers, the Internet is now completely unavoidable. It is the no.1 market place for the vast majority of hotel bookings, whether direct or indirect; and even if the Internet is by no means a level playing field, and is now strongly biassed in favour of big hotel groups and online booking sites, it is not something that small independent hotels can choose to avoid, however much they might like to.
For most hotels, working with the big portals like Booking or Expedia is unavoidable: the commissions are an unpleasant fact of life that must be factored in, just as commissions to Travel Agencies, automobile clubs and other collective buying organisations used to be in the past. But it is still possible to do without the big portals for a part, even a large part, of one's bookings.
To minimise the level of commission paid out, small hotels must nowadays take bookings online through their own website, or by phone, or count on repeat visitors and a loyal customer base . Repeat visitors are the best visitors, but very rare are the hotels that can survive with just an existing loyal customer base . Most hotels need to make sure that they are discovered by fresh customers, and the best, and in cases only, way to ensure that these new customers come in directly, and not through an online booking portal, is to promote one's own hotel site directly on the Internet.
It is astonishing how many small hotels have completely failed to understand this, and imagine that once they have paid a whack of money to someone to build them a website, they can then sit back and relax, as people discover their website effortlessly through a search on Google. The truth of the matter is that this just will not happen.
In a few rare cases, of course, it will happen; if, for example, you have a hotel called the "Blue Duck Inn" in the village of Whooshingham, then yes, before long, anyone who searches for "Blue Duck Inn" will find your website immediately on Google, because yours is probably the only Blue Duck Inn in the whole wide world; and the same goes for a search on "Hotels in Whooshingham" where, after all the results from Google and Expedia and Hotels .com, your hotels website will probably show up. But that is of little comfort, as the only people searching for "Blue Duck Inn" will be people who know you already, and the people who search for Whooshingham will most probably click on the link to Booking or Expedia before they reach your website.
What you have done is to set up a website, but without learning how to use it. It's like buying a new car, without knowing how to drive. Until you drive it, the car will go nowhere. The same for a hotel's website. To bring in results, it needs to be promoted on the Internet, so that people find it – not just because they know your hotel or your village already, but because your website is there at the top of page 1 for other search results, or in other niche directories which are there.
This is known, among Internet professionals, as SEO, or search engine optimisation, and it is now a multi-million dollar industry in its own right. Big companies employ their own full-time SEO staff; small hotels cannot do this, but there are some things that they can do. The most important side of SEO is building up "good links" to their hotel's own website. These can come from the media, from local tourist offices, and by signing up to specialist directories such as Independent-hotels.info or Fairbooking websites (UK or France) , which will provide direct links to the hotel's own website. And it's not a matter of choosing one method or another; successful SEO is based on one simple principle : the more sites link in to your hotel's website, the better it will show up in Google search results. There is just one important caveat to this. Avoid links to your website from spammy "free-for-all" links sites; they count for nothing in SEO terms, and are unlikely to send any customers to your website.
There will always be a significant minority of travellers who will prefer a small hotel to a big one, a hotel with character and local style, in an older building, to a sequence of bland hotel bedrooms in which, when they wake up in the morning, they have first to wonder "Where am I now? Is this Detroit, Dublin, Durban or Dubai ?"
© Copyright ihi 2011-2016
By Andrew Ros
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