Is Luxury better in branded or independent hotels?

Some considerations following a panel at the Luxury Conference in Milan.

Hotel Passalacqua (Como), named Best Hotel in the World by The World’s 50 Best Hotels

On 28th of September I had the pleasure of attending the Luxury Hospitality Conference at the Melià hotel in Milan. It was a first for Italy and the conference room was packed. Well done to Teamwork (the organizers) and specifically to Mauro Santinato!

I was particularly attracted by one of the panels with some great professionals like Christophe Mercier (General Manager, Vretreats Ca’ di Dio, Venice), Daniela Cataldo (Experienced Leader in the Luxury Hospitality, the Rome Edition), Guido Fiorentino (President and CEO, Grand Hotel Excelsior Vittoria, Sorrento), Mariella Avino (Managing Director at Palazzo Avino, Ravello) and Alessandro Misani (Director of Operations Milan, Melià Hotels International), discussing how (if) the approach to luxury has changed and if there is difference between a branded and non-branded (independent) hotels.

The topic really does passionate me having worked for longer than 15 years at IHG also covering roles close to development and deeply linked to show the value of an international brand to the franchised community (with owners who decided to invest in a brand), and more recently dealing with independent hotels and small group of hotels in the luxury segment.

Let me briefly summarize what has been discussed and unanimously agreed:

  • the concept of luxury has changed over time (think about the “quiet luxury”, or the focus on the “experience” rather than the product itself),
  • what really makes the difference is the obsession of putting the guest at the center of everything
  • GM is expected to consider the hotel where he operates as his/her own home.
  • giving a genuine, authentic sense of attention and service to the guests is fundamental.

Ok, the last three points should apply to all GMs, regardless of the segment where they operate (from budget to luxury) however it was highlighted that expectations in the luxury segment are extremely high hence spotless service is a must.

Assuming that all points above are provided, does a GM in a highly recognized luxury brand hotel have more advantages than her/his counterpart operating in a small luxury boutique hotel? What are the key differences between the two operating models?

Here some facts to consider:

  • Readers’ awards in the Luxury hotel segment by global authorities like Condè Nast Traveler, Forbes, Travel + Leisure, The World’s 50 Best Hotels, show many independent hotels in the top positions.
  • Technology and distribution (once THE reason to be part of the brand) are much more affordable for independent hotels than ever before.
  • The complexity of the distribution landscape might make it difficult to surf for an independent hotel.
  • Affiliation costs increase year over year and so do distribution and costs of acquisition.
  • “Soft branding” might offer a good compromise.
  • A lot might still depend on the location of the property, on the ownership and overall financial objectives.
  • If you choose to brand your hotel, do your homework, and focus on which brand(s) could fit the best to the property, to your financial objectives and long-term strategy.
  • Make sure you build your “own” brand to differentiate yourself from the (branded) competition.

There are many pros and cons in branding or staying independent; here an attempt to visualize it through a short SWOT analysis:

The topic is complex, and this short article does not want to be exhaustive.

There is space for branded and independent hotels worldwide and both have pros and cons.

It is good to remember that every hotel has the chance to create its own brand, regardless its operating model… Branding is also a question of positioning and is key for success in any industry, and hospitality is no exception.

As Steve Forbes once said: “Your brand is the single most important investment you can make in your business”.