Big brands within the hotel industry are focusing more on offering the boutique lifestyle that offers customers unique settings and experiences. A report by TripAdvisor shows an increase in over 19% of soft-brand collection hotels in the past decade. This report also indicates that boutique hotels performed better than other hotel sectors within the last two years and generated more revenue. This shows that good hotel management in boutique style hotels and big brand affiliation offers numerous benefits to soft brand hotels.
What are Soft Brand Hotels?
“Soft brand is a term used in the hotel industry that may mirror a hotel franchise but retain its own identity and management style.” says Dinesh “Dan” Rama, NewGen Advisory’s Co-Founder and Principal Broker. “The benefit of a soft brand is that the hotel chain provides all its resources and platforms without the strict enforcement of a particular brand or brand identification.”
Suraj Bhakta, NewGen Advisory’s Chief Executive Officer, explains further, “a soft brand hotel is a hotel that is associated with a franchisor that creates a set of soft regulations and guidelines that often allow the hotel to maintain a theme or create a distinctive vibe that allows for flexibility in the interior design and exterior appearance.”
However, hotels need to meet the core brand standards such as safety and cleanness expected by the brand network. Soft brand hotels also benefit from marketing and reservations from the affiliated big brand. This model is helpful to hotel owners who want to benefit from technology systems, brand loyalty, and other resources while remaining independent.
Examples of Soft Brand Hotels
Soft brand hotels typically cover the higher end of the market. A few examples of soft-band hotels include Marriott’s Autograph Collection, Hilton’s Curio Collection as well as IHG’s Voco Hotel Brand. These independent hotels receive support from larger brands; however, they often retain their individual branding.
How Soft Brand Hotels Make Profits
The standard segments, services and products for soft brand hotels are more unique than the traditional hotel setting. Soft brand hotels offer more sophisticated, personalized, tech-savvy and attention to detail products and services to customers. Here are some of the most profitable ways soft brand hotels generate revenue.
Premium and Exclusive Room Service
Room service is probably one of the highest profit-generating services within the hotel industry. The room service charges are generally high, giving high profits to soft brand hotels. Prices vary based on the type of hotel, location, experience offered to the guests, type of room, hotel reputation, state of the economy, and the amenities provided.
Travelers are willing to pay more for rooms and room service at a soft brand hotel rather than a big brand because according to HotelManagement.com, “guests are willing to pay more for the experience they get at a boutique hotel, which is a leading reason why these properties have become a force to be reckoned with within the industry.” The reason for this is because of the employees who run the hotel. When employees with an entrepreneurial spirit are running the hotel and providing their guests with personalized service and an expectational experience, soft-brand and boutique hotels stand out amongst their competitors.
Unique and Sophisticated Lobby Bar Services
Lobby bar services have been stable for many years for hotel revenue. Hotels that stock their bars with alcoholic beverages and sugary snacks benefit the most since customers have options to choose what they want.
Soft brand hotels tends to offer unique and signature cocktails that are social media worthy for the new traveler. The cocktails are a great way hotels reel in new customers and make more profits. Bars in soft brand hotels have unconventional and delicious cocktails full of incredible ingredients. The extensive cocktail menu creates an excellent opportunity for hotels to increase the cost per serving and make more money.
Personalized Spa and Pool Services
Soft-brand hotels are now offering personalized spa and pool services, providing customers with a well-rounded experience while generating profits. Guests get a relaxing experience without leaving the hotel premises.
Personalized spas and pools also attract the local community due to the appealing nature of the uniqueness the independent, soft-brand hotels provide guests with. So, besides generating revenue from guests seeking accommodation, hotels also make additional profits from local customers.
Hotel Parking Service with Enhanced Technology
Most soft brand hotels no longer offer free parking like in the traditional setting. Many are charging for parking on their premises, which is why hotels are generating extra income. Customers arriving at the premises have no other option than to pay for parking. On the other hand, parking can also be difficult for guests if hotels are busy, but with the help of enhanced technology, both the hotels and their guests can have an easier time getting settled.
The smart parking technology creates a seamless parking experience for hotels of all brands and their customers. With the use of smart sensors and applications, hotels now can allow their guests to reserve parking spots prior to their visit as well as have their space assigned to them upon their arrival. With this new technology, hotels are generating extra income while simultaneously keeping their guest content.
Exclusive Membership Services
Hotels with registered members make more money due to the commitment from the customers. A hotel could offer a monthly gym membership to locals. Some hotels rent our spaces to groups or gatherings for meetings or local events. This is another way that hotels generate quick revenue if they have enough space for their guests. Some hotels also fit their rooms with the latest technology and rent them out to locals who do not want to work from their offices.
The Bottom Line
Affiliation with a big brand can be beneficial to soft brand hotels. The hotel should focus on understanding and engaging in essential marketing tactics to remain relevant in today’s highly competitive world.
Want to learn more about how an affiliation with a big brand benefits the soft brand hotels and how this benefits you as an owner in the long run financially? Contact NewGen Advisory for a free consultation.