Big hotel brands are often ideally positioned to capture traffic and improve customer service options. They have larger budgets for marketing, guest support, and more. As a result, many smaller, independent hotels are considering moving under the umbrella of those larger corporations, providing them with the support they need to stay afloat.
Is converting your hotel to a bigger brand worth it? Ultimately, it may depend on your specific needs, your position in the industry, and more.
Potential Benefits of Converting Your Hotel to a Bigger Brand
When considering converting your hotel, there are several obvious benefits that come to mind.
Increased Budget for Marketing
Often, the increased marketing budget is the first thing that comes to mind when you’re thinking about making the leap to a bigger brand for your hotel. After all, with a larger marketing budget, your hotel is more visible–and that means you’re better able to connect with guests who are interested in visiting your area.
Brand Recognition
Brand recognition is often a critical part of travelers’ decisions. When travelers recognize a brand, they’re more likely to trust it. If they’ve had a great experience with a hotel of your new brand before–even if it was across the world from your current location–they’re more likely to make the decision to check into yours.
Access to Advice and Support
Converting to a big hotel brand also means accessing the brand’s managerial team. In many cases, that can mean increased advice and support for your hotel, which may allow you to increase profits and better support your guests’ needs.
Factors Hotel Owners Consider When Choosing a New Brand
While rebranding a hotel can offer significant advantages, before making the leap, there are several things hotel owners should keep in mind.
What are Your Guests Looking For?
Ultimately, your guests’ expectations are one of the most critical elements to take into account when deciding whether you want to convert to a big brand. Are your guests looking for a standard hotel experience, or do they come to your hotel because you have something that sets you apart? Keep in mind that many big hotel brands offer a somewhat generic experience that may not fit within your customers’ expectations–which means that you may no longer be providing what they’re looking for when they come to stay with you.
What Does the Market Look Like?
As part of your strategy for growing your hotel brand, take a close look at the travel market, not just globally, but for your local area. In some areas, travel is expected to continue to increase throughout the next couple of years. However, you must also consider your specific destination, what type of growth your area has seen lately, and other hotels in the area–and where yours fits into the market. Before you convert to one of the big brands, consider how that will work with the local market and your overall expectations.
Don’t just look at the current market demand, either. Take a close look at trends in the hotel industry, whether you’re considering eco-friendly and sustainable travel requirements or increased technology and convenience options for hotel guests.
What Will the Conversion Offer?
Converting your hotel to one of the big brands often means taking on considerable renovations. Sometimes, that means major improvements to your property–and converting to a big brand means you have access to the budget and support you will need to take care of those renovations quickly. On the other hand, if your hotel is already in great shape, a renovation could mean unnecessary costs and, ultimately, dissatisfied customers due to your hotel being shut down at an inconvenient time.
Which Brand Fits Your Vision and Needs?
Before you make the jump to a new hotel brand, carefully consider whether the brand you’re evaluating fits your vision and needs. Converting to a new hotel brand takes control of your financial future out of your hands and may leave you with some unexpected changes to your business model and daily processes. Make sure, before you sign on, that you know what’s expected of you and how it will influence you in the long term.
The Cost of Brand Conversion vs. Potential ROI
In some cases, a hotel brand conversion can lead to cost savings and increased efficiency. As more guests come into your hotel, you can experience increased revenue. However, keep in mind that brand conversions can be costly–and it’s important to evaluate that cost before you launch your improvement plan.
The Impact of Brand Conversion on Day-to-Day Operations
You may assume that hotel brand conversions will not have an immense impact on how you operate day-to-day. However, there are several key things to keep in mind.
- You may have to adopt policies and procedures that are based on corporate-level decisions, not necessarily on the specific needs of your hotel.
- You may end up with more complex steps to follow when taking care of even minor issues.
- You may have less freedom to adapt policies or otherwise create changes based on the needs of specific guests.
On the other hand, some brands have policies and procedures that can streamline your operations and make it easier to answer guest questions. You may also have access to larger databases or support systems. Take a look at the new brand’s policies and how they have the potential to impact your brand long-term.
Potential Risks & Challenges of Hotel Brand Conversion
Before you launch a new brand, make sure you consider the challenges you may face.
Higher Operating Costs
As part of a large hotel chain, you may have to keep up with others in the chain when it comes to marketing or even customer service. That can mean significant operating costs that you didn’t plan for when you made the decision to change your hotel brand.
Failing to Meet Guest Expectations
Some hotel guests will deliberately stay at smaller hotels, rather than going to a chain location. Smaller hotels offer a unique experience, which is exactly what those guests are looking for. Unfortunately, your conversion may mean that you can no longer deliver on those expectations. That can mean decreased guest retention and fewer people who are interested in exactly what your brand has to offer.
High Cost of Renovation
When you convert to a large hotel brand, you’ll need to make sure that your property meets the standards for that line. Those up-front costs can be highly challenging, especially if your hotel has been struggling.
Take the Next Steps
Are you unsure about the next steps for your independent hotel? NewGen Advisory, LLC can help. Contact us today to learn more about how you can make the most of your hotel property or invest in new hotel opportunities.