Posted on 19/02/2019 by Lukas James
The world of hotel management can be daunting for those without extensive experience in the industry and selecting the right structure for a new or existing property can have major implications for the success of a business.
It’s an intensely personal choice and there are many factors to consider, but we go through some of the key reasons why more people than ever are opting to use the services of boutique hospitality management agencies.
It’s about personality
Hospitality is about far more than just providing a place to sleep. Creating a complete guest experience is an artform and generally the owners that succeed are those with a passion for the industry. For others, a hospitality venture is driven purely by numbers.
Unicorn Hotels & Resorts CEO, Yann Gouriou, gives a frank assessment of the general mentality of owners that opt for chain hotels: “(They) are not usually individual owners, they are investment companies or global corporations that have cash to invest in real estate. They own an asset and they need someone to manage the asset. It’s not about passion. It’s not about hospitality, It’s about return on investment, asset appreciation and exit in many cases..”
Owners that are passionate about the hospitality industry generally find that a chain hotel offers a far more less personal experience for both guests and in the interactions between the owner and the brand. When working with independent hotel management companies, you are working with people with a passion for hospitality, people that understand the needs of both owners and guests and that are responsive to individual needs.
Greater scope for creativity and identity
Identity, it’s what makes us unique and for many owners the ability to create a bespoke and unique concept around their hotel is vital. This is increasingly true given the dramatic changes taking place in the hotel landscape over the past decade. Online marketplaces like Airbnb have disrupted the industry, providing a wealth of alternate accomodation options and leading to hotel guests expecting more creative, bespoke accommodation options.
Millennial travellers especially are basing their purchasing decisions around experiences and this is reflected in their choice of hotel experiences that are unique and represent their own personality and interests.
By working from the ground up with a knowledgeable hospitality management company, owners can make their unique vision of what they want to achieve come to life. From the concept through to the design phase, owners can create a unique brand that truly represents their vision.
Able to adapt to changing market conditions
While large hotel chains have established brands behind them, the scale of these organizations can also tie them down. Like any large corporate structure, layers of management and rigid structures make them slow and cumbersome.
While franchise hotels are trying to adapt to changing market trends, independents are less encumbered by the restrictive requirements of central management. If a chain like Sheraton is a luxury vehicle, independent hotels are more like a Ducati - far more nimble, maneuverable and responsive to changing market conditions.
You can set your own standards
“If you want to work with Marriott, you have to use one of Marriott’s brands and build the hotel following Marriott's standards ,” Gouriou says. “We have a different approach, it’s like going to a tailor, we develop the product together with the owner based on a vision and a budget that have been discussed and agreed upon. We then build the hotel and ensure at every steps that it fits from an investment, market and guest experience perspective. No every owner is able to meet international chains requirement form a construction perspective and secondly not every owner wants to give up his identity to become one of the 1000’s hotels the chain has - that is why companies like ours exist.”
Setting individual standards does not mean that the expectations are lowered or service standard compromised. It simply means that owners can work with an established hospitality management company to determine what’s right from them, rather than working to the strict requirements of a head office.
Access is everything
Large chain hotels can be impersonal and impenetrable. If an asset manager wants to pick up the phone and ask a question of a large management company, they may have to talk to the GM who has to go to the regional manager who contracts the vice president of the division and then maybe to the president of company. It’s a messy process and could take a week or longer.
Smaller, boutique management companies are more accessible and generally only a single phone call away. Proximity is important and this close relationship is an important factor for many owners.
“Signing a hotel management agreement with a large hotel chain is a bit like getting married - a divorce can be very painful for the owner” - Yann Gouriou
One of the other advantages to working with independent hospitality companies are the cost benefits. With huge operating costs and bloated administrative departments, chains tend to charge higher fees. Guess who pays for them?
Whilst it’s true that larger hotel brands can achieve some cost reductions from OTAs based on the strength of their collective bargaining power and have stronger brand impact on consumers, the those saving not always reflect in the profits generated.
Along with providing a more boutique service, independent hotels management companies charge less for their services and branding contribution, making it a more attractive proposition for many owners.
Shorter and more flexible contracts
Hotel chains generally start with a 10 year renewable terms while smaller management companies provide greater flexibility and are able to offer contracts on shorter arrangements. It allows for the owner and management company to work together and solidify a relationship without needing to commit to a full 10 year term.
“Signing a management contract with a big company is a bit like getting married - a divorce can be very painful for the owner,” explains Gouriou. It’s incredibly difficult to uncouple from a large chain. Their contracts are rigid and firmly enforced and working with an independent hotel management company allows more flexibility.
Unicorn Hotels & Resorts is a boutique hotel management company based in Bangkok, with decades of experience across all aspects of hotel management.
We help independent hotels and innovative lodging concepts to launch and gain strategic advantage over chain franchise branded hotels. In today’s marketplace, driven by guest reviews and online reputation, a property with a unique character and a world-class customer experience can be leveraged to achieve global reach and exposure.
We have more than two decades experience in the hospitality space and provide personalized hospitality management services, tailored to the individual requirements of each property. We assist owners with all aspects of hospitality including operations management, management, sales and marketing, concept development, pre-opening and revenue strategies.
Talk to us about how we can help you to unlock the potential of your property.
Photo by Migel Radriges at The Cove Phi Phi
180 Sixteen Place Building, 2nd Floor, Sukhumvit Soi 16 (Sammitr), Klongtoey Bangkok 10110
T/ +66 2 107 2012
F/ +66 2 663 3044