Independents find expanded options

Brooklyn’s NU Hotel

Brooklyn’s NU Hotel caters to corporate accounts during the week and groups and wedding visitors on the weekends. The hotel is near the Brooklyn Bridge and the Barclay Center.Pictured: Brooklyn’s NU Hotel caters to corporate accounts during the week and groups and wedding visitors on the weekends. The hotel is near the Brooklyn Bridge and the Barclay Center.

National Report – In the past, running an independent hotel could be a pretty thankless job. Guests craved the familiarity provided by a recognizable brand name, technology to run the property was prohibitively expensive and marketing was not a task for the faint of heart. But independent hoteliers today are reaping the benefits of a new type of guest, affordable options specifically for their type of property and a whole new world in terms of marketing.

This improved operating environment has given managers the opportunity to focus on what they love about independent hotels: the ability to run their hotels the way they want to.

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Free Rein

The top advantage of being an independent hotel is freedom, according to several independent hoteliers.

“We can essentially do what we want,” said Javier Egipciaco, GM of the 93-room NU Hotel in Brooklyn, N.Y., which has been open since 2008. “There’s not a brand telling us we can’t paint a wall a certain color or we can’t have a different type of artwork in the rooms or we can’t execute certain initiatives without their approval. We’re allowed to spread our wings, think of new and innovative ways to create a great service experience for our guests and we run with it.”

The Orlando Hotel in Los Angeles celebrated its 30th anniversary on June 4. It was built for the 1984 Summer Olympics.Pictured: The Orlando Hotel in Los Angeles celebrated its 30th anniversary on June 4. It was built for the 1984 Summer Olympics.

Not being part of a franchise allows the Lone Star Court in Austin, Texas, to bring something unique to the marketplace, said Marcus Latner, GM of the 123-room property, which opened in December. Valencia Hospitality owns and manages the hotel.

“You can go outside the box, differentiate yourself from the others,” he said. “If you go to one Marriott, you’ve almost been to all Marriotts. Here, you’ve got completely new, completely redone; it gives you a whole new experience and the attraction of being somewhere new.”

Being independent means owners and managers often are much more hands-on in every aspect.

“You are much more in control of the product,” said Lesley Carey, VP asset manager for The Orlando Hotel in Los Angeles. The 93-room Orlando Hotel opened in 1984 and has always been independent. “You’re much more in control of guest satisfaction, and you can be very creative. What makes a boutique hotel stand out is the creativity in the marketplace. You are competitive, and you’ve always got to be a step ahead.”

Latner said being independent also means there’s a lot less red tape to go through.

“It allows you the freedom to do what you need to do to make the customer happy,” Latner said. “It’s not so black and white. If we need to do something to make a guest happy, we have that authority without having to get approval to do it. It allows us to do more to make the property shine and to be able to adjust and maneuver quickly to any circumstances that may come up.”

That freedom leads to quicker decisions and faster implementation of programs and changes.

“If you want to be able to make changes and move forward, you’re going to do it 100 times quicker as an independent than as a franchise,” said Jeff Durham, owner of the Redwood Fortuna (Calif.) Riverwalk Hotel and principal and founder of Passport Advisory Group. The hotel was a Holiday Inn Express when Durham purchased it six years ago, and he and business partner Joe Wolosz went independent a year ago.

Expanded options

Technology and purchasing companies have jumped on the independent hotel bandwagon in the past several years, which puts those hotels on a more even playing field with branded hotels.

In terms of technology, property-management systems, reservations systems, point-of-sale and other systems all are available for independent properties at affordable prices, Carey said.

“Many years ago, you really had to go to a brand because it was so expensive to be independent and have a system like that,” she said. “But today, these companies have realized that they have to put together a program that the independents can work with that gives you access to the technology.”

Durham said that every program an independent hotel needs is accessible.

“Every single resource that was IHG’s is out there somewhere in some individual company,” he said. “No matter what IHG had or did or was proprietary or worked for them, someone is out there doing it for the individual hotels, as well. Every single thing.”

Egipciaco agreed, and said NU Hotel takes full advantage of the expanded technology offerings.

“Technology has improved so much that we are privileged to be able to have the same type of technology with regards to managing our rooms,” Egipciaco said. “We still use typically the same system but it’s essentially tailored toward the independent hotel.”

Durham, whose property formerly was a Holiday Inn Express, said he could never get into the brand’s property-management system when he was with IHG, but going non-branded solved that problem.

“I go independent, I now have a reservation system that I pay $300 a month for,” he said. “It’s on my computer at any point, so I can put reservations in, I can interact with my front desk. Same thing with my website, no start-up costs and $300 a month to maintain. I can change it at any point. I never had that with IHG and I know none of the chains do that.

“Those are the little things that give me as the owner and my general manager the power to take care of the guest and run an effective business.”

Independent hotels also now have more purchasing power, another area where brands used to have the upper hand.

Carey said the purchasing companies have really become a partner with the independents.

“Purchasing companies have really understood that the independents have got to have a price point that makes sense,” Carey said. “They’ve put together some fantastic programs that allow us to afford to operate.”

NU Hotel takes advantage of purchasing programs offered by its owner, Hersha Hospitality Trust, and manager, Hersha Hospitality Management. NU is part of HHM’s Independent Collection.

“Being part of HHM gives us the buying power of 100-plus hotels,” Egipciaco said. “The system we have set up right now really helps us create leverage with buying power.”

According to Durham, a brand’s buying power doesn’t really help him because of his location; for example, only one food distributor delivers to his hotel. He researches prices and products to find the best fit for his hotel, which has a “green” focus. He said he is able to find what he wants cheaper than when he went through IHG, which means there’s more money for other areas.

“Now we have the resources to put the money toward the guest,” he said. “We can buy cool lamp shades, but now let’s use some money to bump up the breakfast; we have the money to put back into the rooms and do more room renovations.”

Making the decision

Hoteliers had these tips for owners who are in the process of deciding whether to sign with a brand or be independent:

1 Determine your competitive set, where you are located and what you are trying to achieve.

2 Figure out your positioning in the marketplace.

3 Make sure your staff is behind you and with you throughout the process.

4 Research, research, research. You can’t just put a new name on the building and move forward.

5 Decide if you have a passion for wanting something unique and can make decisions on your own.

6 Determine if your location can support an independent hotel. Does it have a lively culture that will embrace an independent property?

7 Talk with successful independent owners and managers to get a sense of what will or won’t work.