Independent vs chain hotels: advantages and disadvantages (2024)

Independent hotel chains are not to be confused with general hotel chains. While independent hotels tend to be singular and not belong to a group, more and more chains are starting to acquire these types of hotels to diversify their portfolios. The main pro of a hotel chain is reliability, meaning that wherever a guest goes they can know what to expect, which is generally a high level of service. The main con is typically over-standardization.

On the other hand, the main advantage of independent hotels is that they are more personalized and tend to cater to a specific target audience. On the flip side, they tend to be more expensive and elite. Let’s look more in detail about the difference between these two different kinds of hotels, as well as discover whether these two types of structures can compete. So, let’s get started.

What are the differences between independent and chain hotels?

Today’s consumer is becoming more and more demanding, which has inspired a more personalized and varied offer in the hospitality sector. The offer has expanded to meet these changing demands, and to cater to different types of guests, which has seen the rise of different types of structures like boutique hotels, independent hotels and chain hotels. But what exactly is the difference between these two types of structures?

Standardization vs uniqueness

Whereas chains are built with the idea of having a standard offer, including standardized design and quality standards no matter where a guest stays in the world, independent hotels pride themselves on their uniqueness. That is to say, they strive to offer a unique and authentic experience at every hotel.

One of the ways different hotels can be sure that they are offering a one-of-a-kind service is by carrying out a competitive analysis. A competitive analysis will help indicate what other hotels in the area and with a similar offer are doing so that you can be sure to be competitive within your comp set.

Personalization vs brand standards

Another differentiating factor is the fact that independent hotels focus on the individual guest, seeking to anticipate their needs, and going above and beyond when it comes to service. They usually create guest profiles, so they register their guests’ preferences and can better tailor their services, especially for repeat guests. This personalized touch, of simply just knowing what their guests want, gives them a competitive edge.

On the other hand, chain hotels have extremely high service standards, but they tend to offer a more standard approach to customer service, attending to the needs of their clients as they arise and being sure to offer professionality and quality service across their whole chain. That being said, chains tend to have a less personal touch, focusing on their brand standards rather than what each individual guest wants.

Originality vs uniformity

Another key difference between chains and independent hotels is that the latter focus on originality across all aspects of their hotel, whereas the former focuses on uniformity. This leaves little room for creativity, and creates a feeling that no matter where you are in the world, everything is the same.

On the other hand, in attempting to be original, independent hotels must be creative in their design, what they offer, their decorational elements, gastronomic proposal and in all aspects of the hotel’s concept. This originality is often the deciding factor when it comes to a guest choosing to stay at a smaller, unique property.

Price

While all hotels focus on profitability, chains are more focused on getting the most revenue possible out of every hotel room. They focus on quantity to achieve this goal and for this reason can often be more competitive in terms of pricing. Chains often also choose the location for the hotel because of the location’s attractiveness. For example, in Barcelona you might find a chain on the famous Ramblas Street, whereas a smaller property would look for a more singular location.

The overall experience

There is a significant difference in the overall experience both kinds of hotels offer. That is to say, independent hotels might use technology to create a seamless guest journey, enhancing the guest experience and being able to offer service 24/7. Since they are usually just one-off hotels, this means that they can focus all their attention and resources in providing the best experience possible, constantly adapting to make service even better.

On the other hand, chains, being one of many, seek to offer a standardized experience that will be the same across the brand’s collection of products. This means they may fall short in some aspects of the guest experience.

Marketing and distribution strategies

Another key difference is in the marketing and distribution strategies. Whereas an independent hotel can be original and adapt their marketing and distribution strategies as they see fit, chains must adhere to the chain’s overarching strategy. This leaves little room for creativity for each individual property. Independent hotels also don’t have to contribute revenue or pay marketing fees to the chain, meaning less overhead costs.

Are independent hotels capable of competing with chain hotels?

We’ve looked at the differences between these two structure types, but you may still be wondering if there is any way for them both to compete. The key to getting a competitive advantage is providing a unique experience that cannot be replicated in any other structure.

Another way they can compete with chains is on the level of service they provide and when it comes to a specialized target audience. By correctly segmenting your hotel’s offer for a specific target group, they can better compete with chains. Of course, it is less unlikely that they can compete on price, but quality and the type of offer is a great place to focus efforts.

Learn aboutfive types of guests and how to appeal to them.

Conclusion

We’ve looked at the advantages and disadvantages of these two types of hotels, as well as whether these two hotel types are capable of competing. While smaller, singular hotels will have a hard time competing on price, where they can stand out is by developing an offer that is unique, in an incomparable location with impeccable service.

Furthermore, by creating a targeted, highly-segmented offer for a niche audience, it will be easier to capture clients that are not so price sensitive, but instead are looking for that one-of-a-kind experience. Chains, on the other hand, can be more competitive on pricing, and can provide a sense of reliability that will appeal to a wider target audience.