Independent Hotels Tap Social Media to Drive Direct Bookings

Skift Take
Independent hoteliers do not have a degree taking part in subject with the massive manufacturers when it comes to attracting direct bookings. But a savvy use of social media can enhance issues so much.

Sean O’Neill

I’ve reported steadily on branded lodge firms, and final week I interviewed the CEOs of Marriott and IHG on-stage at Skift Global Forum.

So I wished to swap gears and take the heart beat of the unbiased lodge sector.

I spoke with Andrew Benioff, who is aware of as a lot about unbiased lodges within the U.S. as anybody I do know.

Benioff is a Philadelphia-based founder and managing associate of Llenrock Realty Partners, a agency that invests in and develops unbiased lodges. He’s busy making ready for the Independent Lodging Congress taking place subsequent month in Los Angeles.It’s the biggest U.S. competition for unbiased hoteliers and designers, and he based it about 15 years in the past.

Benioff instructed me that unbiased lodge possession isn’t for everybody.

“If you’re a developer and also you need to put money into lodging, the simplest and least-risky choice is to discover a location, put up a select-service product from a significant model, rent one of many few hundred administration firms within the U.S. or perhaps rent a model to handle it,” Benioff stated.“For essentially the most half, relying on how a lot consideration you or your asset supervisor pays to it, you’ll make someplace between a fairly good amount of cash and some huge cash,” Benioff stated. “Independent lodges are tougher to finance than branded ones, as a rule,” Benioff stated. “I got here from the mortgage banking trade, and I’ve labored on transactions for each branded and unbranded. It’s a gatekeeping factor. The gate is opening extra usually to unbiased hoteliers than it did earlier than but it surely nonetheless doesn’t open as usually.”“Some banks and lenders don’t notice that between 90 % and 95 % of the benefit that the massive manufacturers have might be mitigated by way of many different means,” he stated. “Investing or growing unbiased lodges is principally one thing you do while you need to go away a legacy that’s greater than, say, dozens of buildings and a pile of cash,” Benioff stated. “Independent lodges might be profitable, however they will also be a headache,” Benioff stated. “You do it so you possibly can say, ‘I created one thing actually compelling and significant to people who they’ll keep in mind for years.’”

Social media generally is a “sport changer” for unbiased lodges when it comes to driving direct distribution.

“The huge manufacturers do have loyalty packages which might be superb at driving direct bookings,” Benioff stated. “They have an edge there, although there are some loyalty packages for independents, too.”“Independents can offset the remainder by making a hospitality expertise that friends will discuss with everybody they know,” Benioff stated.Social media may also help unbiased hoteliers drive extra direct bookings and keep away from the commissions that on-line journey businesses cost.“Social media generally is a sport changer in case you have an inspirational and spectacular design with scrumptious beverage craft cocktails,” Benioff stated. “If you rent somebody accountable for social media advertising at an affiliate degree, you may make again their compensation inside a month thanks to an enhanced stream to the underside line, relying in your property and placement,” he stated.

Rising rates of interest have difficult dealmaking for unbiased lodges.

There’s a disconnect between capitalization charges — a measure of property returns — and financing charges — or the price of debt.Capitalization charges have fallen since earlier than the pandemic. In some U.S. markets, they’re at roughly 4 %, down from roughly 5 % earlier than.Yet the trade’s value of debt is rising effectively above 6 %.The scenario will appropriate itself. Capitalization charges ought to rise over time.“But proper now, house owners nonetheless need sky-high valuations,” Benioff stated. “Yet consumers can’t finance purchases as a result of the offers don’t make sense, typically talking.”

I all the time learn suggestions and suggestions. Contact me at [email protected] or through my LinkedIn profile.

https://skift.com/2022/09/26/independent-hotels-tap-social-media-to-drive-direct-bookings/

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