The 10 largest hotel chains worldwide (excepting Airbnb) aggregately own or operate 44,200 properties globally, inclusive of 5.41 million hotel rooms. Each operates multiple brands that cover almost every aspect of accommodation choice - there’s a brand out there for literally everyone and every lifestyle. There are also more than 100 brands in the top 10 alone!

The Marriott International/Starwood Hotels & Resorts merger has created the largest global chain with 5456 existing hotels and 2101 in the pipeline creating an umbrella of 30+ brands total (with a couple more under consideration).

The enormity of the number of brands potential guests are exposed to is staggering and probably leads more to confusion than ease of selection. “Admittedly — and I’m an industry specialist who knows a lot about branding and hotel brands —even I get confused by the sheer number of hotel brands out there,” confesses Gray Shealy, executive director for Georgetown’s Hospitality Management master’s program and a former global design director for W Hotels.

Shealy is not alone.

At the other end of the scale, independent accommodation providers are flourishing without the need for branding. Although the majority of accommodation is dominated by well-known chains, independents are attracting more and more travellers who want remarkable, locally-inspired and authentic experiences. The hospitality industry has shifted towards being a consumer-led market in which buyers are becoming more quality experience seeking and less sentimental to a brand.

Often generically termed “boutique hotels”, these feature individuality and all its manifestations: unique design, non-standard positioning, high-class service, and exceptional personal approach to each guest. Boutique hotels are designed to create sensations. The emphasis is put on comfort, furnishing, decoration and, not least, the desires of the guest’s inner self. Accommodation providers are trying to create a special atmosphere by making dreams come true for their guests.

Through 2016, sweeping uptakes in occupancy, average daily rate and revenue per available room revealed that independent accommodation properties outperformed their branded competition. Recent increases in overall rates for non-branded hotels have allowed independent accommodation providers to charge roughly the same as a branded hotel while enjoying a very different cost structure.

JF Capital Advisors founder and CEO Jonathan Falik told delegates at the InnDependent Lodging Executives Summit in Phoenix earlier this year, “Hotel owners in certain markets no longer need to ride the coat tails of a big brand to have an effective central-reservation system and global-distribution system presence. The perceived quality of a hotel today is significantly influenced by online guest reviews and rankings.

“Twenty years ago, travellers knew what they were getting in a room and hotel experience based on the cookie-cutter nature of the brands. Now, with the Internet of Things and mobile technology, guests can see exactly what they are getting through online pictures and 360-degree tours, and they can see what prior guests say by reading the top customer complaints long before they book.

“Using technology properly to market independent hotels and reach targeted customers drives stronger occupancy and rates, and this translates into better financial performance.”

Flexibility is also key to independent market success today, Falik stressed. “Owners and marketers can increase/decrease pricing or add services to meet market demand. If operating in a seasonal market, hoteliers can adjust their offering to increase average daily rates and maximise revenues. The more flexible an independent operator can be, the more money the owner will make; this is especially true in high occupancy markets.”

As more and more tourists choose small independent hotels with sophisticated history, original design, exceptional room decoration and unmatched service, hotel chains and large companies are displaying a keen interest in them. Of course, the chains have reacted to the growing threat of independents in the only way they know how – by creating a new brand.

These “soft” brands have taken hold with most chains creating a new name that encompasses all of the attributes of the boutiques.

With hotel “hard” brands so quickly copying each other's amenities, services and décor, just about the only point of differentiation is the human engagement delivered by the people they employ. Soft brands give them a platform to compete into the previously untapped independent hotel market, bringing distinctive properties into an affiliation that expands the franchise company's audience while nurturing the creation of unique property-specific experiences for guests.

It allows the boutique accommodation to benefit from the expansive distribution channels and marketing reach associated with a brand while having the freedom to define and shape the product offering. The soft brand creates a synergistic relationship between the service standards associated with a brand and the character of an independent hotel.

While chain hotels often have more resources for marketing implementation and outreach, they usually face an uphill battle in trying to stand out in a crowded “sea of sameness”. Soft brands give them a new point of difference.

The big chains are embracing these new soft brands: Choice has the Ascend Collection; Marriott has The Luxury Collection, Autograph, Design Hotels and Tribute Portfolio; Best Western has its Premier Collection; Unbound by Hyatt; Accor’s MGallery by Sofitel; and Tapestry by Hilton among them.

In January this year, Hilton launched its 14th brand and second soft brand, Tapestry Collection. This is an upscale brand that focusses on keeping the hotel unique while providing Hilton standards and systems.

As Jeff Cury, senior director of development for Hilton, puts it: “Hilton gives owners the ability to be part of a hugely recognised brand, while still maintaining a certain level of standard that doesn't require the hotel to be so prescriptive.”

Hilton CEO Christopher Nassetta concurs: “As we were talking to customer groups, it became really apparent that when you look at our 13 brands, which are fabulous brands and cover a broad spectrum of the industry, that this was a type of product that I would describe as unique upscale hotels which have their own individual spirit, if you will, and are generally smaller hotels. These are types of hotels that a lot of our customers don’t necessarily want every time they travel, but periodically, it’s a product they want.”

Bjorn Hanson, a clinical professor with the NYU Jonathan M Tisch Center for Hospitality and Tourism, maintains: “The old model of brand uniformity, with the art on the wall being the same in New York City as it is in Honolulu, is being recognised as an old model. Growth won’t be in those uniform design and uniform operational models. Growth will be in soft brands and collections with local tastes, preferences, art, culture, and people looking for an experience.”

Marriott International has announced that 2017 is on track for a progressive year in Asia Pacific with nearly 80 hotels targeted to open, bringing 19,000 new rooms to the region. Additionally, the company will debut two brands in Asia Pacific including MOXY Hotels, Marriott’s next gen boutique-hotel brand for the ‘always on’ and digitally savvy.

Soft brands are able to tap into the desire of consumers wanting a personal experience that they can relate to others through social media. At the same time, these same consumers prefer the ease of access and convenience that brand distribution channels and loyalty programs offer, along with the assurance of dependable service standards that a brand brings to a hotel stay.

As I was writing this article, at the NYU International Hospitality Industry Investment Conference in New York, Marriott International showcased the industry's most powerful independent hotel platform, focused on offering consumers a range of uniquely local hotel experiences and owners an impactful lever to maximise returns while retaining their hotel's individuality. With the acquisition of Starwood Hotels and Resorts in 2016, Marriott International now has more than 240 independent hotels under three distinctive collection brands – The Luxury Collection, Autograph Collection Hotels and Tribute Portfolio – and expects to grow its collection brands by nearly 50 percent by 2019.

The same day, Wyndham Hotel Group, with a portfolio of more than 8000 hotels globally, launched a new independent concept for upper-midscale-and-above hoteliers: The Trademark Hotel Collection. “Trademark is designed for independent entrepreneurs who have built an iconic hotel and are looking to boost its distinctive legacy with unmatched support. The brand invites hoteliers who operate landmark, three-to-four-star hotels to maintain their individual spirit while taking advantage of Wyndham's scale, distribution, services and loyalty program.”

Soft brands have become a hot commodity around the world as franchise companies aggressively move to gain a stake in the independent hotel market where they previously had little presence, and expand into markets that have become saturated with traditional brands.

After a career with Marriott International, Melbourne lawyer Andrew Taylor is among those drawn to the boutique hotel phenomenon: “There’s a demand for boutique hotels that are strongly connected to local neighbourhoods and strong food and beverage.”

Taylor, founder of Cre8tive Property that will focus on finding sites in Sydney, Melbourne and Auckland to deliver boutique hotels, foreshadows there will be more boutique hotels developed in Sydney and Melbourne because they make good economic sense, commanding room rate premiums of 10-20 percent above average hotels.

“And the food and beverage spend as well as the use of onsite facilities such as business facilities is much higher in a boutique hotel,” he said.

The accommodation scene is reaching a fascinating plateau and one can only speculate at what’s to come.

Graham Vercoe - Resort Publishing