Independent or Partnership? Which is better for your business

The decision to remain independent or join a hotel group or chain is a pivotal one for accommodation operators. It’s a bit like deciding whether to stay single or join a partnership.

Both options have their advantages and drawbacks and it really comes down to what the operator’s goals and circumstances are.

In Australia and New Zealand, there are a number of options available for operators. Drawing on my experience in both independent and group affiliated properties I can see the benefits and challenges to each approach.

One of the most significant advantages is the support and sense of community belonging to a group can bring. Independent accommodation operators often find themselves alone and struggling during the tough times. Having the camaraderie of fellow operators within the group as well as access to expert advice to improve the property can be the biggest influencer in the decision making process.

Additional exposure through marketing efforts, loyalty and referral programs are also benefits. Loyalty programs play a pivotal role in increasing repeat guests as well as the referral programs within the group/chains.

The cost of membership or franchise fees is a critical factor in the decision process. Depending on the property, the decision will depend on if the group is going to bring a market segment suitable for the property. 

With a number of options in Australia and New Zealand there are chains and groups suitable for most sectors of the industry, so it is worth doing the research.

Operators must weigh this expense against the expected return on investment. For example, a corporate-focused chain might not be the best fit for a property in a high-tourism area, even if it offers extensive benefits.

There are also different models to consider. Some groups have a membership model where others provide a franchise setup. The cost and return on investment will be one of the biggest considerations for independent operators.

The cost of the membership or becoming a franchisee will contribute towards the marketing and advertising spend that independent operators would not otherwise have available to them, as well as ongoing support and development.

Brand awareness and recognition is another significant drawcard.  There are many travellers who will choose their destination depending on the accommodation available. By joining a chain, it can instil confidence in the guest regarding the standard and facilities available to them, making your property a preferred choice..

Another challenge for independent property lies in adapting to specific requirements in operating procedures, standards and sometimes software used within the property. This can be a big challenge for new operators and their team. On the other hand it can assist in the recruitment of new team members from other properties within the group/chain as the standard and procedures will be of the same level and transferable.

Being part of a group or chain also enables buying power for the group, with the  power in numbers method. 

Operators will have access to preferred suppliers and discounted rates from providers that are chosen for the best interests of the group/chain members. Flexibility may be limited. Preferred suppliers chosen by the group may not always align with the unique needs of every property.

Membership or franchise costs also contribute to the yearly conference for the group/chain members. This is a fantastic opportunity for the operators to learn from industry experts, network and celebrate success. It is also an excellent opportunity for operators to let their hair down a little with like minded people and new friends.

From my experience in a variety of properties,I believe it all comes down to the property’s unique characteristics and long-term goals as to whether the affiliation will benefit all parties. While affiliation can offer marketing power, brand recognition, and operational support, it also requires financial investment and operational alignment. Ultimately, the decision should be guided by what aligns best with the property and the operator.