As lifelong hoteliers, the team at Luxury Hotel Advisors enjoys and admires just about every aspect of the hotel industry but our true love is the independent hotel.  As the Covid-19 pandemic and recovery continue on a shaky path, there is a lot of chatter about how hotel owners will be running to the big brands to deliver the success they do not think they can achieve on their own. We believe there is another path that allows independent hotels to stay that way!

The Strength of the Independent Hotel

When independent hotel owners understand and accept their own strengths, we believe they will not be so quick to consider a chain or brand as an option. We think that independent hotels can actually leverage that nimbleness and respond quickly to the changing landscape of travel.  No red tape.  No corporate approval.  They are not constrained by the standards and sameness of branded properties.  

Many independents are owned and operated by families or ownerships with a vested interest in the day to day operations and interactions with guests. These hotels may represent a substantial portion of the owner’s personal net worth and/or annual income making relations with other investors and lenders even more critical.

The question is how does an independent hotel pivot during and post Covid-19 and find a path to profitability?

Independent Hotel Owners Can Pivot Faster

It is true that independent hotels faced the pandemic without the benefit of brand support and often without the corporate structure of institutional ownership or professional asset management. Owners find themselves in the position of having to make major operational decisions while negotiating with lenders and investors. How do I recover financially? How do we deal with our employees? What message do we send to our guests?  What vendors can I afford to keep? How do I operate at reduced and unpredictable occupancy levels?

On the positive side, one of your strongest assets is the ability to make decisions rapidly. Look at your entire organization and make sure that advantage is utilized in every department. Demand is going to fluctuate and historical numbers do not have as much meaning so keep a close eye on your market and your competitors and respond quickly. Everything from the type of offers being promoted to staffing levels will change more quickly than before and profitability will depend on your ability to keep up.

We are a year into the pandemic and many owners are still wrestling with a variety of unique issues they have never handled before and that require immediate decisions. This is the time to pivot and stay on top of all the fluctuations.

All of this is made even more complex by how long it will take to recover from this crisis.  What we can count on is that 2020 is worth the some time for reflection and planning with revenue expectations significantly reduced. 2021 is predicted to be significantly below 2019 revenues, depending on the type of hotel and location.  More conservative recovery models project a delay in recovery to 2023.

Leverage All of Your Relationships

Clearly, the first step for hotel owners is to take action without delay.  Analyze your local demand, react swiftly and leverage your local relationships. From your lenders to your customers – you have an advantage. They know you and want you to be successful.

You may also want to consider alternative uses for the property, such as residential or long term stays. Look at changing market mix, negotiating loan deferral payments and discontinue partner distributions that are not measurable. Reduce payroll and operating costs; review and discontinue vendor contracts as appropriate; and communicate with  guests about special offers, unique packages and activities in your area.

Specific emphasis should be placed on the following: 

  • Staffing and vendor relations
  • Ramping up sales & marketing strategies to capture previous users and identify new business
  • Guest Safety – CDC safety guidelines, training and application
  • Zero based budget process, labor and productivity analysis with contract review and recommendation
  • Profitable, practical food and beverage concepts
  • Renovation planning process and budget
  • Technology enhancements to future proof your hotel

Hotel Owners Must Be Nimble & Productive to be Competitive Post Covid

To compete in the months and years ahead, independent hotels need to take a hard look at their operating and marketing models. Some areas that might be worth an immediate look:

  • Keep a watchful eye on all key revenue metrics and be nimble in changing direction on pricing strategies and offers – leverage the fact that you do not need to have layers of approvals before implementing a change. No red tape!
  • A complete overhaul of the sales and marketing department may be in order to make this more efficient. The old model was outdated before Covid. Time to automate and simplify.
  • Alternative distribution networks should be considered. Staffing will need to be more efficient than ever.  
  • They will need to fully exercise a key advantage over the brands – the ability to connect directly with guests and make them feel the hotel is taking care of them personally.
  • They will also give guests greater control of the booking process and provide assurance that safety and sanitary measures are in place which are equal to or greater than the brands.
  • Reassess current management and marketing structures and implement technology enhancements.

Above all, independents should continue to emphasize unique guest experiences. The successes of pre-Covid are not lost. However, travel and consumer habits have likely been changed for the long term.  The large brands are adapting through enhance technology geared towards less guest connectivity and concept changes.  Independents will also need to adapt without losing their character and sense of being special.

We believe in the desire for unique, authentic hotel experiences and that this is the time for hotels to rethink their branding, revenue strategies and operational efficiencies. For more insights, visit LHA Articles.

About the Author

L.K. Eric Prevette is a 30-year veteran in the hospitality industry and served as CEO of several luxury hotel companies, including RockResorts and the Resort Properties Division of The Irvine Company. He also served as Chief Financial Officer and Chief Development Officer for Rosewood Hotels and Resorts.

Mr. Prevette has spent most of his hospitality career working exclusively with independent luxury and boutique hotel assets. He and his partner, Carlos Lopes, launched Unique Hotels in 1987 and later co-founded Bel Air Hotel Company. During his career, he has successfully repositioned and assisted in the sale of hotel properties valued at more than $500 million and provided valuable asset management and other advisory services to owners and lender of over 50 hotels in the US, Europe, Mexico, the Caribbean and Asia.

Mr. Prevette brings creative financial and operational thinking to each project with the ultimate goal of optimizing asset value. He is now a managing principal with Karas Hotel Advisors

Please visit for more information.

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