According to Stephen Rushmore, President and founder of HVS, “the expense is equivalent to taking on a 25% partner.” Is that the size partner you want or need??
With the rash of new branded boutique properties across the spectrum, brands are in a race to the bottom. How will each of these hotel brands stick out from one to the other? What is Vib and why is not as good as Ascend? Or is it the opposite?
According to a Cornell University study for every point its TripAdvisor reputation improves on a five-point scale, a hotel can raise prices by 11 percent and for every percentage point a hotel improves its TripAdvisor reputation, its RevPAR goes up by 1.4 percent. Positive benefits also include increases in occupancy. How does a brand figure into this equation?
While there is absolutely a time and a place for branded hotels, there is also a very strong argument to go independent and it should be based on which model would be more profitable. We have advised clients to go branded for financing. We have also come across properties where the brand standards were crushing an entrepreneurial endeavor.
I will be speaking at the Boutique Lodging Conference for the Boutique Financial Performance Panel June 3 at the SVA Theatre in New York City. I will also be available during the NYU Investment Conference. If you would like to connect to discuss rebranding, repositioning, development of hotels, let’s connect over the conferences.
Keith J. Space
Boutique Hospitality Management