Skift Take

There may not be a "one size fits all" model for all hotel properties, but our latest research report highlights key items for hotel owners to think about when it comes to operating structures and branding strategies in today's environment.

Today we are launching the latest report for our Skift Research subscribers, A Deep Dive Into Operating & Branding Strategies for Hotel Owners.

In the report, we examine implications for hotel owners of the major brands increasingly shifting to asset light; how independents can succeed when catering to experiential-minded consumers with a focus on technology and data; and key items to think about when choosing a brand. We provide our growth expectations for soft brands and non-branded operators, changes in management and franchise contracts, and distribution, and how these changes will impact hotel owners.

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When it comes to owning a hotel, many public investors think of the less-than-stellar aspects of hotel ownership: lower profit margins relative to franchise and management organizational structures; more volatility in economic downturns against an essentially fixed cost structure; potentially lower company valuations; challenges with online travel agency (OTA) commissions and other distribution costs; costly investments in renovations, furniture, fixtures, and equipment, labor, insurance, sales and marketing, reservation and property management systems, and other expenses. The list goes on and on.

From inside the industry, however, hotel owners and developers see the opportunity to make a return on a real estate investment, “wow” guests with a unique experience, and provide a place of shelter, a space for people to meet and gather, a community. When a hotel owner appropriately positions a property by making smart, efficient, innovative decisions, the outcome can be a financially rewarding, and also a personally fulfilling, experience.
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What we found through our analyses and interviews with owners, operators, managers, franchisors and other industry experts is that there may not be one best way to own a hotel. There is no “one size fits all” operating model, and decisions must be made on a property-by-property basis. Nevertheless, hotel owners can’t be idle, and should continue to be innovative, adaptable, thoughtful. They should also be willing to push back on their managers and franchisors to produce the best results. At the end of the day, the objectives remain the same: Acquire or develop strong real estate, ensure the property is run as effectively and efficiently as possible, choose the right partners, and never lose sight of that hospitality factor. This is a people business after all.

What You’ll Learn From This Report

  • The advantages and disadvantages of different ownership operating models
  • Key considerations when entering into management and franchise agreements
  • How income statements differ among owners, managers, and franchisors
  • An overview of the hotel industry in terms of market shares of branded versus non-branded and managed versus franchised versus owned properties
  • Why the large brands have increasingly shifted to asset light and consolidated
  • The benefits of brand affiliation, including how loyalty programs and lower online travel agency (OTA) commissions can drive incremental revenue
  • How consolidation has negatively impacted hotel owners
  • The potential market opportunity for soft brands and non-branded operators
  • Keys to operating a successful independent property
  • How changes in the distribution landscape, from OTAs to Airbnb and Google, are influencing hotel owner decisions
  • Cost considerations for hotel owners in today’s environment
  • Skift Research’s proprietary ranking of seven major hotel brand chains based on 13 quantitative metrics to inform hotel owners’ decisions about brand affiliation
  • Expectations for distribution costs, growth of independent hotels, how contracts will evolve, and how the major brands are going to respond to industry trends

Subscribe to Skift Research Reports
This is the latest in a series of monthly reports, data sheets, and analyst calls aimed at analyzing the fault lines of disruption in travel. These reports are intended for the busy travel industry decision-maker. Tap into the opinions and insights of our seasoned network of staffers and contributors. Over 200 hours of desk research, data collection, and/or analysis goes into each report.

After you subscribe, you will gain access to our entire vault of reports conducted on topics ranging from technology to marketing strategy to deep dives on key travel brands. Reports are available online in a responsive design format, or you can also buy each report a la carte at a higher price.

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Tags: accor, choice, hilton, hospitality, hotels, hyatt, ihg, la quinta, marriott, research reports, skift research, social media, wyndham

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