The value of independents

Soft brands bring a fresh cachet to major chains

Hotel brands are undergoing a seismic shift as a result of a changing market and traveler demands. Not only is the market demanding an increase in hotel brand offerings, but we are also witnessing a change in market leaders. With new brands in play and less-than-traditional options becoming more convenient and widespread, hoteliers need to know what changes are taking place within the industry and how brands are adapting to retain their competitive edge.

One key obstacle facing classic hotel brands is the new era of home sharing. Airbnb and HomeAway, prominent home sharing brands, provide guests with a one-of-a-kind lodging experience proven to be very attractive to travelers weary of the traditional hotel room. According to Business Insider, Airbnb officially claims more listings worldwide than the top five hotel brands combined. Major hotel brands are addressing the issue with a two-pronged approach; firstly, top hotel brands are expanding into new categories through soft-branded associations and, secondly, through advocating for a more level playing field within the hospitality sector.

Branded properties, like Hilton Worldwide or Marriott International, tend to exhibit a consistent image across the entirety of the chain between services and amenities. This consistency has undeniably created chain reputation and customer expectations worldwide. Independent hotels don’t have to follow such strict branding—they are more likely to exude individuality and “authenticity”—attracting travelers looking for a more localized experience.

Major brands are recognizing independence as a huge selling point and have begun to develop soft brand collections and affiliate programs. These fresh incarnations of the classic hospitality superpowers that have dominated the industry for decades are opening up everywhere and developing at an exponential rate. With the acquisition of Starwood Hotels in September 2016, Marriott’s portfolio now includes over 30 hotel brands—a considerable leap from the 18 Marriott reported at the end of 2014.

The Franklin Hotel Chapel Hill

The Franklin Hotel Chapel Hill, a Collection By Curio.

Marriott isn’t alone. Hilton Hotels is also increasing in size and scope with the new Tapestry Collection, which is their fifteenth hotel brand. Even Trump Hotels, headed by CEO Eric Danziger, announced the launch of two new hotel brands in 2017.

Business Insider reports, “The new chain of hotels, which will not carry the Trump name, were announced in September 2016. The plan is to target millennials with cheaper rooms and larger communal spaces. According to the AP, the rooms are expected to cost between $200 and $300 a night, which is significantly cheaper than Trump’s namesake luxury hotel brand.”

Hotel Skyler Syracuse Tapestry Collection

Hotel Skyler Syracuse, Tapestry Collection.

Hotel Skyler Syracuse Tapestry Collection2

Hotel Skyler Syracuse, Tapestry Collection.

This rapid increase of hotel brand offerings mirrors the progress Airbnb and HomeAway made in a millennial-led market over the past two years and is a strategic move into a new category of hotel offerings: soft brands.

Historically, major hotel chains appealed to customers through luxurious lodging options. But, luxury only appeals to a portion of the hospitality market. Soft brands have the ability to fill in the gaps without sacrificing the integrity of the parent brand. Boutique & Lifestyle Lodging Association, or BLLA, defines a soft brand as “independent hotels that have joined a larger chain and are reaping the benefits of their loyalty programs while maintaining a degree of independence and discreet identity.” These independent entities appeal to travelers with their unique styles and personalities and have caused major brands to take notice. The much-needed injection of personality and individual touch makes soft brands truly shine in what was once a rather homogeneous industry.

Major brands are recognizing independence as a huge selling point and have begun to develop soft brand collections and affiliate programs.

Marriott, Hilton, and Trump aren’t the only major brands who have realized the importance of soft brands. Wyndham Hotel Group rolled out their newest brand, Trademark Hotel Collection, this year and this latest addition marks the company’s 19th brand.

SLS Las Vegas a Collection by Curio5

SLS Las Vegas, a Collection by Curio.

Offerings in the Trademark Hotel Collection will consist of independent hotels with ratings ranging from three to four stars and will start with 50 properties in its pipeline with both existing and new build hotels primarily located in urban markets internationally.

When discussing Wyndham’s decision to launch the soft brand, CDO Chip Ohlsson said, “The explosion of soft brands in the last several years has been focused on luxury and upscale hoteliers—with demand still growing at a rate of nearly 20 percent—leaving a market void for independent hoteliers in the upper-midscale segment, the largest segment accounting for 18 percent of rooms in the U.S.”

SLS Las Vegas a Collection by Curio

SLS Las Vegas, a Collection by Curio.

SLS Las Vegas

SLS Las Vegas, a Collection by Curio.


Tapestry Collection by Hilton Worldwide

Departing from their traditional luxury hotel properties, the Tapestry Collection seeks to capture travelers looking to stay in local hotels with three- and four-star ratings.

Tapestry Collection by Hilton Worldwide
Trademark Hotel Collection by Wyndham

Wyndham’s latest soft brand is geared towards three- and four-star independent hotels with distinctive experiences. The collection of independent hotels enables guests to experience the destination for a truly local feel.

Trademark Hotel Collection by Wyndham
Scion by Trump Hotels

Scion, meaning “descendents of a noble family,” is meant to be a lifestyle brand aimed at attracting younger travelers looking for something a little more outside-the-box than traditional Trump Hotels. The flagship hotel is currently under construction in Mississippi and will feature local flavor and vintage decor.

Scion by Trump Hotels

The hospitality industry needs soft brands due to their design: slightly undefined and not as scripted as the hard brands. With travelers being drawn to the local experience and the hospitality industry accommodating travelers all across the globe, parent companies are seeing success by providing a memorable experience in a local scene. In a soft brand, the hotelier has the ability to differentiate their Memphis hotel look and feel from their counterpart somewhere else, such as Salt Lake City.

In this way, soft brands are making more money for large chains and, in return, the independent brands gain access to the resources of an established hotel chain. While major brands face much more red tape during the expansion process than home sharing brands, soft-branded hotels claim a high rate of return due to their appeal.

The Marquette a Collection by Curio

The Marquette, a Collection by Curio.

Wyndham’s decision to launch the Trademark Hotel Collection is symbolic of the larger push from the hospitality industry overall to capture more of the market. With U.S. hotel room demand expected to level off, hotel companies are trying to sell independent operators on the idea of joining a soft brand, and it’s proving to be very attractive.

Independent operators can benefit greatly from the resources provided by a large company like Marriott or Hilton. Loyalty programs and booking engines powered by the parent companies will enable independent hoteliers to cut their percentage of the more expensive OTA bookings from sites such as Expedia and generate more revenue directly from the larger companies’ websites and call centers. OTA commission rates in the form of wholesale room prices can fall to about 15 percent once under a soft brand, from as much as 25 percent as an independent listing.

When becoming part of a soft brand, independent hoteliers are left with the freedom to create their own identity and offer a refreshing alternative to the traditional hospitality industry. The risk independent operators face when joining a soft brand is the investment in a concept—in the form of fees paid to the parent company—that is still proving itself to the hospitality industry.

SLS Las Vegas a Collection by Curio
SLS Las Vegas a Collection by Curio

The Diplomat, a Collection by Curio.

“The hype is coming before the true growth,” explained Michael Heflin, Travel Leader Group’s hotel division senior vice president. “All the major chains are talking about them, but the bookings are small enough that it’s hard to even quantify.”

Parent companies also risk their soft brands taking business from the traditional chain properties in the same sector. John Keeling, executive vice president of the Valencia Group, uses his company’s former Hotel Sorella in Kansas City, Missouri, as an example. “When the Raphael became the Autograph across the street from the Sorella, it didn’t affect us one bit. What it affected was the Marriott down the street.”

Soft brands have the ability to fill in the gaps without sacrificing the integrity of the parent brand.

The Autograph he’s referring to is the Autograph Collection, a soft brand from Marriott that boasts over 100 properties worldwide. Marriott’s vice president of the Autograph collection, Julius Robinson, disagrees with Keeling. Robinson is more concerned with the “me, too” nature of soft brands, but he’s seen no cannibalization between the Autograph Collection and Marriott’s hard-branded properties.

It remains to be seen whether soft brands will stand the test of time; with a seven-year growth coming to an end, smart independent hoteliers are vying to get in with a soft brand before they begin facing the possibility of bankruptcy. One thing is certain, though, the appeal of independent hotels is growing.

Hoteliers are obviously taking note of what attracts guests to these services and are adjusting accordingly. With the recent soft brand launches in 2017, it will be interesting to see which hotel chains see success with their new approach to the hospitality market. Will the brand expansions and focus on a unique guest experience pay off? Only time will tell.


Sanjay Mundra is CEO of SVN Hotels, an international hotel brokerage firm headquarteredin Raleigh, NC, and created by Sperry Van Ness International Corporation, a commercial real estate brand which generates more than $10 billion in transaction volume. Mundra has been involved in the hospitality business for more than 30 years.

Sanjay Mundra CEO of SVN Hotels

(Featured image: The Diplomat, a Collection by Curio.)

Images courtesy: © 2017 Hilton Worldwide