The rise of the consortia

Mark Lewis, CEO, HotelREZ, describes how consortia have evolved to offer independent hotels a voice in a growing field of soft brands.

There has been a significant shift in what is now expected from the consortia. When we acquired Best Loved Hotels in 2019, we added a beautiful portfolio of properties, but what was missing was the path to booking and distribution is an area where many of the consortia have been left behind.

We started to see changes to the traditional consortia models pre pandemic, which were accelerated by enforced closures and restrictions over lockdowns. Commercial leaders, owners and general managers within hotels were motivated to examine their key sources of profitability and assess the health of their cashflow. On exploring the commercial benefits of affiliations, it was found that many were not driving measurable value. 

As Olympic Gold Medallist, Ben Hunt-Davis, said: “Will it make the boat go faster? Will it get us further down the line as efficiently as possible?” And if the answer is no, then hoteliers should rethink their commercial strategy.

Traditionally consortia have a significant cost of sale and fixed costs to underwrite the brand and to some degree have acted as a club for hotelier career paths, which in itself, breeds a degree of loyalty. With advances in technology and changes in working practices consortia can now be more flexible and cost effective in their pricing.

Recent years have seen more distribution options available to independent hotels. The online travel agents presented the first viable option and, latterly, the big global chains have responded with soft brands. These have created a route to market which doesn’t demand rigorous adherence to brand standards and gives access to global platforms and loyalty programmes. 

But what is the motivation of the parent company? The hotel may still look independent, but are they brand first, or are they a property first? Are they there to help maintain pipeline growth, or are they a unique hotel with unique requirements? 

The conversation must be brought back to: “What are your commercial goals? What sort of property do you want to be? What sort of guests are you targeting?” This will help to form a distribution strategy and which demand partners and technological bias fits. There is a lot of movement in the booking engine space now and there are some companies running loss leaders, which we have seen come and go over the years.

Being open to working with other, multiple suppliers will support hoteliers to find and build the right technology stack. There is so much diversity in today’s hospitality and tech landscape that having the flexibility to interface with different partners is a huge point of difference in terms of speed to market.

Take, for example, groups such as the Sutton Hotel Collection, Staycity Group, Oakman Inns and room2 – all are leaders in their respective segments and require varying methods of support to hit their financial goals. As diverse as these groups may be, their similarities and successes lie in the strength of their independent brand image and sound understanding of their customer base.

To celebrate uniqueness is the guiding light for independent hotels. The rise of the consortia has an increasingly important role to play in an ever-competitive market to ensure independent legacies continue to thrive. 

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