From an owner and investor perspective, are independent or branded hotels best? As expected, the answer is not straightforward, with various factors to consider, including size of the property, location and market.
In the U.S., 72 percent of hotels are branded, according to STR. In Europe, although the ‘chainification’ of hotels has increased over the years, there are large variations from country to country. According to 2022 research, Spain has 58 percent chain hotels while Italy has only 17 percent. It is not uncommon for independent European hotels to have been owned by the same family for generations.
“They’re established, and they just don’t see the need to give up on their margin for a brand,” said Mary Beth Cutshall, CEO, Amara Capital Group. Paying the fees to operate under a brand typically costs 10-11 percent of revenue.
Advantages of being independent include greater freedom to decide how the property looks and how often it is renovated.
Read the full article on our sister site, Hospitality Investor.