Hospitality sector growing post-Covid – odds are now on independents and non-traditional brands

In a presentation at UK House of Lords Last June, we sounded the alarm about the rapid decline in the market share of independent hoteliers in the UK, from 78% in 2010 to 22% by 2026.

Meanwhile in the United States, the market share of independent hotels has fallen from 67% of the 55,000 American hotels in 2003 to less than 40% of American hotels today.

So how did we get here?

Rapid growth of the offer via brands and Airbnb.

From 2008 to 2010, hotel supply in the United States increased by 17.5%, largely due to new construction by IHG. The rise in UK supply, fueled by Travelodge and Premier Inns, adopted Starbucks’ “one hotel on every corner” approach to saturate markets.

At the end of the second quarter of 2022, the United States accounted for 37% of all new global hotel projects, with Marriott, Hilton, IHG and Accor carrying out 55% of all new construction.

In the UK, Airbnb supply in 2016 represented the equivalent of 27% of UK room inventory. Now in 2022, Airbnb represents 88% of the total room supply in the UK and nearly 25% of the hospitality industry in the US.

Are these global superpowers winning the game? Our money is betting on independent hotels and non-traditional hotel brands as the next post-Covid growth sector.

When Magnuson Hotels was launched in 2003 as the first global chain to provide online booking capabilities for independent hotels, hotels operating outside of traditional hotel brands were decried by the big chains as being of questionable quality and poor quality. second class. Big brand executives shared the nod to industry panels that the market was not oversupplied, but due to too many independent hotels, it was “underdemolished”.

Can thousands of independent, non-traditional brands scale faster than a few slow, publicly traded giants? Our research says yes we can.

Always focus on the long game, but don’t be afraid to go fast.

While the corporate strategy of publicly traded hotel brands has continually accelerated towards short-term actions, we advise hoteliers to always play the long-term game. Grow your business with the strength to take advantage of recessions, survive pandemics, and grow for generations.

9/11, the crash of 2008, Covid 2020, inflation of 2022 and labor shortages illustrate the economic cycles of the past twenty years. We will always have to make decisions in an environment of uncertainty.

The highest growing companies of the past 2 years, Amazon, Apple, Netflix, online grocers and Zoom are all capitalizing on the instability and moving giants by focusing on serving customers with operational efficiency, accountability and accelerated technology implementation.

Traditional hotel franchise brands impose standardizations in design and procedures, which impacts the ability to succeed by being agile.

Over 50% of new Airbnb users say they will never go back to a one-size-fits-all hotel experience. Although Airbnb has flooded the market with offers, they have also shattered the advertising myth perpetuated by large chains that standardization is better. Capitalize on this movement by accentuating your hotel’s unique features in service, location and design. Renovate your way, on your own schedule and within your budget to meet the expectations of your local market.

Turn labor shortages into service-based efficiencies.

Take advantage of new, simple and inexpensive automations such as automated reception software and online check-in. New PMS housekeeping management modules help manage limited staff more efficiently.

Turn rising operational costs into opportunities.

By not having to follow the corporate mandates of traditional hotel franchise brands, independent and non-traditional branded hotels can scale faster than the competition. Choose your own insurance, hotel suppliers and vendors with no markup or franchisor commissions.

Take ownership of your guests with responsibility and friendship.

Many traditional hotel chains and franchise airlines no longer offer customer service or even a face with a name. Take ownership of your customer relationship to create new customers for life.

Owning the new “essential business travel” sector.

While traditional business travel around the world has dropped by 85%, Magnuson has continued to focus for two decades on the ‘business travel essential’ market; a sustainable, non-seasonal base of 52 weeks of key worker segments. Major local employers, industrial, government, energy, medical, transportation, education and construction are now the fastest growing sector, representing recession-proof, non-seasonal revenue .

Global travel is growing at 8.5% annually, compared to 2% in the United States.

Look to the future as global travel is growing at 8.5% annually versus a 2% growth rate in the US over 10 years. If you know your numbers and own your niche, you can outpace the competition. By earning a 4/5 rating, you can price your market and determine a long-term path to profit.

Always focus on the long term and don’t be afraid to act quickly if you want your hotel to be part of the post-Covid growth sector.

About Magnuson Hotels

Founded in 2003 as the world’s first independent hotel chain, today hotel owners can affiliate with Magnuson as an independent brand or as a franchise. With a footprint that includes North America and Europe, the company stays true to the original philosophy; provide comprehensive personalized support and customized technology for hotel owners to succeed in their local markets without typical corporate franchise fees or requirements.

For more information:

Thomas Magnusson
Chief executive officer
+1 509 994 2048
Hotels in Magnuson

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