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3 Things to Consider Before You Deflag Your Hotel

Posted on May 29, 2018 12:44:12 PM

There aren’t many industries where a business owner can suddenly change the name and niche of their business and remain successful.

But a growing number of hotel owners are deflagging, and making a go of it as an independent. If you’ve reached a point where you’re asking yourself, “Is deflagging my hotel the right choice?” there are three things you should consider before moving onto the next question of, “How will I deflag my hotel?”

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Hotel Data and Deflagging My Hotel

One challenging aspect of a brand-to-independent conversion revolves around your hotel data, particularly your guest profile data. It’s likely that control of your guest history information belongs to your brand, not your individual hotel. An owner who has been operating a chain property for decades, may be surprised to learn they no longer have access to that data.

Another related consideration is managing changes to your technology and distribution systems. Those changes are often more complex than you may anticipate and could involve everything from replacing your property management system (PMS), to its connectivity with global distribution systems, to managing your relationships with online travel agencies (OTA) and review sites.

Marketing Matters for Deflagging

If you decide to deflag and become an independent hotel, an additional issue is your property’s loss of brand marketing and advertising resources. To compensate,  you may want to increase your hotel sales staff and budget more for marketing expenditures, particularly for digital marketing solutions.

And although you’ll no longer have the big brand marketing budget, you’ll enjoy greater flexibility in your marketing efforts. Study your market’s demand generators and guest booking behavior, and create personalized marketing campaigns that are highly effective with today’s travelers.

Deflagging & Revenue Management

A third element to consider before deflagging your hotel is your revenue management (RM) strategy. As an independent, you won’t have the broad distribution and OTA negotiating power you had as part of a multinational chain. On the plus side of the balance sheet, however, you’ll be able to adapt more quickly to market changes.

To create a flexible strategy that maximizes profitability, you’ll need to set new goals specific to your new position as an independent. Take a fresh look at your competitive set and key performance indicators (KPIs) with those goals in mind. You’ll want to optimize your pricing by driving revenue-lifting direct bookings, and improve your channel distribution by analyzing your acquisition costs and revenue for each.

More hotel owners are cutting the cord with their chains, looking to achieve greater potential in the world as a boutique or niche property. So, in order to answer to our original question, “Is deflagging my hotel the right choice?” objectively consider the challenges you’ll face, as well as the benefits you’ll enjoy when converting from a brand to an independent hotel.

Contact us for a free assessment to see whether deflagging may be right for you!

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Topics: Pegasus Solutions, Hotels, Blog, increase hotel sales, increase hotel revenue, hotel technology trends, technology trends in hotel industry

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