Here’s a quick way to test asset distinction. Grab your latest DaySTAR Report and march out the front door of your property, and look up. Do you see a sign with the name of a franchise on your building? Second test… Take a look at the CompSet in your hand. Does the list include nearby, franchise-branded products? If the answer to these questions is yes, then your asset is closer to commodity status than to premium.
The advantages of being distinct…
Let’s start with the consumer, since ultimately it is he or she that is really in charge these days. In the last five-to-ten years, consumers have become much more vocal about their preference for unique, distinct, non-template, unusual and different [experiences]. When asked directly, they are more than willing to seek out and pay more for something other than “another bed in a box.”
P&L statements like independently branded properties, too. Experiential [properly positioned] properties generally command higher ADR’s, demand, RevPOR, GOP and NOI… also longer lengths of stay, increased repeat visit percentages and referral rates. Since 2013, independently branded properties continue to outperform chain and franchise-branded properties, AND the independents are not subjected to decreased margins at the expense of exorbitant franchise fees. The advent of the internet and the resulting change in distribution channels finally makes it possible for owners to be in control of their own destiny again.
But…the shift away from “commodity” requires a special discipline.
Positioning a property to be distinct and preferred by audiences that will ultimately bless a balance sheet with maximized profitability, is a process. It starts with honest assessments of the existing product, available audiences and competitor challenges; and touches every aspect of communication, planning, training, implementation, product attribute, amenity, and follow-up. It is a special discipline that should have buy-in at the very top of the organization, and be driven by a team of experienced and passionate individuals.
The process requires commitment. The product can become distinctively preferred. The financial rewards can be one-of-a-kind.