BETHESDA, Maryland — Independent hotel owners must weigh their love of control and flexibility with the constant lure of the big hotel companies that want to add them to their soft brand collections due to an insatiable need for net unit growth.
“There’s no doubt there’s a full-scale effort by the big brands to target independents and boutiques… It can be very enticing,” said Jen Barnwell, president of Curator Hotel & Resort Collection, a collection of independent hotels worldwide that is about to hit its fifth anniversary.
Curator, majority owned by Bethesda-based PebbleBrook Hotel Trust, recently added six new hotels to increase its portfolio to 81, and Barnwell said increasing to 100, hopefully early next year, is the next big target. The collection was founded to offer benefits REITs like PebbleBrook were able to generate for themselves. Prior to launching Curator, Barnwell was an asset manager at Pebblebrook.
“It all goes back to harnessing the power of scale, which in the independent and boutique space is really difficult,” she said.
For the most part, staying independent comes down to owners’ desire to make decisions on their own, Barnwell said.
“In many ways, it just goes back to a fundamental decision for these owners, and it’s related to control for the most part -- control and flexibility,” she said. “How involved does the owner want to be in this investment or this operation? Because in a big brand situation, you give all of that up.”
When asked about the biggest surprise over the first five years for the company, Barnwell went back to the big brands’ desire to keep adding independent hotels. (On the day of our interview, Hilton said during its second-quarter earnings call that it wants to add more brands in the lifestyle space that could very well be targeting hotels like the ones in the Curator collection.)
“It’s just how much the consolidation continues,” she said. “On one hand, [the big brand companies] are buying what used to be independent brands and bringing them into their long list of other brands that they already have and are continuing to convert.”
Challenges for independents
Barnwell said the most significant challenge right now for independent hotels comes down to the ever-present demands around awareness and differentiation.
“You have to differentiate yourself because you’re not a commodity at all and you have to get that message out there,” she said. “Finding that traveler who is interested in the boutique and independent experience has always been a challenge.”
Barnwell also said the concept of making every single decision can be paralyzing for some hotel owners, but exciting for others.
“Even on the data side of things, you need to make sure you’re not only capturing all of the accounting and performance data, but also every bit of customer data you possibly can and that you’re storing it and using it the right way to communicate and look for like-minded travelers on the prospect side of things,” she said.
Curator gives its member hotels cost savings benefits with vendors for supplies and has more recently added a B2C component with its own marketing, digital marketing, social media and email campaigns that can produce more top-line revenue for its hotels.
And like all hotels, the emphasis in 2025 is to be in cost-containment mode, Barnwell said.
“Everyone this year is just trying to maintain their margins, or their GOP margin, because there’s so much cost pressure that it’s maybe not realistic to be able to improve them this year, but at least try to maintain them,” she said.
In terms of hotel performance so far this year, Barnwell said Curator’s properties have been showing a little bit better RevPAR than industry averages, mainly because its hotels are in the upper upscale or luxury segments.
“The bifurcation that was evident last year is continuing into this year,” she said.
In general, Curator’s resorts are more flat performance wise, but urban locations are up. For leisure and business travel, the booking window is definitely shorter this year, Barnwell added.
“Leisure can be convinced to take a trip if they feel like they’re getting a deal now,” she said. “There’s a lot of uncertainty and they’re not booking unless they feel pretty good about the deal.”
F&B opportunities
Food and beverage continues to be challenging, but there are opportunities, Barnwell continued.
“Unique experiences in F&B can be really interesting,” she said. “Make them visible and make them bookable because people with money are still looking for ways to spend it.”
Barnwell also notes that alcohol sales have come down from COVID-era highs.
“I don’t know if it’s a trend yet, but a lot of people have been talking about it, especially with wine,” she said.
But there are opportunities with that, too, Barnwell said.
“You must have mocktails, because people will spend $20 for a mocktail just like they would $20 for a cocktail,” she said.
There are also additional opportunities for ROI-inducing spaces in the event and meeting areas, Barnwell said.
“Creative event spaces and meeting spaces are so appreciated,” she said. “Some of our properties have what we call our playrooms or game rooms and you can have such interesting spaces like graffiti art with different kinds of FF&E. You can have a meeting with a bunch of armchairs and sofas, and we tend to go in that direction with things that are more unique, creative and fun.”
Another suggestion for independents from Barnwell: sell your merchandise.
“A lot of these independent and boutiques have amazing concepts and stories behind them with really cool logos,” she said. “We take so much time on the branding and the logos. So, get some merch together and sell it. It’s not going to make hundreds of thousands of dollars, but it’s going to be something memorable. People will buy it and they’ll take it home and then they’ll market you.”
By Rob Schneider
