Independent hotel reinvention via niches and micro niches

With so much hotel product in the market (with more to come), combined with the drop in occupancy worldwide, more and more hotels are going to need to reinvent themselves. Big global chains have been doing this for a few years now, rolling out new brands to serve additional market segments (Aloft, Andaz, Element, Indigo, etc). The competition has become so fierce that, as most of you have read,  Starwood and Hilton are even going to court over alleged stealing of research and market intelligence by the latter.

To date, hotels and resorts have distinguished themselves through design, technology, amenities and service, but it’s not going to be enough to survive in today and tomorrow’s crowded marketplace. Independents will need to reinvent themselves, to better serve new niche and micro niche markets. So far, entire hotels or resorts focusing on families, couples, nudists, swingers, gays and lesbians have done well, but there are other niches and subsets of existing nichesthat will present equal or even greater opportunities. 

In the next five years expect to see serious fragmentation in the hospitality industry, with entire hotels dedicated to more niche and microniche products. We’re beginning a new assignment with a hotel group in Mexico looking to reposition their hotel in one of the new micro niche markets, to escape from winning or losing business based purely on room rate. Stay tuned when we roll out the new concept.

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