Why invest in independent hotels
Of the three types of boutique hotels, independent, lifestyle and soft brand, independent hotels make up the largest number of hotels. To get an understanding of the boutique segment, take a look at the breakdown of the boutique hotel sector according to The Boutique Lodging Report 2020:
- Independent of national brand
- Can be part of small groups 40 to 300 guest rooms Design centric
- Many are developed with a storyline and specific branding concept
- Less than 10,000 square feet of meeting space
- Restaurant and lounge on site or a nearby selection of local dining and entertainment alternatives
- Mostly Luxury & Upper Upscale
- Nationally franchised
- Planned for travelers who are interested in boutique lodging
- Lounge and, at least, light food on site
- Mostly Upscale & Upper Upscale
Soft BrandBoutique Hotel
- Nationally franchised
- Signature hotels individually named
- Most are developed with a storyline and specific branding concept
- Unique in design
- Restaurant and lounge in almost all cases
- Mostly Upper Upscale
A true independent hotel is one that is free from national brand affiliation. This hotel model is the most difficult to manage and offers the most reward to those we can successfully navigate running a successful operation.
Savvy independent hotel investors have reaped the rewards of zero franchise fees all while enjoying occupancy and rate premiums of independent hotels. These investments also enjoy being pillars of their neighborhoods, cultural icons, central meeting points and an opportunity to share the story of the city in which it resides.
These pillars of their communities don’t just enjoy a rate premium, but also much higher Food & Beverage revenues as well for total revenue per available room of over $330. Mostly due to their exceptional occupancy of 78% and high average rates of $274.
Independent Luxury/Upper Upscale hotels enjoy average rates of $274, average occupancy of 78.2% and additional revenues of $117 per available room for a Total Revenue Per Available Room of $332.
-The Highland Group
This results in gross operating profit of over $104 per available room. Still not convinced? Take a look at our in depth review of data on boutique hotel profitability with and without chain affiliation.
This investment shift has caused brands to rush to create soft brands like Hilton’s Curio, and Marriott’s Autograph where investors with capable boutique hotel and restaurant management companies can realize lower interest rates and reduced franchise fees.
The Indigo Road is Seeking Partners
Independent Hotel Investors
Investors seeking to work with The Indigo Road on projects and opportunities to purchase existing, develop or reposition independent boutique hotels and don’t want to manage the operation.
Independent Hotel Owners
Owners who are tired of their hotel management company not understanding how to properly manage an independent hotel, who don’t value the food and beverage experience or are looking for help repositioning an asset towards a more profitable model.
Independent Hotel Developers
Hotel developers who have an active project and are seeking true partners in their success. From the creation of the brand story, advice on architectural plans, pro-formas to understand impacts to key counts, to help raising capital or placing debt and in need of an operational partner for their asset.
Our partners have said time and time again, “our operator doesn’t know how to operate a boutique hotel. They don’t understand how to deliver a “boutique experience.” We also heard, “will you please manage our hotel’s restaurant, the hotel operator doesn’t focus on the restaurant and catering operation and we believe we can do so much better.”
For that reason, The Indigo Road Hospitality Group expanded its reach from independent restaurant management to include independent hotel management. Together with our partners, we aim to deliver an incredible experience through our united team to every guest that walks through our doors.
Indigo Road employs more than one thousand workers across its twenty-four business locations who are led by the managers and chefs who are among the finest in the hospitality industry today.
INC. 5,000 Fastest Growing Companies
Hospitality Magazine, Companies to Watch
James Beard Foundation:
Jeremiah – Nominated 5 times for best chef (Southeast)
Steve Palmer – Nominated 3 times for Outsanding Restauranteur (Semi-finalist every time)
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