The Independent Lodging Congress has announced an exciting new pitch event geared at hospitality startups serving independents (find out whether your startup is eligible for INDIE Cultivate here).  The ILC has long been a champion of progress in the hotel industry and fundamentally believes that technology has leveled the playing field between independents and hotel brands.

Marriott recently announced that it will add 1,700 new hotels by 2021 meaning that branded properties will be taking an even bigger chunk out of the development pipeline moving forward.  

“Don’t expect these properties to be anything like a St. Regis or JW Marriott, though, but more cookie-cutter properties.” ~The Points Guy

Despite the aggressive growth in branded hospitality, Independent Lodging Congress is unsurprisingly bullish on independents.

Many of the core brand value propositions have already been recreated by technology.  For example, a core value proposition that sways owners to go with a brand is getting access the brand’s distribution network.  The question is: as 5, 10 or 15 properties pop up near your hotel targeting the same customer under the same brand umbrella - is that distribution really more valuable than what you get on Expedia?

I was recently researching hotels for a trip down to Miami next month and I decided to check out which Marriott properties I could stay at with the goal of racking up some loyalty points.  While researching I couldn’t help but notice a big CTA on the booking engine “Select from 30 unique brands”.  

Dozens of Marriott franchisees compete with each other in a small Miami corridor

While that variety gives nice value to me as a booker, I couldn’t help but think about the owners of those properties.  There were even a handful of category 6 and 7 properties within just a square mile of each other and each of those owners was competing for the same exact business.

In other words, Marriott wins no matter which hotel gets booked but only one franchisee will end up winning my business.  I later realized that my Chase credit card gives me the same benefits as Marriott Bonvoy (6x points on travel) but also gives me the flexibility to stay wherever I’d like - further obfuscating the value of the brand beyond the quality and vibe of each individual property.

This isn’t to say that brands don’t have value because they certainly do; however, the value of being in a branded franchise has definitely changed for hotel owners and developers of late and that change continues to accelerate.  

From the consumer perspective we know that travellers want unique (non-cookie cutter) experiences as reflected in STR stats around independent ADR matching branded rates.  The explosion of “cookie-cutter” properties (i.e. Fairfield Inn types, not St. Regis and JW Marriott) resembles the explosion of cookie-cutter retail chains like Abercrombie & Fitch and Aeropostale which experienced rapid growth for many years before hitting a brick wall and needing to close thousands of locations in short order.

Further, independent hoteliers are no longer on their own according to ILC Chairman Andrew Benioff:

“All of the technology that has contributed to the leveling of the playing field vis a vis the big brands. There are so many technology solutions available today at reasonable pricing that almost any owner or investor in the space can reproduce the results of having a brand and also have the flexibility to make their property unique.”

The Independent Lodging Congress fundamentally believes that big hospitality’s old boys club lead by middle aged white men has left the industry vulnerable to disruption and that progress is coming from the outside and with upstart independent boutique hotel developers such as Bunkhouse and Sydell Group.  

"If you look at the largest hotel firms out there, both public and private, they are run primarily by middle aged caucasian men. Only in the last 5-10 years has this begun to change. I think that this is why we have been really slow to change. If you look at the rest of society here in the US, most of the population doesn't look or act like this group of leaders. We are slowly evolving to bring in new leaders which include more women, minorities and LGBT members. This will greatly assist with the appetite for change."

ILC is a champion of diversity, both diversity of thought and culture.  ILC’s programming is unique in that many of the speakers are from outside the industry.  Between the diversity of programming and content, it’s safe to say that ILC isn’t your grandfather’s hotel investment conference and is definitely worth checking out.

We sat down with ILC Chairman Andrew Benioff to talk about his vision for the future of hospitality and what the industry can achieve by thinking outside the box and bringing new ideas from the outside to disrupt from the inside.

What was your background prior to starting ILC?

I began my hospitality career as  formal apprentice in a traditional Japanese Ryokan in Atami Japan. I then continued with my career with a number of luxury hotel brands in the states including The Ritz-Carlton Hotel Company and Nikko Hotels International among others.

After attending conferences for years in both the hospitality and real estate finance industries I felt like there was a real dearth of interesting content. Most people attended simply to network and book meetings with others. I really felt like this was a shame and that these gatherings should of course be about connecting with others and transacting but also be  a place of discovery, learning and hopefully lead to "ah-hah!" moments as well.

A travel tech startup founder is reading this article and you have 3-5 sentences to convince them that ILC is a great place to network with top independent hoteliers.

I'd actually prefer to flip this around and try and convince people NOT to join us if they want: 1-the same old canned content, 2-are content in what they know and don't need/want to learn, 3-aren't ready to be challenged and 4-don't believe that people outside of our industry have anything to teach us.

Why is ILC starting to become interested in tech startups? Why did you decide to create the startup pitch event?

We are not only interested in technology, and don't believe that all successful travel/hospitality start-ups have to be tech focused. We do believe though that all industries need to evolve and hospitality is no different. These new companies are discovering areas of improvement for the industry and as provocateurs for the hospitality and travel industry, it's part of our mandate to highlight these efforts.

ILC features a lot of non-hotelier programming, what are some of the biggest lessons that hoteliers should be taking from other industries today? What are those industries that are innovating ahead of hotels?

One of the reasons that hospitality has been so slow to evolve is its focus on doing the same old thing year after year with a spotlight on the same old industry "leaders". In actuality these "leaders" are uninspiring and do the same old song and dance continuously without any evolution. Looking outside of our industry to the disruptors in society, art and culture allows us to see where there is room for improvement and where our guests are focusing their energy so that we can then serve them better.

What are the biggest changes that are happening right now specifically within the independent hotel market?

I think that one of the biggest changes is that more and more developers and investors are realizing that with the advent of many new technology platforms, the big brands have less leverage with the customer and more and more travelers are looking for original hospitality experiences. I see more high quality Indie Hotels arriving in the market in the coming years and those that finance and invest in them becoming more comfortable in including them in their portfolios.

Chip Conley (Joie de Vivre) and Liz Lampert (Bunkhouse) speak at ILC 2016

What is the most interesting or innovative technology that you've seen in hospitality over the last couple of years?

All of the technology that has contributed to the leveling of the playing field vis a vis the big brands. There are so many technology solutions available today at reasonable pricing that almost any owner or investor in the space can  reproduce the results of having a brand and also have the flexibility to make their property unique.

What's one commonly held belief that most independent hoteliers believe to be true about technology that actually is false? Please explain your reasoning.

As I mentioned above I think that there is a long held belief that you can only be successful if you have one of the big brand flags on your property and all of the technology and booking engines that they provide. I think that today most, if not all, of those benefits can be reproduced for Indie properties without the massive fees that the brands charge.

What's one piece of advice that you have for any entrepreneurs looking to get into the hotel tech space given your understanding of the independent lodging market and buyer behavior?

I think people should ask themselves carefully if there truly is a market for whatever they want to build and if any of behemoth tech companies started to look at this space. I have seen many companies come up with wonderful ideas only to be blown out of the water by the giants. I've also seen many who think there idea is great but there isn't as much of a need for their product as they think. Perhaps spend a bit more time speaking with consumers before going to far so that you can verify demand.

Hoteliers historically have the stigma of being somewhat tech averse and slow to adapt, do you see that mentality changing?

If you look at the largest hotel firms out there, both public and private, they are run primarily by middle aged caucasian men. Only in the last 5-10 years has this begun to change. I think that this is why we have been really slow to change. If you look at the rest of society here in the US, most of the population doesn't look or act like this group of leaders. We are slowly evolving to bring in new leaders which include more women, minorities and LGBT members. This will greatly assist with the appetite for change.

Is technology more or less important for independent hotels (vs. branded)?

Equally as important I think. No matter what type of property you are running exploiting any advantage is paramount and technology tops that list.