The market is becoming increasingly competitive for independent accommodation providers, with large hotel chains quickly adapting and OTAs investing to capture travellers. By tapping into developing trends, independent hoteliers can improve their chances of enhancing commercial success.
There’s no doubt that hospitality is undergoing remarkable change influenced by a number of factors, forcing the industry to reflect on how to respond and adapt in order to thrive.
Shifts in consumer travel behaviour and guest expectations are affecting service delivery both on property and across digital channels, while changing attitudes to work have had a profound impact on staffing and how to deliver enhanced guest experiences. At the same time, the acceleration of digitalisation is impacting operational efficiencies, with technology bringing automation and greater commercial insights.
While 63% of room capacity in Europe is provided by independent small and medium-sized hotel accommodation, the share of the independent sector has fallen by around 10% in the past decade. This trend is expected to continue as more private equity groups invest in accommodation and global hotel groups grow, meaning greater competition and more visible product disparity.
A recent report from H2C identified the key investments hotel groups are making to adapt their businesses, which includes the implementation and increased use of artificial intelligence (AI) throughout operations and commercial strategies, development of personalised loyalty programmes, expansion of ancillary sales, developing the tech stack with more automation, and addressing challenges with data utilisation.
It’s not all bad news for independent hoteliers. Last year, the boutique hotel market was estimated to be worth USD$9,962.60 million in revenue, and in the next 10 years the market is expected to grow to USD$19,415.50 million.
Today, efficient technology is essential to success, and there’s a need to adopt flexible cloud-based systems to respond effectively to the market and capture that market share. At HotelREZ, throughout our portfolio of more than 2,500 properties worldwide, we have identified the trends independent hoteliers can capitalise on to remain buoyant in the market:
Capturing bookings – improving cost of acquisition
Online Hotel Booking Behaviours
Online bookings are a key driver to securing occupancy and revenue. Without a direct booking engine and a network of OTAs, business will suffer. However, it’s essential to provide quality systems to aid customer satisfaction. Customers expect vital hotel information to be accurate and consistent. This includes the room rate, availability, and review ratings – all of which affect customer satisfaction.
H2C found that 42% of hotel bookings were made by mobile in 2023, rapidly displacing desktops. Furthermore,mobile is expected to account for half of all online bookings in the next couple of years. This shift towards direct bookings will result in less reliance on OTAs, backed up by Skift Research which predicts direct digital channels will be the dominant distribution channel for hoteliers by 2030 .
For hoteliers to maximise direct booking opportunities, it’s important to work with a booking engine partner, like HotelREZ REZBooker Booking Engine, that fully integrates with the existing tech stack. This ensures quality information and increases efficiencies and booking accuracy.
Enhanced Distribution with Global Distribution System (GDS)
Offering unparalleled distribution to more than 500,000 travel agents worldwide, the GDS showcases accommodation to a global audience, providing visibility and reach that is opening new opportunities for independent businesses.
With nearly 60% of hotel bookings worldwide made via the GDS, and more travellers craving unique experiences – from corporate executives to discerning luxury travellers – boutique hotels and accommodation providers gain greater attention through the GDS. The advancement of self-booking tools means business travellers can easily browse options to make informed decisions that meet their requirements.
Joining a travel consortia programme like World Rainbow Hotels offers enhanced visibility within the search results. The key advantage of the GDS is the integration of systems to provide a complete travel itinerary including flights, hotels, car rentals etc, offering distinctive simplicity for both travel agents and corporate bookers.
As GDS specialists, we have seen this channel grow immensely over the past couple of years, especially with the advancement of mobile-friendly booking solutions that leverage guest profiles to offer personalised experiences.
Standing out in the market
Targeting Foreign Markets
The world has changed since Covid. Today, there is a greater need to understand the traveller movement to develop strategies for capturing international guests and navigating challenges, such as cultural preferences or marketing localisation.
Where the Asian and Pacific market is still yet to return to 100% capacity (it was at 85% in 2024), the Middle East remained the strongest-growing region in 2024, seeing international arrivals increasing by an incredible 29% above 2019 levels. The changing interest in international tourism and travel also saw Africa welcome 6% more tourists last year compared to 2019. Europe saw minimal growth at 1%, and the Americas are still only at 97% of pre-pandemic levels.
While traveller numbers may not have grown impressively – it’s the spend that ultimately counts. In the latest international tourism expenditure reports, travellers are splashing the cash compared to 2019, especially among large source markets such as Germany (+35%), the United States (+33%) and France (+11%).
By understanding the high-value guest profile, independent providers can target specific markets to capture this spend and traveller groups from the right source markets. Through niche marketing campaigns, hotels can drive revenue and occupancy more efficiently.
Sustainability as a Differentiator
Today, people want to know their impact on the world. According to Deloitte, one in two consumers globally (51%) are worried or anxious about climate change, with 83% (Booking.com) of travellers confirming that sustainable travel is important to them. A third of travellers are motivated by the fact that sustainable properties treat the community better.
Promoting sustainability initiatives attracts eco-conscious travellers, appealing to 45% of travellers overall. Consistency is key, as two-thirds of travellers agree that booking sites should use the same sustainable certifications.
It’s not just leisure travellers this impacts – sustainability is a key issue for 65% of corporate travel policies, as hotels account for 30% of the emissions of an average business trip. The 2023 GBTA report found that three-quarters of travel buyers are integrating sustainability questions in RFPs. Last year, Green Stay hotels experienced a 35% increase in room nights due to its sustainable hotel booking option.
HotelREZ has partnered with Greengage to enable independent hoteliers and accommodation businesses to gain certification to market their sustainability initiatives. Through our retailing and marketing platforms, we showcase sustainable practices and offer customers the option to choose environmentally friendly accommodation.
Generating demand
Marketing and Online Advertising Budgets
In some ways, independent hotels have it stacked against them when competing with international hotel brands and the behemoths of travel – OTAs. For example, IHG secures 80% of bookings direct, and Premier Inn sole distribution accounts for 99%. Their deep pockets allow them to invest heavily in their brands, but also command the top search results.
When you look at the difference in marketing budgets, this becomes an incredibly daunting prospect for independent properties. Travel and hospitality marketing budgets increased to 8.4% of total revenue in 2024 – still below pre-pandemic levels. Hotels spend less than 2.5% of net room revenue on marketing, compared to 36% for Booking and 54% for Expedia.
It’s important, therefore, to maximise visibility by working in collaboration and being part of bigger brands that can drive that all-important traffic and visibility. Working with consortia programmes and soft brands like Elegant Hotel Collection opens up worlds of opportunity for capturing the right guest, without having to massively increase marketing budgets. At HotelREZ, we support hotels with a range of digital marketing programmes across SEO, Google Ads and PPC, as well as competitive listings on Metasearch and affiliate programmes.
Revenue Optimisation Through Dynamic Pricing
Dynamic pricing is becoming the hot blood of revenue success across all industries. This is the practice of strategically pricing products and services based on demand to continually maximise revenues, manage customer demand, and increase sales during quiet periods. We saw the controversial news headlines when Oasis tickets went on sale last year using dynamic pricing. But if done properly, you can get the right value for your product and ensure profitability.
Independent hoteliers and accommodation providers can massively gain from data-driven revenue strategies, and can see boosts in revenue by up to 15%. Getting control of pricing is key in capturing the guest(as per Trend 1, accurate and consistent information) – and 31% of small chains still have rate parity issues.
Acting on market fluctuations ensures hotels remain competitive, while providing the insight to improve forecasts to confidently drop prices during quiet periods and charge more when demand is high. Through all this data, hotels are getting a better understanding of booking behaviour. We use these insights to provide a tailored strategic approach to revenue management and business planning.
Data shaping the future
One common denominator between our 2025 trends is the necessity for data analytics. Through business insights, independent businesses can stay competitive, enhance operational efficiency, and provide exceptional guest experiences.
With a clear view of travel behaviour and an understanding of guest preferences, hotels can enhance marketing strategies while improving guest satisfaction and loyalty. More than 74% of hotels report using some form of data analytics to drive decision-making processes. In understanding the figures behind your hotel’s performance, you are able to maximise revenue and improve your bottom line.
Through the complexities of changes in our market, one thing that stands out from a recent report is that no hotelier can expect to do it alone. Support and consulting services are critical for 68% of hotel chains, with this level of consultancy remaining a stable requirement across the industry since 2020.
As one of the largest representation companies, we’re in prime position to support your independent hotel or accommodation business with the technology, consultancy and services for securing demand and generating profitability, even in difficult markets.