the hotel, you’ re going to feel it every day. This is also true in the branded world, of course, but at least there you have your management company’ s central corporate structure to provide some balance.
OTA COMMISSIONS( ADVANTAGE: BRANDS) Branded hotels enjoy a double advantage here. First, they negotiate lower commission rates, typically 10 % to 15 % per booking versus the 15 % to 30 % independents pay. Second, they need OTAs far less: only 35 % of branded bookings come through OTAs, compared to 61 % for independents, according to Cloudbeds data. With the emergence of AI, however, the playing field is going to dramatically change, and the new winners will soon be revealed.
FRANCHISE FEES( ADVANTAGE: INDEPENDENTS) Franchise fees paid by branded hotels typically run 8 % to 12 % of rooms revenue, according to HVS data. Add the mandated FF & E reserves of 4 % to 5 % of revenue, and you get to a total of 12 % to 17 % of revenue in costs that independents don’ t encounter.
CLOSE TO THE CUSTOMER( ADVANTAGE: INDEPENDENTS) Independents have the advantage here— if they put in the time and the effort. At The
Boca Raton, we have a specifically trained team that reaches out to every guest before arrival— and I mean really reaches out. The goal is to curate the experience. What do they eat? What would they like in their rooms? Why are they coming?
A managed hotel could do this as well, but would they? And would it feel the same? You might get an automated email from the concierge team:“ We’ re looking forward to your visit.” But there’ s an advantage to actually calling and not just reading a profile that might be two years old. Would a branded hotel realize you’ ve given up wine and now you’ re on water?
When one of us says“ Welcome back” to a returning guest in person and actually remembers them, it goes a long way.
THE OWNER FACTOR: PERSONALITY, CAPITALIZATION, COMMITMENT( ADVANTAGE: BRANDS) At an independent property, one great( or not-so-great) owner is going to make a dramatic difference. If your owner is strapped for cash, or has a challenging personality, or lacks full commitment to
THE BOTTOM LINE Branded hotels represent some 72 % of the U. S. market, a figure that has held more or less steady for a decade, and that we independents have learned to live with. Yet despite that dominance, conversion activity appears to have slowed at least a bit, suggesting the remaining independents are there by choice, not by accident.
Financially, independent hotels often achieve better cap rates due to their flexibility and higher ADR and RevPAR, according to Mary Beth Cutshall, CEO of Amara Capital Group, as quoted in Hospitality Investor, while branded hotels can offer significant value in portfolio sales, she added, providing a cohesive and recognizable product to potential buyers.
Of course, scale works. The machinery is proven. But what guests remember, what brings them back, is rarely the system. It’ s the feeling that someone was paying attention. That a place had a point of view. That it belonged to somewhere, not merely to something. That’ s harder to build than a loyalty program, and it cannot be franchised. For those of us on the independent side, it’ s also the whole point.
May / June 2026 hotelsmag. com 45