Malcolm Gladwell’s book David and Goliath uncovered a common misconception about the story of the powerful giant versus the little shepherd. Gladwell notes that when you really understand the story, you’ll find that Goliath has several setbacks (his vision is poor, his armor too heavy), and David “sees” his opportunity to defeat the giant. Often what or who we perceive as the “powerhouse” is not so, and our ability to tap into our own advantages—to play our own game instead of the giant’s—will propel us ahead.
Frequently the big, branded chain hotels are dubbed the Goliaths of the hotel industry. The Davids? Everyone else… independents all the way to mid-sized chains, all the properties that don’t have the same powerful resources. As a result, much of the data and strategies that circulate are full of assumptions and trends based on big brands, which can skew our understanding of everyone else.
To Gladwell’s point, you must be able to see clearly and create your own strategies. To do so, you must understand not just where the market is going for your particular segment but also what data matters. The goal for independents and small to mid-sized chains is not so much to beat out Goliath as it to better understand David’s opportunities and assets.
Just the Facts, Ma’am
Next year hotel industry growth is expected to begin a slow down after many years of robust increases. Supply will outpace demand, a red flag signaling lower occupancy rates. There’s a big BUT for independents and smaller chains, however. In 2016, chain hotels reported 66.8% occupancy while independents reported only 62.3% occupancy. Classically, independents and small chains have had lower occupancy than big brands but, at this point, big brands have tapped out their occupancy growth while the smaller groups have not.
As Lodging Magazine reports, “The current strong growth rates for independent hotels are a reflection of the current part of the lodging cycle; it is not uncommon for independent hotels to report strong growth rates because branded occupancies are so high that it is difficult to achieve further growth.”
