Press release

Individual hotels offer high quality at low prices

Press release of

Press release

Individual hotels are up to 15 percent cheaper than chain hotels +++ Affordable prices with no compromise on quality +++ Untapped savings potential for companies

Cologne – Cologne, January 24, 2017 – With an 88 percent share of the market, individual hotels form the backbone of the European hotel industry, and they often offer a better price/performance ratio than chain hotels according to results of a recent analysis conducted by HRS. An overnight stay in a three-star individual hotel costs, on average, 84 euro – that is 15 percent cheaper than in a chain hotel of the same category. In the four-star segment, independent hotels are ten percent cheaper. In the luxury hotel sector, the average price difference is eight percent.
Individual hotels: higher guest satisfaction but lower room rates
Chain hotels often incorporate a marketing and franchising fee into the room rate. Independent hotels, on the other hand, operate leaner structures and are usually run more efficiently – which has a positive impact on costs. As a result, they can invest more in facilities and services to ensure an equal or better quality of service despite their lower rates. Travelers appreciate the value for money and rate medium-sized hotels as high, or even higher, than large chain hotels. According to HRS’s analysis, the average rating for individual hotels is 7.48 out of ten, compared to 7.42 for chain hotels (three-star segment). In the four-star segment, individual hotels are on an equal footing (7.93) with chain hotels (7.92), despite the rates being ten percent lower. Only in the luxury segment do the chains score more highly (8.25) than the individual hotels (7.74).
Business travelers often still prefer chain hotels
In terms of sheer numbers, individual hotels dominate the global hotel market. In Europe and Asia, they are the very foundation of the hotel industry, with a market share of 88 and 95 percent, respectively. Yet, despite offering better value for money, they are still often overshadowed by the chain hotels when it comes to doing business with global companies. The reason for this is market fragmentation. The lack of transparency associated with medium-sized hotels presents a huge challenge for corporate travel managers when putting together their hotel portfolio. Therefore, in order to minimize the time and effort spent on negotiations, many companies are inclined to turn to selected hotel chains rather than negotiate with a multitude of individual hotels. However, by categorically disregarding the majority of the market in this way, companies are missing out on as yet untapped cost-saving potential.

Huge savings can be gained from embracing individual hotels
“At first sight, the focus on negotiations with chain hotels seems reasonable. But by including individual hotels in the discussion, companies can make huge savings on room rates and, at the same time, meet the needs of their travelers more effectively,” explains Dirk Schmidt, who is responsible for corporate business in central and northern Europe at HRS. HRS has listed around 180,000 individual hotels in its database. With the Intelligent Sourcing solution, HRS takes care of the central negotiation of corporate rates – on behalf of its customers – also includes owner-operated hotels in the corporate customer hotel program. Following a customer needs analysis, HRS invites suitable hotels to submit a quote via a proprietary platform. For travel managers, this service represents a significant time saving, because all they need then is a contact person; for the hotel business – and the independent hotels in particular – it opens the door to global business with international corporate groups and enables the smaller hotels to compete with chains.


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Breslauer Platz 4
50668 Köln
North Rhine-Westphalia

ITB Berlin 2018

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