Why independent hotels are thriving


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The data has spoken. In 2016, sweeping uptakes in occupancy, average daily rate, and revenue per available room revealed that independent hotel properties outperformed their branded brethren.

Now, we find ourselves at the point in the lodging cycle where the non-branded universe is showing stronger growth rates than the chains. This is excellent news for investors and owners of non-branded hotels.

To put this into context, brands and chains dominate the U.S. hotel industry. Of all available rooms, approximately two-thirds are chain-affiliated. The remaining third (more than 1.5 million rooms) are independently owned and operated. Growth rates for independent hotel supply increases were only 0.2 percent, compared to the total U.S. supply growth rate of 1.6 percent. Clearly, branded hotels continue to be more attractive to developers.

That said, in 2016, independent hotels showed an occupancy growth of 0.8 percent, ADR increases of 3.8 percent, and a RevPAR acceleration of 4.6 percent.

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