Independent hotels face competition from big brands and Airbnb

This should be the heyday of independent hotels, which by their very nature offer the distinctive experiences sought by many travelers.

Instead, they are up against huge hotel companies with deep pockets as well as competitors on Airbnb.

The result? More independent hotels are either joining the big chains or shutting their doors.

Thirty years ago, about two-thirds of all hotels were independent, according to the hotel data company STR. Today, independents make up fewer than 40%.

One of the biggest reasons that independent hotels are disappearing is that they are being acquired by the large hotel companies or joining them as affiliates to tap into their marketing power.

Accor had 3,600 hotels and 14 brands in 2013. Now, through acquisitions and investments in other lodging companies, it has nearly 5,000 hotels under 39 brands. Marriott International's boutique brands keep their identities but have access to Marriott's reservation and marketing resources.

Radisson Hotel Group, based in Minnetonka, has eight distinctive hotel brands and more than 1,400 hotels in operation or under development.

There is also significant competition from Airbnb, said Jeffrey Low, founder of Stash Rewards, which offers a loyalty rewards program for independent hotels. Airbnb is adding inventory to the alternative lodging market, attracting customers "who might otherwise choose an independent hotel," he said. That drives down the prices independent hotels can charge, Low said.

Independent hotels with strong established positions in their markets are the most likely to reject offers to join a larger group.

Barbara Malone, an owner of the 110-year-old Hotel Sorrento in Seattle, said the key to success for the independent hotel that she owns with her husband has been to "stay true to the hotel's DNA as a community builder," offering music and literary events and serving their core customers including families coming to the area for medical treatment.

Still, she said, it's becoming more challenging to operate as an independent hotel. "The major brands can approach corporate clients with a large portfolio and a range of prices," she said. "That's stiff competition."