The hotel industry is undergoing significant changes as both major chains and independent properties engage in widespread restructuring, affecting corporate operations, individual hotels, and franchise owners alike.

Marriott International recently revealed plans to save $80-$90 million annually by restructuring its operations—an indication of the hospitality industry’s shift towards more streamlined and tech-focused practices in recent times. As reported by Smith Travel Research (STR), this strategic move mirrors a widespread trend within the industry as both established brands and independent hotels are downsizing their sales teams by 20-30% compared to staffing levels before the pandemic.

Luxury and boutique independent hotels are also making changes to their operations in line, with industry trends. Leading Hotels of the World has noted that nearly half of its luxury hotel members have implemented operational changes in 2024.

Top independent hotel chains that are implementing modifications comprise of the following:

• Members of Preferred Hotels & Resorts are working on incorporating shared service platforms.
• Luxury Boutique Hotels Worldwide are streamlining central reservation systems.
• Independent boutique collections are forming marketing cooperatives

Shifting to automated sales and operations systems comes with a cost but holds the potential for impressive returns in the long run as per a recent report from Deloitte focusing specifically in the hospitality sector; establishments that have adopted full-fledged digital solutions are witnessing a notable decrease in operational expenses ranging from 15-20%, within just a year and a half.

CBRE’s Hotel Horizon’s report highlights that properties using AI-driven revenue management systems have experienced a rise, in RevPAR by 5-7% compared to approaches with independent hotels reaping advantages from cloud-based solutions that were once exclusive to major hotel chains.

Boutique hotels are undergoing changes for the following reasons;

• The increasing expenses associated with distribution (OTA fees climbing to 25–30%)
• Challenges posed by a shortage of labour.
• Need for technological parity with branded properties
• Increasing guest expectations are on the rise.

Adjustments at the Property Level

Hotel proprietors and managers must consider several adjustments.

• Evolution of sales strategies
• Blend systems with interactions to enhance sales strategies.
• Create marketing plans tailored to individual properties.
• Emphasize utilizing booking platforms to decrease reliance on travel agencies (OTAs).
• Consider investing in property management platforms that work well with distribution channels.
• Implement contactless options for checking in.
• Utilize automated tools for managing revenue.
• Development of an alliance for hotels

There is a trend where independent hotels are coming together to form consortium groups. In their report, HVS Global Hospitality Services mentions that these properties are pooling resources, for shared services and marketing efforts. This collaboration has led to cost savings of around 15-20% in service areas.

Financial Forecast

The restructuring efforts are projected to deliver substantial profits:

• Corporate cost reductions: 15-20% over three years
• Property-level operational savings: 8-12% annually
• Technology implementation ROI: 25-30% within two years
• Savings for independent hotel consortium: 15-20% through shared services
• Small hotel group savings: 15-20% via shared services.

Jan Freitag, from CoStar Group, mentions that these adjustments mark a transition in the hotel sector since the emergence of online booking platforms. He notes that independent hotels are especially adept at embracing these shifts in their operations.”

Exploring the Significance of Boutique Brands

Boutique hotels are now more inclined to consider affiliating themselves under brands, as a compromise option for their business strategy. According to a report by Jones Lang LaSalle Hotels & Hospitality Group in 2024, there was a rise of 35% in the conversion of hotels, into brand entities indicating their desire to retain independence while benefiting from brand exposure and technological advancements.

For owners and investors, the message is clear: adapt or risk falling behind. The properties that successfully navigate this very important transition period, implementing new technologies while maintaining service quality, will likely see the strongest performance improvements in the coming years. Independent hotels must balance their unique identity with the operational efficiencies that restructuring can provide.