Independent hotels are better positioned to compete with their branded counterparts because guest endorsements are a key to success, especially for independent hotels in Thailand, according to a study by Expedia Group and Unabashed Research.
The study found that price and guest ratings carry more weight than brand value as key attributes for hotel property selection.
Price was the most influential driver of hotel selection, as consumers prioritise value above all else when allocating their travel budgets.
Abhijit Pal, head of research at Expedia Group, said that while consumers want the best deal on travel bookings, their individual selections ultimately reflect their values.
"The consumer searching for a budget accommodation will look for the best value within their constraints, while someone with more disposable income may prefer a luxury option and be willing to pay more per night, but not more than they have to," he said.
Mr Pal said guest ratings have a strong influence on consumer selection, with a 72% chance a consumer will value guest ratings higher than a hotel brand.
In fact, consumers are willing to pay more for higher guest reviews, considerably more so than for more premium brands.
Participants overall were willing to pay more for a hotel with higher guest ratings: 24% more for a 3.9-rated hotel versus a 3.4-rated hotel, and 35% more for a 4.4-rated hotel versus a 3.9-rated hotel.
"Peer or guest ratings have essentially levelled the playing field for independent hotels, as more potential guests seek out third-party endorsements for hotel properties they are considering," Mr Pal said. "Independent hotels today can compete on a global scale with brands because distribution and technology enable them to compete and quality is within their control."
According to the study, the hotel's brand carries a slight advantage over other attributes, including remodel call-outs, room image and hotel ratings (stars).
Premium brands showed more influence on selection, with shoppers rewarding brands with some average daily rate premium, but not nearly to the extent that superb guest ratings do.
Although the study was based on US travellers, these insights are crucial for Thai hoteliers because the US is the No.1 feeder market for Thailand, according to Expedia Group data. US travellers are also considered high-value travellers, as they spend 15% more on accommodation than the average of other tourists.
Pimpawee Nopakitgumjorn, director of market management at Expedia Group, said the research results are telling.
"As guest ratings carry more weight than brand when it comes to making a booking, hoteliers, especially independent ones who don't have huge budgets for marketing, should focus on providing the best services to guests during their stay to gather more positive reviews," she said. "This ultimately helps hoteliers increase conversion and drive revenue."
