NEWPORT BEACH, CA—On Jan. 29, 1968, 12 independent U.S. hotels that felt they could compete better and more effectively with the big chain hotels in their backyard by cross-selling, marketing and promoting each other, leveraging their uniqueness and power as a collective, formed Preferred Hotels & Resorts. Now celebrating its golden anniversary, the company has transformed well beyond its humble beginnings—with plans for more.
In its initial phase, the company was run as a co-op referral organization with the hotels owning shares in the company. Fifty years later, the company represents more than 700 hotels, resorts, and residences in 85 countries across five distinct collections.
“It is an incredibly exciting milestone for the company,” said CEO Lindsey Ueberroth, whose family purchased the company 14 years ago. “It shows our commitment to the independent hotel space and gives us an opportunity to celebrate our heritage, our love of travel, our hotel partners, travel partners and guests. We feel younger and more nimble than ever and are looking forward to the next 50 years.”
Ueberroth said that the anniversary highlights the lasting appeal of the independent hotel experience. “Despite changes in the way people research, book and consume travel, there is no question that consumers have shown a continuously growing desire for the type of authentic travel moments that only independent hotels can truly provide,” she said.
This appeal is evident with many of the larger hotel chains looking to capture that independent spirit via soft branding, such as Marriott’s Autograph Collection and Curio Collection by Hilton. “I believe that all of the competition is nothing but positive and that the climate has never been better for independent hotels,” she said. “However, we believe that this additional competition validates what we have been doing for 50 years. Our portfolio of 700 hotels and our legacy of being the champion of the independent hotel experience gives us an advantage against the big chains because it is what we have always done—not just something we decided to do to capitalize on a trend. Our business model is also very different than what the chain’s ‘independent’ collections offer, from our contracting process and our pricing model to our on-property branding requirements.”
Ueberroth also believes that the prominence of the independent hotel space has produced a large number of de-flags. “Hotels [are]choosing to break free from their affiliation with a big brand—even their soft brands—to go the independent route with someone like Preferred Hotels & Resorts as their partner,” she said. “I believe more and more hoteliers are seeing the appeal of the independent space and forgoing the big brands altogether, despite the introduction of so many new options.”
In the past four years, Preferred Hotels & Resorts has added 33 hotels that have de-flagged from hard brands such as Hilton, Swissôtel, InterContinental, Four Seasons, Radisson, Ritz Carlton and others. “These hotels chose to go independent and join Preferred because they saw the appeal of our model, specifically as it relates to performance we can help drive, costs and flexibility,” she said.
In a similar vein, Ueberroth thinks that Airbnb has also helped draw travelers to the independent hotel space. “Much of Airbnb’s success is based on consumers seeking one-of-a-kind and authentic experiences when they travel and also looking for the live-like-a-local feel that inherently comes with staying in a residence,” she said.
In the last four years, the company made a number of changes to how it operates. “We launched Preferred Residences to attract guests that are looking for the residential experience, but want the security, comfort and services of a luxury hotel stay,” she said. “Three years ago in March 2015, despite the proliferation of soft brands, we made the bold decision to go the opposite direction by moving from a house of brands under the Preferred Hotel Group umbrella—Preferred Hotels & Resorts, Summit Hotels, Sterling Hotels, Sterling Design and Preferred Boutique—to one master brand, Preferred Hotels & Resorts, with five distinct collections—Legend, LVX, Lifestyle, Connect and Preferred Residences.”
Ueberroth said that, through its five collections, the company can offer guests a combination of the hotel and Airbnb experience. “Because each of our hotels is truly authentic to its destination, travelers can have that experience, but with the safety and security of a brand backed by quality assurance. Our Preferred Residences collection was designed as a solution for the leisure, family or corporate traveler that wants the local vibe and space of a residence, but with the services of a hotel,” she said. “I think Airbnb has also pushed the hotel industry to look at how we use technology and content to drive booking decisions.”
The future looks bright for the company, which welcomed 103 new hotels in 2017, including The Dominick in New York City and Hotel Xcaret in Playa Del Carmen, Mexico. “Looking ahead, we are focused on growing our portfolio globally, which includes a focus on the Preferred Residences collection, so the Preferred brand is present in every market where travelers want to be. We are also looking for new and innovative ways to service our partners, which include hotels, the travel community and loyal guests staying at Preferred Hotels & Resorts properties around the globe,” said Ueberroth.
A hotel consulting division was recently launched to provide additional services that extend beyond the usual scope of services offered to its member hotels as a way to support their individual business objectives and aspirations. “We are also constantly keeping our eye out for potential acquisitions, looking at technology, businesses or services that complement what we do and would drive more value to our partners,” she said. “We look forward to continuing to evolve and mature while remaining true to our foundation as a hospitality company that is committed to inspiring travel and the independent hotel experience.” HB