Q&A: How Global Hotel Alliance Has Empowered Independent Hotel Brands for 20 Years

This sponsored content was created in collaboration with a Skift partner.

In today’s competitive hospitality landscape, finding cost-effective ways to reach customers is a persistent challenge, especially for independent hotel owners. To compete with larger chains with deeper pockets and globally recognized brands, owners must improve operational efficiency, make strategic decisions that align with their business goals, and understand the cost of customer acquisition for each distribution channel. 

Global Hotel Alliance (GHA), a collection of 40 independent hotel brands with more than 800 hotels in 100 countries, helps hotels meet these challenges and enhance profitability. 

As GHA celebrates its 20th Anniversary, SkiftX spoke with CEO Chris Hartley about what makes the GHA model different, how independent brands can optimize their distribution strategy and keep up with the rapid pace of technological change, and about becoming the world’s largest collection of independent hotel brands. 

SkiftX: Why is an omnichannel approach important for hotel owners? 

Chris Hartley: Independent hotel brands generally receive only a modest proportion of direct bookings, so maintaining a presence across multiple third-party channels is essential to drive new customer acquisition. Often, only 10 to 20 percent of bookings are direct for independents, with sometimes over 50 percent of bookings coming through online travel agencies (OTAs), which invest billions in marketing to capture customers.

However, those third-party channels are extra costly for independent brands, as they don’t have the scale of the big brands that can negotiate lower booking fees. Independent hotel brands may be paying as much as 20 percent commission — sometimes even more — on those channels, which most feel is a necessary cost of acquisition for new customers. However, this cost can often become the same for repeat bookings if those same customers don’t have an incentive to book direct for future stays, and thus continue to book through those third parties.

SkiftX: How does GHA help independent hotel brands shift to more cost-effective distribution channels for customer acquisition?

Hartley: GHA assists independent hotel brands in developing more balanced distribution strategies, reducing their dependence on expensive third parties. By understanding and optimizing the mix of direct bookings, partnerships, and third-party channels, they can achieve a more cost-effective and competitive approach.

For independent hotel brands, reducing their distribution cost on a third or more of their business from 20 percent to 5 percent creates significant savings. This is where GHA’s aggregated customer data and loyalty programs come into play, helping steer customers towards lower-cost booking channels, including brand-direct channels and GHA’s own website and app.

By leveraging GHA’s shared loyalty program, GHA Discovery, independent hotel brands can access new markets and customers they couldn’t reach cost-effectively as smaller brands. The GHA Discovery program gives a brand’s existing customers more reasons to book through direct channels — to receive loyalty rewards and benefits — while also providing hotels with significant levels of incremental “cross-brand” revenues coming from customers of the other alliance member brands, which can add over 10 points in occupancy at higher average daily rates (ADRs). 

SkiftX: What are the primary advantages of GHA’s loyalty program?

Hartley: A significant advantage of our program, GHA Discovery, is its scale and customer appeal. GHA Discovery encompasses 800 hotels, offering its now 28 million members a wide choice of hotels spanning over 100 countries and an eclectic mix of upscale and luxury brands. Luxury customers, in particular, appreciate the choice of authentic, independent brands they can choose from when staying around the world.

In recent years, we introduced Discovery Dollars (D$), a common currency that allows customers to earn and redeem rewards across the alliance. This cash-back-style rewards program is simple, transparent, and easy for both customers and hotels. Customers earn D$ based on their spend across the hotel — including room, dining, spa, golf, and other activities and services — which they can then use at any hotel within the alliance as a form of payment at one-to-one parity with the U.S. dollar, making the program versatile and its value transparent.

Our loyalty program also benefits from a growing network of partnerships, which expands how customers can earn D$, while reaching a whole new customer base. These partnerships include notable names like Regent Seven Seas Cruises and Plum Guide luxury vacation rentals. 

SkiftX: What technological challenges do small hotel brands face?

Hartley: Managing technology and distribution is arguably the most complex and costly area for independent hotels. Beyond distribution, managing customer relationships, pre-arrival communications, marketing, property management, billing, and business intelligence requires multiple layers of technology.

GHA helps independent brands reduce and streamline these costs through technology partnerships, such as with Oracle, a founding shareholder of the alliance. Oracle has assisted us in building a central platform that interfaces multiple brands, facilitating the recognition and rewarding of loyalty program members across the alliance’s 800 hotels. Additionally, we create best practice groups to advise hotels on suitable technologies, pricing, and compatibility, streamlining decision-making for smaller brands and leveraged buying, which creates significant cost savings.

While we do not mandate specific systems and vendors, hotels must integrate with our central platform to recognize customers effectively. This is achieved most seamlessly for hotels operating on the new Opera Cloud platform. 

SkiftX: How do you address hotel owners’ concerns about the rapid pace of technological advancements and their associated costs?

Hartley: Managing technology for independent brands involves several critical concerns: assessing the required strategic investments, choosing the right technology, and managing costs. GHA assists hotels in all of these areas. 

Owners often face pressure from tech vendors constantly pushing new products, such as AI tools or pre-arrival virtual tours. We help owners discern which technologies are genuinely beneficial, especially for those needing more in-house expertise or in-depth resources. By forming technology committees where IT experts from each hotel brand collaborate, we can share best practices and learn from each other’s experience while working with vendors to offer attractive pricing for our member brands.

SkiftX: How has GHA evolved over the past 20 years to support independent hotel brands in a competitive market? 

Hartley: GHA’s core principles have remained constant over the past 20 years, enabling smaller hotel brands, mostly owner-operators, to retain their independence while offering them the scale and expertise of a much larger alliance of like-minded brands. 

These hotel owners and operators face similar challenges in a rapidly evolving hospitality landscape, which has significantly evolved over the last two decades, in particular with the growth of OTAs and the expansion and consolidation of hotel loyalty programs run by the global majors. And so, while consumers still seek the different and often richer experience that an independent hotel brand can offer, those brand owners need to compete with the OTAs and mega-brand loyalty programs to gain market share and maintain an affordable acquisition cost.

GHA’s approach has been to consistently advocate the benefits of collaboration. Despite potential challenges from market shifts, GHA aims to continue its mission of providing a platform for independent hotel brands to maintain their autonomy and thrive in an increasingly competitive and costly environment. The alliance’s focus on aligned interests among independent hotel brand owners will remain the key to its ongoing growth and success.

For more information about membership in GHA, visit Global Hotel Alliance. To learn more about GHA’s loyalty program, visit GHA Discovery.

This content was created collaboratively by Global Hotel Alliance and Skift’s branded content studio, SkiftX.