Why Hotels Are Choosing Independence Over Brand Affiliation

For decades, hotel brands represented stability, scale, and security. Affiliation offered global distribution, loyalty programs, technology systems, and operational guidance that independent owners struggled to replicate. But the hospitality landscape has changed. Access to demand, modern technology, and digital marketing tools is no longer exclusive to brand ecosystems. At the same time, rising fees and tighter margins are forcing owners to reconsider long-standing assumptions.

In this article, you’ll learn why ambitious hotels are reevaluating brand affiliation, the real financial and strategic costs involved, and how independence can unlock long-term competitive advantage.

The Price of Playing it Safe: Why Ambitious Hotels Are Choosing Independence

For decades, brand affiliation was the clearest path to security in hospitality. Brands offered what independent owners couldn’t easily access on their own: global distribution, name recognition, built-in loyalty programs, leading technology, and proven operational playbooks.

The equation was easy: Join a brand ecosystem and gain predictable demand.

But the conditions that once made brands indispensable have changed. Distribution is no longer locked behind brand gates, with OTAs, metasearch platforms, and direct booking tools giving independent hotels access to the same global demand. Technology is now more accessible than ever, and open platforms allow hotels to build modern tech stacks on their own terms. What was once a sharp divide between brands and independents has narrowed significantly.

At the same time, the cost structure of brand affiliation has gotten heavier and harder to justify in a low-growth market.

Even the promise of “brand security” has started to feel less certain. High-profile brand models like Sonder, which announced an ‘immediate wind-down of operations’ in November 2025, have caused owners to reassess their brand affiliation and consider whether sticking with a brand protects their future or limits it.

To understand why more ambitious hotels are reconsidering brand affiliation, you need to look at both the financial impact and the strategic opportunity cost.

The Cost of Brand Affiliation

Owners reevaluating their brand situation often ask themselves: What am I actually paying for?

This can be broken into financial and strategic costs.

The Financial Costs

Brand affiliation typically comes with a layered fee structure, including:

• Franchise fees
• Royalty fees (2-6% of gross room revenue)
• Marketing and technology fees
• Loyalty program fees
• FF&E reserves
• Property improvement plans (PIPs)

In 2026, RevPAR growth is forecasted to be as low as 0.6% according to CoStar and Tourism Economics. In an environment where topline growth is modest at best, every percentage point of margin matters.

When growth slows, fees have a greater impact. Capital obligations compete with reinvestment in demand generation and guest acquisition strategies.

The Strategic Costs

While financial costs are easier to quantify, the strategic costs of brand affiliation are less obvious but just as impactful.

1. Agility

Hospitality demand has become more volatile and fragmented over the years. Market conditions shift quickly, and teams are expected to respond in real time.

Brand approval layers and standardized processes can slow pricing updates, delay technology adoption, and restrict go-to-market flexibility. Adjusting rates, launching targeted promotions, or changing distribution strategies requires navigating brand timelines rather than responding to real-time market signals.

Independent hotels operate differently. Owners can use cutting-edge revenue management systems to dynamically adjust rates and launch targeted offers immediately based on demand fluctuations. They can turn distribution channels on or off based on performance triggers, rather than long-term brand commitments. They can adopt new guest-facing technologies — such as digital keys or real-time guest communications — as soon as they see value, rather than waiting for system-wide approval.

2. Creativity

Revenue performance increasingly depends on differentiation.

Brand consistency can limit positioning and experiential design, which affects pricing power. If a property looks and feels interchangeable with others, its ability to capture a premium ADR may be constrained.

This matters because modern travelers are placing greater emphasis on meaningful, authentic experiences. In 2025, more than half of global travelers in Booking.com’s report said that they are now conscious of the impact of tourism on local communities and want to leave places better than when they arrived, a shift that reflects demand for deeper connection and immersive stays.

Independence allows owners to take full creative control over the experience and vision for their property. That might mean building a website that tells a compelling story about place and people, reimagining underutilized spaces, like turning a former business center into a coworking lounge, or curating partnerships with local businesses. It also opens the door to social storytelling that highlights the human side of a hotel, from chef-led tasting nights to cultural tours with traditional artisans.

3. Strategic Flexibility

Perhaps the most overlooked cost of brand affiliation is the loss of strategic flexibility. Brands often prescribe preferred vendors, mandated technology, and centralized commercial strategies, giving operators very little left to work with.

Over time, those constraints limit experimentation. Owners may find it difficult to pilot new tools, explore alternative distribution channels, try new pricing strategies and marketing campaigns, or rethink operational workflows. Innovation becomes incremental rather than adaptive.

Independence restores flexibility. Owners regain the freedom to play around with automating workflows to reduce labor strain, test emerging distribution platforms, and adopt new technologies as soon as they see value. Instead of committing to a single prescribed roadmap, independent hotels can iterate to see what combinations of workflows and technologies work best for their team and guests.

There is more responsibility that comes with that freedom. But for ambitious operators, the upside is greater as well: the ability to challenge the status quo and build a business that reflects their long-term vision.

Why Ambitious Hotels Choose Independence

Whether starting a business from scratch or thinking of deflagging, independence puts control back with ownership and the operating team. It removes the structural oversight of a brand and hands decision-making authority to the people closest to the business. For some, that feels scary. For others, it’s exactly the point.

In 2025, the independent lodging market alone was valued at approximately $281.7 billion, with projections suggesting a compound annual growth rate of 11% over the next decade, potentially reaching $800 billion by 2035. Independence has evolved from an alternative path into a significant and expanding segment of the industry.

Still, it comes with tradeoffs. Hotels that deflag will lose certain advantages, like:

• Access to a brand demand engine
• Built-in loyalty program reach
• Centralized operational playbooks
• Brand-controlled technology systems

But what they gain can be transformative.

When hotels step outside of a brand, they reclaim the ability to design a business that feels entirely their own. This could look like:

• A brand that people seek out, not just recognize
• Pricing strategically with bundled experiences, targeted packages, and dynamic adjustments
• Designing a guest journey that feels human and relevant
• Reimagining physical spaces as both experience and revenue opportunity
• Redefining loyalty around relationships, not points
• Choosing distribution intentionally, leaning into channels that drive revenue and fit your audience

What makes this all possible? Control over technology. Operators can build systems that align with their workflows and long-term vision.

The Biggest Risk is Standing Still

Independence isn’t about rejecting brands. It’s about rejecting the cost that comes with staying comfortable for too long.
Hospitality no longer rewards uniformity the way it once did. It rewards speed, clarity, originality, and the willingness to evolve before margins tighten further. The most ambitious hotels are choosing independence because they want control over their future and the freedom to build something that reflects who they are.

In a market where growth is modest and expectations are rising, the highest cost may not be leaving a brand. It may be standing still.

Choosing independence requires clarity, preparation, and confidence in your long-term vision. By understanding the financial and strategic tradeoffs, hotel owners can make smarter decisions and build more resilient businesses. Take time to evaluate your structure, align your strategy, and move forward intentionally.