Competition and good policy


The solution for independent hotel owners


Starting or owning a business in an ultra-competitive market is no small feat. Independent hotel owners understand this firsthand because they must overcome the fierce competition from larger hotel chains and established brands that dominate the industry.


Luckily, in some instances, travelers crave the unique, personalized touch that privately owned boutique hotels provide. Thankfully, our free market provides a space for both household brand names and these small businesses to thrive.

Large brands, like Marriott and IHG, continue to offer independent companies buyout opportunities promising financial windfalls. However, independent hotel owners are aware that they have something those large chains don’t: a unique personality that allows them to stand out in a competitive market. Take Hotel Sorrento, for example. This independently owned hotel has been around for more than 110 years and continues to create meaningful experiences for visitors while holding true to its historical origin.

To be able to provide these coveted experiences and services, independent hotel owners rely heavily on policies that put their businesses first. The past few years especially have provided a winning drive for small businesses. The current administration has pursued policies that allow independent owners to take charge of their success. Profit margins for these companies are small, especially in comparison to the large name brands. So, effective legislating and less regulatory burdens are the oxygen they need to thrive.


One example of such a policy initiative is the 2017 Tax Cuts and Jobs Act that provided a victory for business owners everywhere and revived the economy. Just after celebrating the two-year anniversary of the passing of this bill, small enterprises are still basking in the positive results that the policy provided.

By providing small businesses with necessary tax cuts, this bill rewarded innovation, sparked job growth, and enabled wage increases while bringing unemployment in the leisure and hospitality to a record low since the turn of the 21st century.

But, of course, as with any industry, there are challenges.


Currently, small businesses are facing the consequences of an increasing minimum wage. Many hotels rely on entry-level workers to run the business efficiently and cost effectively. But since the start of 2020, 21 states have already implemented a minimum wage hike. While businesses want to be able to pay workers more – and many are already paying over the minimum wage – these added labor costs for entry-level jobs threaten employment opportunities and the financial viability of these
small businesses.

These additional labor costs, which are more easily implemented by large chains, are creating an uneven playing field for independent hotel owners. Additionally, with the rise of Airbnb and other short-term rental companies, boutique hotels are forced to compete with a new level of competition – one that also takes a personalized approach to lodging.


Although a source of concern, these obstacles are often needed to drive innovation and ensure businesses are striving to accommodate customers with the very best service. As the saying goes, a little competition never hurt anyone.

Independent hotel owners have their work cut out for them in a competitive market. But the support of smart policies that benefit businesses with smaller profit margins allow for them to remain unique and the perfect home away from home for all visitors.

Alfredo Ortiz is the president and CEO of the Job Creators Network.


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