NEW YORK (CNNMoney.com) — When you’re staying at a hotel, would you like a pet goldfish to keep you company? Or perhaps warm cookies at bedtime to help lull you to sleep?
While the hospitality industry is largely dominated by big chains, some small-business owners have managed to thrive by attracting customers hankering for more than just a place to stay.
When Emanuel Stern and his brother, Leonard Stern, opened the SoHo Grand hotel ten years ago in downtown Manhattan, the odds of success were not in their favor. In addition to stiff competition from many hotel giants in New York City, the Sterns also faced opposition from residents in the neighborhood around the hotel, who vehemently objected to the potential for increased congestion in the area.
But they forged ahead anyway and now business is booming with an occupancy rate near 90 percent, even with room rates starting near $400 a night. They have since opened a second hotel nearby.
“We were able to make the entrepreneurial decision to build a hotel in SoHo,” Stern said. “A big hotel company would never have taken that kind of risk at that time,” because back then, the hip neighborhood had small boutiques, restaurants and art galleries, but wasn’t a place for tourist hotels, he added.
Stern credits their success with the ability to be “more nimble in terms of policy changes” and employ fresh ideas, like greeting guests with cold towels scented with rose petals on hot summer days or providing a complimentary pet goldfish on request, without having to go through a lot of red tape.
“The fact is that we do our things our own way,” he said, noting that “we can accommodate unreasonable requests.”
Leigh Hitz, president of The Magnolia Hotels, which has locations in Denver, Dallas and Houston, agrees that it’s tough for small independent hotels, which can’t spend as much on marketing or advertising as the big chains.
The first of the three Magnolia Hotels opened in Denver in 1993 and faced stiff competition from local branches of national chains such as Starwood Hotels & Resorts (Charts), Intercontinental Hotels Group (Charts), Hilton (Charts), Marriott International (Charts) and the Four Seasons (Charts).
But Hitz said the hotel not only survived but thrived – revenue and operating profit are up 15 to 20 percent this year – thanks to their focus on direct sales and one-on-one relationships with clients.
“With a small hotel, there’s a face behind the name, Hitz noted. “Our clients can call me directly and they know that.”
In addition, the Magnolia has managed to carve out a place for itself among competitors with innovative touches like warm cookies and milk served every evening.
Mike Amery hopes he and his wife, Lynne, can do the same. Last year they turned their house into a six-room inn, which has since been awarded a number of accolades, including being named one of the top 10 most romantic inns by American Historic Inns.
But Amery knew luring customers away from the nearby high-end hotels in Philadelphia to their Inn at Bowman’s Hill, which is in the Philadelphia suburbs, would be a challenge. From the start, then, he set out to create a more unique experience that could not be duplicated by larger chains.
Amery hired a PR firm to help define their image as a romantic retreat and added offerings such as in-room massages and breakfast in bed.
As a former executive with Bristol Myers, Amery also employed his big-business experience designing advertisements, creating a web site and keeping expenses in check.
“Having had big-business experience has helped immensely,” he said.
In the end, though, he believes his success will be determined by “personal attention, being on the ball, attention to detail and consistency of service.”