In Brief: The Pembroke Inn’s recent financial results highlight how independent hotels can achieve strong profitability and operational success without brand affiliation, offering owners and operators an alternative to chain partnerships.
-
Guestroom at the Pembroke Inn, Toronto – Image Credit Cloudbeds
Tucked into the heart of downtown Toronto, Pembroke Inn is a 52-room independent boutique hotel that offers guests a more personal way to experience the city. Set between the character-filled neighborhoods of Church-Wellesley Village and Cabbagetown, the hotel places Toronto at its guests’ doorstep — from restaurants, bars, and cultural landmarks to the greenery of nearby Riverdale Farm. With many of the city’s best-known attractions within walking distance and easy access to public transit, Pembroke Inn combines the personality of an independent stay with the freedom to experience Toronto like a local.
Co-owner, Kevin Sit, never planned on becoming a hotelier, and without decades of hotel experience telling him and his team how things are supposed to be done, they’ve become comfortable questioning assumptions.
“I like the fact that we don’t know any better,” Kevin explains. “We say, ‘Let’s try it, let’s see what happens.’ If it doesn’t work, we pivot.”
It’s that philosophy that has led Pembroke Inn to challenge the assumption that a hotel needs a franchise behind it, and that it needs OTAs to fill rooms.
First, they left the franchise
When Kevin and his partners took over the property, they kept hearing that being part of a franchise was the safe choice. “How can you compete against all these other hotels?” Kevin recalls. “The consensus, the smart move, is that you always need branding.”
But the franchise was costing Pembroke Inn approximately $6,000 every month, and Kevin struggled to see what the hotel was receiving in return. So when the agreement expired, they decided not to renew.
Going independent immediately freed up approximately $72,000 a year, money the team could instead invest back into its rooms. “I can do a lot with $72,000 a year in upgrading a 52-room hotel,” Kevin says.
Small improvements began adding up. The team could choose where to invest, how to operate, and what would deliver the greatest value to guests.
When ‘good enough’ started costing too much
Pembroke Inn’s previous PMS was inexpensive, approximately $1,500 per year, but it was increasingly holding the hotel back.
Rate changes took time to update, double bookings were common, and the property’s website operated separately from its PMS — website reservations had to be manually transferred into the system.
The team evaluated several platforms, but it was Cloudbeds that stood out, bringing together the hotel’s website, booking engine, distribution, and property management.
“I think the deciding factor was that Cloudbeds are able to host our website, and that bookings are all simultaneously managed,” Kevin says.
Cloudbeds provided faster connectivity with OTAs while eliminating the disconnected booking process Pembroke Inn had previously managed between its website and PMS.
An experiment no hotel would volunteer for
In spring 2026, Pembroke Inn encountered a regulatory issue with the City of Toronto that temporarily prevented the property from listing on certain OTAs. For a hotel that had previously generated almost all of its bookings through these OTAs, it could have been catastrophic. “Consensus in the hotel industry would say, well, you’re sunk,” Kevin says.
Instead, Pembroke Inn adapted. Kevin contacted the Cloudbeds team to ask what they could do to generate more business directly if OTAs were temporarily unavailable, and the team suggested adding digital marketing tools including metasearch advertising, retargeting, and Hotel PMAX, on top of its Cloudbeds-powered website and booking engine.
The goal was initially just to limit the damage, there was no expectation that direct demand could completely replace the OTAs. Then direct bookings started racking up.
From almost 100% OTA to almost 100% occupancy
By August, Toronto’s high season, Pembroke Inn was again operating at close to 100% occupancy.
But where almost all of its bookings had previously come through OTAs, Kevin estimated that percentage was brought down to only 10–15% of current occupancy. The vast majority of bookings were now direct.
“This is almost like 80–90% direct booking activity,” Kevin says.
Even more importantly, the economics of those bookings were dramatically different.
During a typical July or August, Kevin says Pembroke Inn might receive an $8,000–$10,000 bill from just one OTA for post-paid commissions alone. Its most recent bill was approximately $400.
And that doesn’t account for commissions deducted before payment or OTA-funded programs that ultimately require the hotel to discount its rates.
Kevin estimates that during a high-season month such as August, the total difference in OTA commissions and related costs could reach approximately $60,000–$70,000.
Our occupancy is still up, and our RevPAR is still up to where it would typically be. I’m doing exactly the same business right now, but I don’t pay OTA commissions. – Kevn Sit
$263,000 in booked revenue — and visibility into what actually works
Pembroke Inn had experimented with Google Ads before Cloudbeds, but Kevin found it difficult to connect marketing spend with actual hotel revenue.
“You can see you’re getting a lot more site activity,” he says, “but you don’t know, am I just paying for clicks?”
With Cloudbeds, that relationship became much clearer. Instead of advertising existing separately from the hotel’s booking technology, Kevin could see marketing spend alongside the revenue it generated.
Over a six-month period, Cloudbeds digital marketing attributed approximately $263,000 in booked revenue to its campaigns.
Performance included:
- 11x ROI from metasearch advertising, generating approximately $86,000 in booked revenue
- 7.74x ROI from retargeting
- 7.24x ROI from Hotel PMAX
“We can see how much we’re paying in ads and how much revenue that’s actually driving for us, which is fantastic.”
And Kevin believes the impact extends beyond bookings directly attributed to advertising. Guests may encounter Pembroke Inn through an ad, continue researching, and later return independently to book through its website.
The metric that matters most to him is therefore much simpler, the hotel is full. “Just our overall revenue without OTAs is where we want it to be, so we’re very, very happy.”
Skip the front desk, send a text
Cloudbeds Guest Experience has helped the property modernize communication without adding unnecessary infrastructure to its older building. Instead of traditional in-room hotel phones, guests can simply text the team when they need something.
“You got a problem? Text us,” Kevin says. “Not having the room phone feature is actually improving the customer experience.”
That same simplicity extends to staff. Questions can be resolved without guests walking to reception or employees making unnecessary trips back and forth.
Post-stay surveys also give Pembroke Inn another opportunity to improve the experience. The team can collect feedback from guests, understand where improvements are needed, and encourage satisfied guests to leave public reviews.
Rather than losing contact with someone rushing out the door to catch a cab, automated follow-up gives guests another opportunity to share their experience once they are home.
For Kevin, these capabilities demonstrate the value of Cloudbeds beyond any individual feature.
“It’s helping all stakeholders,” he says. “The ownership, obviously, we’re seeing good results money-wise. It’s making the staff’s job way easier, and it’s making the guest experience way better. It’s a win-win-win.”
From OTA-dependent to OTA-optional
When Pembroke Inn regains access to its full OTA distribution, Kevin doesn’t expect to return to the old model. Before seeing the results, the team imagined eventually targeting something like a 50/50 split between direct and OTA reservations.
Now, Kevin is considering giving OTAs a much smaller share of inventory.
Some guests will always prefer booking through third parties, he acknowledges, and OTAs remain valuable distribution partners. But Pembroke Inn has discovered it no longer needs to depend on them for nearly every reservation.
“We’ve now discovered that we could save probably hundreds of thousands of dollars a year in OTA fees,” Kevin says.
Building an independent hotel on its own terms
Pembroke Inn’s journey hasn’t followed the traditional hospitality playbook.
Its owners became hoteliers almost by accident, they walked away from a franchise despite being told branding was essential, they replaced cheap software with technology that cost considerably more because the return justified the investment, and when circumstances forced them away from the industry’s biggest booking channels, they discovered a direct strategy capable of keeping the hotel close to full.
Through each transformation, their philosophy has remained consistent: question assumptions, invest where guests see the value, measure what works, and change course when something doesn’t.
Cloudbeds gives Pembroke Inn the connected technology to keep experimenting without sacrificing the fundamentals and for Kevin, the results have gone well beyond what he originally expected.
“Cloudbeds is really, really good. We’re really happy with it,” he says. “This is one of those cases where it’s actually exceeding our expectations.”
When asked if he would recommend Cloudbeds, he responds:
“I would recommend the software to another hotelier, just not a competitor that’s around the corner from me.”
About Cloudbeds
Cloudbeds is the hospitality management system built for ambitious hoteliers who demand more. The Cloudbeds platform unifies operations, distribution, guest experience, and revenue marketing, giving operators a breadth of tools to capture demand, grow direct bookings, optimize pricing, maximize upsell revenue, and act on real-time intelligence within a single system. Designed to scale with independent hotels, large hotel groups, and multi-property portfolios, Cloudbeds is trusted by tens of thousands of properties in more than 150 countries. Founded in 2012, Cloudbeds is recognized as a top Hotel Management System, PMS, and Channel Manager, and Best Place to Work, by Hotel Tech Report for eight consecutive years.
