Unlocking Success in the Hotel Industry: The Power of Hotel Franchising Model
In the dynamic world of the hotel industry, there are two key strategies that hotel owners often consider: hotel franchise and full management. While both have their merits, let's shine a light on the advantages of hotel franchising which is growing in Asia.
What's a Hotel Franchise?
Think of it like this: you've got a fantastic hotel property, but you want to tap into a larger brand's reputation and resources to boost your business. That's where hotel franchising comes in. You partner up with a well-known hotel brand, like Hilton, Marriott or Accor, and voila! You're now part of their family, reaping the benefits of their established name while still calling the shots at your property.
The Benefits of Franchising:
- Brand Power: One of the biggest draws of hotel franchising is the instant boost to your hotel's reputation. Guests trust established brands, which means more bookings and minimizing the risk.
- Marketing Muscle: When you join a franchise, you gain access to their marketing machinery which speedup the launch, but it is worth noting that the Franchisor will charge you for the brand marketing with the cost allocated towards the brand and not your specific hotel.
- Reservation Systems: With a franchise, you plug into their reservation network, making it easier for guests to find and book your hotel. Additional, franchisor may have secured lower commission rate from major OTA’s which independent hotels will not obtain.
- Flexibility: Unlike full management contracts, where you surrender control, franchising allows you to maintain some level of autonomy while still benefiting from the brand’s resources. However, bear in mind that franchisors typically select franchisees carefully and may require engagement with a third-party operator to manage the hotel on your behalf.
Why Franchise Over Full Management?
While full management has its perks, there's something special about the freedom and support that comes with franchising. Here's why it might be the right choice for you:
- Ownership: With franchising, you still own your property, giving you a sense of pride and control over your investment. Sense of Ownership is Asia is stronger comparing to American and European companies who primarily view their hotels as investments.
- Higher Profit: Franchising typically drive higher profitability through a more effective and leaner management style, especially when compared to full management contracts. This often succeeded by working with an experience third-party operator, making the hotel franchising model appealing to many owners.
- Local Flair: You get to infuse your hotel with your unique personality and local charm while leveraging the brand's global appeal – it's the best of both worlds.
In the competitive world of hospitality, hotel franchising offers a pathway to success, blending the strength of a recognized brand with the freedom to run your property your way. So, if you're looking to unlock the full potential of your hotel, consider the power of franchising – it might just be the key to your next level of success.
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Sky Lobbies, a Genius Design or a Logistical Nightmare?
Sky lobbies have slowly begun to find its footing within hotel brands around the world like Marriott, Hilton, and Accor to name a few; as they all at some point, have included sky lobbies into their operations. The concept of a sky lobby itself is a great example of current paradigm shifts in how a hotel can operate their lobbies. Many hotel owners and hoteliers alike have turned towards Hotel Consultancy and Hotel Management firms to determine whether a sky lobby is worth investing in. Although at first glance, sky lobbies seem like the way forward in the eyes of hotel management, not only in providing a unique arrival experience but panoramic view as well; it’s also important to understand the caveats that come with a sky lobby. Weighing the positives and negatives is crucial for hotel management consultancy, especially in understanding new trends in hospitality.
Pros:
- Maximizing space efficiency: As the price of land within city centre's skyrocket, hotels nowadays have to rethink about their GFA and how best to use it when optimizing their revenue. Thus, by shifting their lobby to an upper floor allows hotels to use their ground floor for retail spaces or additional F&B outlets to better increase their revenue streams by taking advantage of the increased foot traffic.
- Appealing to aesthetic: Traditional hotel lobbies nowadays are often seen as bland and soul-less spaces; however, sky lobbies allow for guests to enjoy beautiful vistas of city skylines.
Cons:
- Congestion Nightmare: Although sky lobbies can be aesthetically pleasing, they can also be a disaster to the service-scape of the check-in process, as hotel management would need to deal with various logistical issues when handling large group arrivals. Although sending up 3-4 guests to the sky lobby is easy, once you start to factor in corporate and travel groups of 20-30+ guests all coming at the same time; it’s already a logistical nightmare trying to check-in that many guests concisely and attentively within a traditional lobby setting. Now we can only imagine how much harder it is to deal with large groups when the lobby is not only 10 floors up but also only accessible by 2-3 elevators. Often leading to mass congestion and dissatisfaction as guests not only have their check-in delayed, but they must wait in long lines just to enter the elevator.
- Costly Upgrades: Building a sky lobby doesn’t come cheap either; from specialized elevators that must only lead to the lobby and should be fast enough to minimize congestion, to building an additional “lobby area” downstairs to accommodate guests. Factoring all these processes starts to greatly increase your financial expenditure spent on just your hotel’s lobby alone. Building a sky lobby has far more strings attached than one might realize, and that’s why it's quintessential to receive proper hotel consultancy so all your bases are covered.
- Disincentivizes walk-in customers: Another oversight many often forget with sky lobbies, is the confusion and intimidation factor that walk-in guests may experience when they can’t locate the lobby themselves and may get lost before they even find the check-in desk Moreover, there are likely far fewer walk-in customers for the hotel’s F&B outlets when they not only aren’t easily accessible to local foot traffic, but also hidden away in the upper floors of the building from walking passersby. Thus, resulting in a loss of huge opportunity costs.
PCL Hospitality is an independent hotel development consultancy and hotel management company in Thailand and Southeast Asia. Our in-depth knowledge and understanding of Thailand’s hotel industry make us the preferred hotel specialist for many hotel owners and investors. Our clients range from independent boutique hotels to international branded hotels. We guide clients through all stages, from feasibility, project management and design, to construction and hotel management, through post-opening by driving hotel performance and maximising return on investment.
At PCL Hospitality, we provide hotel consultancy, project management, hotel development, and technical services for owners to get it right from the beginning and ensure their plans are future-proof in terms of both function and design. Contact us here! or follow for more