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.