The hotel franchise model: RIP
It’s dead, says Patrick Landman writing in ehotelier.com.
”The fees and costs are astronomically high, there are many rules to adhere to, and not enough freedom for own marketing initiatives,” writes the consultant and founder of xhotels.
The result is that more and more hotels are resorting to outsourcing to experts in hotel distribution and marketing to fill their rooms and other alternatives, “achieving astonishing results. Hence the franchise model as we know it is dead.”
He says the same complaints are being heard over and over again. He says:
“The fees, costs and commissions are too high, hurting the bottom line. There are many rules and restrictions. Freedom of own marketing initiatives is being limited. Money is wasted on brochures and old fashioned style marketing. Management is out of touch with reality and requirements of today’s market place.”
What is most striking, however, is that freedom of marketing initiatives by the individual hotels is being limited.
“Many franchise companies do not allow having their own Web site. I understand the need for a cohesive approach, but this goes quite far. Why not let hotels get creative, and inspire them to do more, to generate more bookings? Let them use your booking engine, and everyone benefits,” he says.
Some hotel investment companies that have both franchise and management contracts for properties say they have distressed hotels that went from 40 percent occupancy three years ago to below 30 percent this year.
So what is the added value of a brand or flag? Bring in business. But such a strategy “in the times of internet and web 2.0 where brand loyalty is rapidly on decline or even disappearing, is like a dinosaur which belongs in a history museum.”
He concludes:
“We need to change, if not your company will be extinct in the near future.”
By David Wilkening
David
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