Franchise Spotlight: Hotels
We look at the pros and cons of a hotel franchise- either running a hotel or an online hotel booking platform – both with a booming marketplace.
Trusted franchises account for such a big – and growing – share of the marketplace. A reliable brand promises high standards for bed quality, noise insulation, cleanliness, service and facilities. Many of these brands operate to a franchise model.
Well-known franchise brands include Travelodge, Hilton and Wyndham Hotels & Resorts.
However, hotel franchises also encompass hotel booking services or travel agencies. Online booking has reshaped the industry and low-overhead online operators have flourished by taking fees from hotel operators.
- £20bn revenue sector with annual growth of 3%
- Hotel chains – many of which are franchised – occupy a large and growing share of the market
- Occupancy rate in the UK is 77% and
averagedaily room rate is about £87 at time of writing
- Hotel booking franchises typically offer low start-up costs, low overheads, home working and a favourable work-life balance
Attracting more than 39 million holidaymakers a year, the UK is the world’s sixth most popular tourist destination. Factor in the ‘staycation’ phenomenon – which hasn’t much abated since more Brits chose to holiday in the UK following the 2009 recession – and it’s easy to see the entrepreneurial attractions of the hotel sector.
Hotels live or die by their customer service and recognised brands have proven adept at maintaining consistently high standards.
The structure of hotel franchises
Buying a hotel franchise will allow you to benefit from training, ongoing support and the currency of a well-known brand. Support from the franchisor will also come in terms of marketing, insurance and compliance.
Benefiting from economies of scale and a large centralised budget, a franchisor can offer greater marketing reach – affording you ‘featured’ slots on booking platforms for instance – and quality facilities.
Hotels are expensive to build, set up and run. Becoming a
Other benefits include a central booking system and strong SEO which means that your hotel will feature high on hotel-related Google searches. Guests will also often directly seek out a trusted brand’s website.
A hotel franchise, which involves large premises, extensive facilities and a large staff, is more expensive than many franchises – but profits are potentially large too.
Online booking franchises
Often run from home, a hotel booking franchise can offer – in contrast to hotels themselves – low start-up costs (typically less than £10,000), low overheads and a great work-life balance.
The Travel Franchise , for instance, promises international travel, three pricing tiers and a tailored offering – whether you prefer a part-time home-based business or a larger operation run from high-street premises.
Its ‘Partners in Travel Programme’ purports to help franchisees “grow their businesses quickly and easily” by “recruiting local organisations like schools, businesses, clubs, associations and charities” and “offering a percentage of commission on all bookings in return for recommendations to their networks.”
Its many awards – including Jet2 Holidays Agency of the Year, Travel2 Agent with the Highest Growth and Travel2 Homeworking Agency of the Year for three years running – attest to a successful, rewarding business model.
Booking agent Hotels.tv, meanwhile, doesn’t require franchisees to have previous experience in the field. Franchisees, who can work from home, “book hotels for individuals, groups, events, trade shows, weddings, sports tournaments and more.”
Is a hotel franchise for me?
Being a successful franchisee means being willing – and able – to follow a tried and tested formula. This means adhering to proven processes, pricing, decor and other prescribed aspects of the operation.
Being a successful hotelier – franchisee or not – means being:
- Good with people – both staff and guests
- Willing to work evenings and weekends
- Versatile and effective at multitasking – keeping the bar well stocked and running smoothly, managing cleaning/staffing rotas, keeping on top of compliance issues like fire safety
- A decisive decision-maker, including delegating – there’s too much to do all by yourself
- Adept at recruitment – staff turnover is high in this sector and you’ll need numerous employees
If you are passionate about the hotel industry and you have the attributes to be a successful hotelier, this could be a great way to break into the industry with a tried and tested brand behind you.
Owning a hotel franchise will allow you to break into the market will a blueprint to follow for your business.
An online booking franchise is a perfect business for someone who is looking to work from home and become a business owner with relatively little start-up capital.
Although these two kinds of businesses are very different, becoming a