Embracing the Culture of Change in the Lodging Industry

By Steven Belmonte CEO, Vimana Franchise Systems LLC | October 28, 2008

When I started in the lodging industry more than 30 years ago at the age of 18 as the youngest general manager of a Holiday Inn, it was generally believed that the road to the franchising ivory tower was the straight and narrow. And at the time, that was probably true - as there were fewer big name hotels around, the travel industry was not as robust as it today, and the concept of capitalism had not reached global proportions of the 21st century. Franchising, in those days, was a new concept and was cautiously and steadily making the American dream a reality for young entrepreneurs.

While the lodging industry is not a new industry (after all, history has it that a very pregnant Mary and her husband, Joseph, needed to book a room at an inn back in the days), it is one of the originators that ushered in the concept of franchising. A franchise, by definition, is "a business established or operated under an authorization to sell or distribute a company's goods or services in a particular area." In essence, the franchisee is granted the privilege to attach itself to a brand's good reputation, name, and national recognition in efforts to garner better business in its local territory. For a large majority of people who decide to enter the franchising business, having a nationally, and even internationally- known brand behind them offers a sense of security. While franchising in the lodging sector has provided hotel owners with the security of managing a well-known brand, it has also provided consumers with a sense of familiarity and comfort while traveling.

However, in recent years, with the expansion of global business travel as well as a shift in leisure activities in which people are incorporating more vacation travel into their plans, the lodging sector has been feeling the pressure to meet the evolving demands of its guests and to change with the times.

Amenity Creep

Fast becoming a thing of the past is the simple demand for a room and a bed. In today's highly competitive market, hotels are vying to not only get a jumpstart on the latest trends but to offer the conveniences of home to their guests - such as late check-out, free newspapers, high-speed Internet access, free continental breakfast, comfortable bedding, name brand soaps and shampoos, game and video consoles, business and fitness centers, and frequent guest loyalty programs.

These offerings have started to place a squeeze on many franchisees. In order to keep up with the market demands and stay competitive, franchisors are requiring franchisees to pay for the changes in the industry - thus taking a big bite out of the entrepreneurial dream of being able to own a business and earn a living.

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