The Rules of Franchising are Changing

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

Maybe not yet, but I predict soon, the stodgy, old hotel franchises with the "our way or the highway" mentality will be a thing of the past. They will be as useless, and broken-down as the coin-operated vibrating beds that were once popular at hotels and motels across the country.

With the advent of the Internet and advanced technology, hotel membership brands and new, loosely structured franchises are flourishing. Third-party websites, Global Distribution Systems, and strategic alliances allow these new hotel companies to operate at a fraction of the cost of a typical franchise.

First, let me give kudos to one of my closest friends and hospitality colleagues - Mukesh "Mike" Patel. Mike is widely known throughout the industry for introducing the industry's pioneering "12 Points of Fair Franchising" during his chairmanship of the Asian American Hotel Owners Association (AAHOA) in 1998-1999.

In March 2007, Mike and his brother R.C. Patel, both veteran hoteliers, purchased the Budgetel brand from The Blackstone Group to create a new entity: "Budgetel Franchise System." The new upper-economy brand, which will consist mostly of conversions and new construction since there are no Budgetel properties operating in the United States, will become the hospitality industry's first minority-owned hotel franchisor.

Industry sources say that the new franchise organization was purchased to "spark an evolution for fair franchising throughout North America." The goals for this new entity include franchisee participation in brand development plus responsible, controlled growth to ensure long term value.

In a recent press announcement, Mike was quoted as saying: "Our first and most important step is to implement a superior infrastructure that can properly serve the new franchisees we are now actively pursuing . . . We're going to give franchisees a unique opportunity to control their own destiny - by owning their property and also by being partners with us in owning the brand. In other words, now they can really own their present and their future."

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.