Is a hotel franchise worth it?

Martin Hendricks

Founder & CEO, Black Label Hotels

“we think it's better to franchise because the distribution that chain brings is a lot better than what we could achieve ourselves ... what is a guest willing to pay for a room under one of these brands ... And what is a guest willing to pay for an unbranded property? And the difference between that is called brand margin. ... if the gap exceeds your franchise fee, it's happy days.”

Isaac J. Collazo

Vice President, Analytics, STR (Smith Travel Research)

“Certain brands do better in location a versus some others do better in b, c, d. ... So knowing the strengths of the brand you have and then knowing what the needs of that location or that market, whatever you wanna call it, are and matching that up. And I think that's what successful developers and owners do. They match up the right brand with the right market at the right location.”

Théodore Boschmans

Hotel Broker, Christie & Co

“Is this the right brand for the hotel where it is currently located? Sometimes we are looking to maybe change the brand, sometimes the current brand is good enough and if somebody would like to get out of a franchise agreement, it's possible, but then this person needs to pay. Either you wait until it ends or you pay 3x what you paid last year, usually.”

Clare Anna Gamon

Chief Commercial Officer, London Rock Partners

“historically, hotel management agreements, which is, you know, how we contract with our clients, have always been very long term, twenty years, and they normally run-in parallel to a franchise agreement. So you agree to be a Hilton for twenty years, and then you agree to work with a management company.”

Bart Hilgers

Founder, Six Stars

“There's a big dependency for independent hotels. It doesn't make sense, but independent hotels are very much dependent on OTAs, on big corporate chains, hotel chains with massive loyalty programs that you do not have as an independent.”