One of the first decisions in the hotel development or acquisition process can have a lasting impact on the success of the project: whether the property should be branded, and whether that brand should manage the property. The hotel’s brand will be a defining part of the profitability, image and value of the hotel, and there may be no other decision which has a greater effect on the future of the property. Similarly, the management of a hotel can enhance the value of the brand, protect the owner, or detract from the value of the hotel — by as much as a 50% swing.
The 3 fundamental questions
While a hotel owner will live with these choices for years – if not decades — owners and developers often fail ask three key, threshold questions:
1. Should the hotel be branded?
2. If it is branded, which brand?
3. And if it will be branded, should the brand manage the property?
We recognize that there are many voices in the decision. Lenders or other investors may be more comfortable when a hotel is branded, and may feel that a brand manager will better operate the hotel. Some investors may be predisposed to one brand or another (often based on personal experiences as a guest, rather than an owner), and may have preconceptions of the ability of hotel ownership to operate the property. However, even where these strong voices have input, the owner or developer should consider the pros and cons of brands and brand management. Read more
Published in: http://www.hospitalitynet.org
By: Robert E Braun