Choose a Hotel Brand that Fits
When opening a hotel or purchasing an existing hotel, it is crucial for owners to choose the brand that will best represent their hotel. Today’s market has more hotel brands than ever before in the hospitality industry. Each franchisor carries multiple brands under their umbrella and a few franchisors such as Wyndham or Choice Hotels International have more than 10 brands. This allows travelers to have a magnitude of choices when choosing where to stay, and it also allows owners to have options when considering which franchise they would like to invest in. We have compiled a list of questions and explanations that hotel owners should consider when searching for the right brand.
- What type of room do you have, what service do you offer?
You will need to decide which market segment your hotel is in. Many properties fall into the economy segment or mid scale and limited service segment. Economy properties are generally exterior corridor, and offer only a few amenities. Popular brands in this market are Econo Lodge, Super 8, or Motel 6. Mid scale hotels are generally interior corridor and have less than 100 rooms. They offer free breakfast, free wireless internet, fitness center, and a business center. This market segment has the most brands to choose from but the most popular are Hampton Inn by Hilton, Best Western, and Holiday Inn Express. Other market segments are Upscale with full service, Luxury, and Resorts. Properties in these segments offer spa services, concierge, restaurants, and many more luxuries. Travelers who choose these market segments will stay with Hilton, Marriott, or Intercontinental Hotel Group.
- How strong is their brand, and are travelers aware of it?
It is crucial to choose a brand that carries strength and has a good number of properties in its system so that travelers are aware of the brand when traveling. For example, America’s Best Value Inn is a popular economy brand that has over 900 motels in their franchise system. There are more than thirty properties here in the San Francisco Bay area. Often, when traveling in the area people begin to recognize the brand and are willing to walk in and purchase a room or make a reservation online. Another example is Best Western, this franchise is located in throughout the entire United States and in many countries. US travelers are likely to reserve a night at a Best Western when traveling abroad because of their familiarity and international tourists visiting the US are likely to stay with Best Western because they see this franchise in the biggest cities of their home countries. Franchises that have very few properties or do not provide strong brand awareness are less likely to bring reservations to your hotel.
- What rewards program do they have?
Hotel owners long to be apart of a franchise system that has a strong loyalty program. Loyalty programs or rewards programs will bring repeat business to the hotel and attract travelers who are visiting a new city to a hotel franchise they are used to staying with. A strong rewards program is another form of marketing for the hotel and can keep cost of customer acquisition costs down for each individual property of the hotel program.
- Are the franchise fees fair?
The franchisors all charge fees for the use of their brand and its proprietary items such as logo, software, and reservation systems. These fees are often broken down by: marketing fee, royalty fee, franchise fee, and support fee. They average from 9% to 14% depending on the franchise. The stronger franchises such as Hilton and Marriott tend to charge more than other brands. Other franchises such as America Best Value Inn or Best Western charges a membership instead of franchise fees. They charge the hotel owner a per room fee instead of the royalty and marketing fee. Membership fees often are less expensive although the brand may not deliver the same services and support. Hotel owners must examine these fees to ensure that they are fair and the hotel will receive their return on investment for the fees they are being charged.
- How strong is their central reservation system?
One of the most important items to consider when choosing a hotel franchise is the central reservation system. All hotel owners wish to align themselves with a brand that will deliver reservations to their hotel. Strong franchisors such as Hilton and Marriott are known to have very strong reservation systems, where hotels receive a high contribution rate. Other franchises are not so strong and do not deliver as many reservations to the hotel which in result forces the hotel staff to do much of their own marketing. In general, a successful franchise system will contribute anywhere from 25% to 30% of the hotels’ reservations.
- Do they offer protection?
One final item to consider when choosing a hotel brand is the territory for that particular franchise. Hotel owners do not want to be in a market where the same franchise flag is represented multiple times. Larger markets such as Orlando, Los Angelos, or Chicago will see the same franchise in several locations. Hotel owners must negotiate with franchisors before signing any agreements that there will be a certain mileage of radius in protection of their particular flag. Franchisors do have the right to put different flags under their umbrella in the same market, for example Choice Hotels International will have Comfort Inn, Quality Inn, and Econo Lodge all at the Oakland International Airport. While they are not the same brand, they are all owned by the same parent company and work off the same reservation system. In this event, the franchisee cannot claim protection because the actual brand itself is not repeated. All franchisors are using this strategy in order to gain the most amount of properties and rooms in the market.
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Piedmont Avenue Consulting will provide expertise in utilizing technology, marketing and overall business growth in this industry. Our goal with businesses is to guide them in understanding how to leave their customers satisfied. We work to maximize a company’s business efforts by helping optimize their hotel branding, social media presence, website and call to action efforts and increased search engine optimization (SEO) and brand awareness. We will work with you to enhance current business and marketing strategies to improve productivity, efficiency and revenue immediately. We have worked with various hotels, motels and resorts including:
The Piedmont Place – This two-story motel, located in Oakland, offers quality rooms at an affordable price. This motel is a great option for those looking for lodging when visiting the San Francisco Bay Area for business or pleasure. To find out more information visit http://www.thepiedmontplace.com
La Quinta Los Banos – This laid-back hotel is situated a mile from the Los Banos Municipal Airport, which serves the central California city. With local area attractions combined with hotel service and amenities, this hotel provides a relaxed atmosphere. To find out more about La Quinta Los Banos, check out http://www.laquintalosbanos.com
Red Roof Rancho Cordova – This hotel/motel is a great location close to business sites and leisure attractions. Recently renovated with all new rooms, this hotel offers an inexpensive, pet-friendly, family-friendly discount hotel near Sacramento, California. Find out more about the hotel at http://www.redroofranchocordova.com
Euro Hotel San Mateo – Euro Hotel in San Mateo, California is centrally located in The San Francisco Bay Area offering affordable, clean and safe European style accommodations in a location that cannot be matched. To find out more about this stylish hotel, visit http://www.pacificeurohotel.com
Holiday Inn Express & Suites Berkeley – This modern hotel will provide a comfortable stay for vacationers looking for a place to stay when exploring the endless San Francisco Bay Area attractions. It is located near the University of California Berkeley Campus and North Berkeley BART station, which offers easy and inexpensive transportation throughout the Bay Area. The hotel offers free Wi-Fi, breakfast, parking, a 24 hour fitness room, guest laundry facilities and more. Check out this hotel at http://www.hiexberkeley.com
Have questions about starting a Bay Area hotel business in the San Francisco Bay Area? Interested in growing or enhancing the brand of your hotel?
Contact us today to schedule a free consulting session to review how we may be able to help. Piedmont Avenue Consulting is a San Francisco Bay Area based business development and marketing consulting firm who creates brand awareness, strengthens customer loyalty, and increases lead generation through leveraging new technologies and streamlining business processes.
David Mitroff, Ph.D. Business Consultant, Marketing Expert
David Mitroff, Ph.D. is a business consultant, marketing expert and keynote speaker who founded Piedmont Avenue Consulting (www.PiedmontAve.com), where he advises on leveraging new technology to create brand awareness, strengthen loyalty and streamline processes with proven results.
Anand Patel Hospitality Consultant, Hotelier
Anand Patel is a Hospitality Consultant with Piedmont Avenue Consulting, Inc., as well as a Hotelier in the San Francisco Bay Area. He has also served on the advisory board of several hotel organizations and owned and managed properties in other markets including Orlando, Florida. Anand is familiar with the trends regarding expansion & growth for hotel businesses as well as issues related to the hospitality industry.
