The Hotel Investor Playbook Should You Operate a Branded Hotel or Go Independent? | Neil Shah E6
Nov 19, 2024
Neil Shah, a hospitality industry veteran with 25 years of experience and 13 hotels to his name, shares his insights on the choice between branded and independent hotels. He explores the advantages of brand support, marketing power, and the complexities of franchise fees. Shah discusses the significance of team motivation in hospitality, especially post-COVID-19, and how operational efficiency can enhance guest experiences. Tune in for practical takeaways that can guide your next hotel investment decision!
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Benefits of Branded Hotels
- Branded hotels offer guest trust through consistent standards and layouts.
- They provide support and proven operational models that reduce lender risk and ease financing.
Franchise Fees Justified by Value
- Franchise fees, typically 10-15% of revenue, seem steep but are offset by brand-driven increased revenue and financing benefits.
- Loyalty programs and corporate connections contribute significant guest and revenue stability for branded hotels.
Double Dipping Franchise Fees
- Brands charging franchise fees on OTA-driven revenue results in double fees for the same business.
- This 'double dipping' concern is a growing industry issue needing resolution.