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Hospitality 2009-10-12

Hospitable way to expand

Owning and running a hotel business requires strenuous efforts. This statement does not hold true if you opt for franchising. How and why, read below

By Ramanjit Kaur Feature Writer

Indian Tourism is fast moving towards becoming world’s no. 1 tourist destination. As per WTO’s (World Trade Organisation) prediction India will be receiving approximately 25 million tourists by 2015. Considering this growth of Indian tourism hotels and resorts, it appears to be one of the most lucrative businesses in India in the coming years. So all those aspiring entrepreneurs, to whom business in hotel industry interests, this is the most appropriate time to give it a serious thought.

Growth of franchising in Hotel Industry

In spite of the late arrival of the franchise concept in India, the franchising in hotel industry is experiencing enormous growth every year. For instance, Indian hotel industry experienced a growth of 21.27 per cent in 2006-07 and this is increased by 14.17 per cent in 2007-08. This shows that the hotel industry is growing rapidly and is expected to reach $826.76 billion by 2010.

You must agree with the fact that initiating and establishing a hotel business requires a lot of experience and efforts. But going through a franchise route is the most suitable and profitable way to own a hotel business. When you take franchise, you need not worry about the brand positioning;  do not have to boggle your mind on interior decoration, the food menu, number of rooms, training of employees as the franchisor is there for your rescue and to provide you with all the necessary requirements to set up the business. Franchising in hotel industry has immense growth potential in India because the big brands and the local operators now understand the importance of brand positioning and have realised how difficult it is to attract business to one’s property. That is the reason why big brands like the Oberoi Group and Taj Group are also following the franchising route  to  tie-up with the international brands like Hilton and Raffels respectively to compete at the international level.

Major Hotel Franchisors

The major brands that are into franchising in this sector are mentioned below. To start with the domestic players, we have, The Leela hotels, resorts and palaces that have signed a franchise agreement with Kempinski's Hotels and is a well known brand in India. Similar is the case with BJN’s hotels, Sarovar Hotels Pvt. Ltd and many others as they know that franchising is the apt way for expansion. With the growing economy of India, large numbers of international players are also gaining grounds here. Some of the international brands like, Hyatt Hotels, Marriott Hotels, Starwood Hotels, Carlson Hotels, Best Western and other big groups like The Park, Hilton, Hyatt, Accorr and Trident and so on, have not only established themselves in India but they are also planning to expand through the franchise route.

Do you know why these big brands hunt for local partners? Because it is quite a pain to understand the cultural know-how of every area where they want to expand. And franchising is the only available option as the franchisees know the trends and demands of their local market and understand what is required to fetch customers’ attention.

Requirements and current trends in hotel franchising

So, if you ever dreamt of owning a hotel, then franchise will make your dream come true. All you need to do is the fulfillment of some bare necessities of franchising. First and foremost is the investment that a franchisor requires from the franchisee’s part. It is the franchising fee to sign up with the brand. Constant flow of capital from the franchisee’s part is essential to bear the merchandising expenditures. Secondly, for setting up a hotel; a perfect location is a must as it counts for the overall success of the hotel. Then there is a requirement of man-power, that is, a full fledged team of dedicated employees, though training will be provided by the franchisor.

Apart from these basic requisites, you should come up with some unique online marketing plans that includes the attention seeking online presentation of the brand, How to maximise the website visibility, how one can convert the lookers into bookers area few of the marketing strategies one need to take care of as the new technologies account for the increasing revenues. And these days, the foremost necessity of a hotel is its accessibility through internet. Business should aim to move beyond the conventional ways of marketing to reach out to large audience as customer satisfaction is the key source of generating customer’s preference for the brand.

All in all, taking hotel franchise is a win-win situation for both the franchisor and the franchisee. Franchisor is expanding his business through an aspiring businessman and franchisee is making full use of franchisor’s successful business formula to enjoy the benefits. So, what are you waiting for…

nihar r pattnaik 06, Oct 2009 at 11:02 PM
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