NB: This is a guest article Timo Kettern, IT director for Westbridge Europe and hotel IT advisory board member for the Hospitality Technology EXPO (HTE).
It’s a dilemma that’s been simmering under the surface of the industry for years and one that shows no sign of abating...
How does a hotel owner follow franchisors brand standards, whilst managing potential conflict with guest needs and ensuring a good return on investment?
Hotel technology is one of the key areas in which conflict between individual owner/operators and franchisors crops up, with both sides very territorial over how much ground (and control) they yield to the other party.
So, how did we get here and what’s being done to resolve an issue that threatens to remain a sticking point between hotel owners and franchisors for years to come?
Background
Over the past ten to fifteen years more and more individual hotel owners and operators have opted to become franchisees of big name industry players, such as Hilton and IHG.
By joining a major hotel chain, these individual owners benefit from the brand association they get from being under such a well-known corporate umbrella, broader consumer recognition, plus access to well-established centralised reservation and booking systems.
By submitting to the will of the big franchisors however, decisions regarding individual hotel needs can be taken away from the individual owners, often to the detriment of the hotel.
The big franchisors maintain that owners must follow their brand standards to the letter, a situation that inevitably leads to conflict over things like in-room technology.
When it comes to investing in hotel technology, owners can be loathe to implement anything that doesn’t offer a good return on investment.
As one hotel owner said to me at a conference a few weeks back:
"Property exit value is key. No ROI while the asset is in my ownership? No technology project."
This is a familiar sentiment for many of the individual owners linked with big hotel chains and so, with the big franchisors issuing a list of strict brand standards for hotels across their portfolio, technology is always on the front-line of the battle.
Fightclub
Around the world, it’s David versus Goliath as franchisors are being challenged as to why certain standards are in place even though, more often than not, these investments have a negligible impact on the ability of the hotelier to bring in additional revenue.
Indeed it’s hard to blame the individual owner who pushes back against his corporate parent regarding a request to install three phones in a hotel room when, quite frankly, one will do.
While such examples may seem trivial, these are just the tip of the iceberg in the debate currently raging between franchisees and franchisors.
Realising the bargaining power that these individual owners have when they speak together with one voice, some of the larger chains like Intercontinental have understood the situation and established owner association meetings in which franchisees can air grievances.
An industry forum promoting two-way communication is a step in the right direction and just one tactic among many to address what has become a difficult relationship between two mutually dependant parties.
The owners also know that the franchisor will not take away the flag on top of the hotel when he only puts one phone in the bedroom.
NB: This is a guest article Timo Kettern, IT director for Westbridge Europe and hotel IT advisory board member for the Hospitality Technology EXPO (HTE).
NB2: Hotel pool jump image via Shutterstock.