Different Types of Hotels and Unusual Hotels
Airport Hotels: Hong Kong SkyCity Marriott Hotel
Regal Airport Hotel
Novotel Taipei Taoyuan International Airport
Regal Airport Hotel
Novotel Taipei Taoyuan International Airport
Casino Hotel: Galaxy Macau
The Venetian Macao
Hard Rock Hotel Macau
The Venetian Macao
Hard Rock Hotel Macau
Convention Hotel: The Grand FourWings Convention Hotel (BangKok)
Oriental International Convention Hotel
Sheraton Atlantic City Convention Center Hotel
Oriental International Convention Hotel
Sheraton Atlantic City Convention Center Hotel
Economy Hotel: Bridal Tea House Hotel
Best Hotel
Hong Kong Sealand Guest House
Best Hotel
Hong Kong Sealand Guest House
City Center Hotel: MetroPark Hotel MongKok
The Peninsula Hong Kong
Regal Hong Kong Hotel
The Peninsula Hong Kong
Regal Hong Kong Hotel
Boutique Hotel: Taipei Jogging Bear
Butterfly Boutique Hotel
The Mira
Butterfly Boutique Hotel
The Mira
Freeway Hotel: Sun Kong Budget Youth Motel (Hong Kong)
Love Boutique Hotel (Taiwan)
Melody Hotel (Taiwan)
Extended Stay: Extended Stay America
Residence Inn by Marriott
Staybridge Suites
Residence Inn by Marriott
Staybridge Suites
Full Service: Conrad Hong Kong Hotel
Ramada Hotel
New Castle Hotel
Ramada Hotel
New Castle Hotel
Condotels: Trump International Hotel and Tower
Asian Mansion II Condotel
Cattleya Suite Condotel by Marbella
Asian Mansion II Condotel
Cattleya Suite Condotel by Marbella
Unusual Hotels:
The
Giraffe Manor
in Nairobi,
Kenya
Drain Pipe Hotel in Austria
Franchising
Franchising is a business model that allows different entrepreneurs to share the same brand name to operate their own business. There are two parties in this practice, Franchisor and Franchisee. Franchisee is licensed to enjoy the successor’s trademark and business content and assistance in operation know how. The structure of this business model is similar to running a single business that the franchisor is the owner and the franchisees are the front line employees. The only difference is that the owner has no legal responsibilities about what have the employees done but they are liable to ensure the followers commit to the contract and business guidelines.
The advantages in joining franchise in franchisor’s side includes being expanded without further investment cost on labour force or capital and generate the new income from franchisor’s start-up fees. On the other hand, Franchisees can invest less in starting a business, save time to build the brand name. Franchisees can enjoy the marketing tactics from the parents. Also, franchisees can have proper training in running the licensed business which can help them to be success no matter they continue the franchise or not.
The drawback of franchisors would be losing control over its products and services which turns a lead to unstable quality from store to store. For the franchisees, they have to pay their parents a certain amount of revenue out of the gross profit. It must damage their final profits. Besides, franchisees have to follow their contract commitment strictly; the personal thoughts are not able to put in the business during the contract period.
There are many successful franchising examples in hotel industry. According to the top ten franchised hotels ranking announced by Hotels Magazine, the first three ranking of franchised hotels goes to Wyndham Worldwide, Choice Hotels International Inc. and Intercontinental Hotels Group Plc..
- Wyndham Hotel Group’s operates under the Wyndham Hotels and Resorts, Ramada, Howard Johnson, Days Inn, Super 8, Microtel Inn & Suites by Wyndham and Dream hotel brands. The Group owns more than 7,000 hotels around the world. The Group reached the 500th branch in the Asia Pacific region in the early June 2012. (Wyndham Worldwide, June 4, 2012) The company has franchised the Planet Hollywood Hotels, Dream and Night brands and provides management services globally. It’s the world's largest hotel franchiser and largest vacation exchange network, and largest Vacation Ownership Company in the entire world. Half of the revenues of the Group come from franchisefees, property management fees, and membership and exchange fees each year. It charges franchisees around 8% of their sales as loyalty fees.
- Choice Hotels International Inc. operates under Cambria Suites and Ascend Collection, Comfort Suite, Comfort Inn, Sleep Inn, Mainstay Suite, Suburban Extended Stay Hotels and popular Quality Inn and Econo Lodge and owns over 6,600 hotels in the worldwide. Its business is mainly in European countries, the only Asia investment is in Singapore. Franchisees have to pay 4-6% gross revenue for the annual fees. From April to June 2012, the company generate USD173,621 from franchise. A 5% increase over the same period in 2011. In the whole year of 2011, franchising income shares 40.8% of the total revenues of the company.
- InterContinental Hotels Group Plc. owns over 4,500 hotels in the entire world and nearly 4,000 hotels are under franchised. It operates InterContinental Hotels & Resorts, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites,Candlewood Suites, EVEN Hotels, HUALUXE Hotels and Priority Club Rewards. Franchisees have to pay 5% rooms’ revenues for the annual fees. 34.3% revenues out of total are from franchise.
Management Contract
A management contract is an agreement between an owner of hotel and a separate company, or an operator, to run a hotel. Owner could be a person, company or group while owner need to bear full financial responsibility. An operator or hotel management company is hired to run a hotel business will provide expertise, supervision, established methods and procedures and normally also a track record of verifiable past performance. That means operator would be in charge operating activities and even managing activities in hotel.
Actually, some hotel companies can develop their chain in low level of investment though this method.
The agreement generally aims to maximize the return on investment (ROI) for both the operator and the owner, places the operational risk of profit and loss on the owner, and can affect the asset value in a positive or negative way depending on the quality of the operating company and market conditions.
There are usually two parts in fee structure in management contract: a base fee of around 3 per cent of hotel turnover and an achievement fee of around 10 per cent of gross operating profit or earnings before debt, interest and tax.
A typical hotel management contract consists of a mix of commercial and legal terms which calls management contract terms. Some of these terms have an immediate and lasting effect on the likely cash flow to the owner and the performance and manageability of the selected operator.
There is always conflict between owner and management team. The increased knowledge of owners and their understanding of market dynamics together with the surge of brand operator’s high competition in today’s market through consolidation and globalization enable owners to be in a stronger bargaining position when negotiating management agreements. Therefore, pressure has been placed on operators to edit agreement terms that from favor the terms to now favor the owner. Despite this, operators are able to divest their physical assets in order to concentrate on their core competency which is the operation not ownership of hotels while simultaneously reducing their risk associated with such assets.
Examples:
- Home Inns & Hotels Management
There were 847 franchised-and-managed hotels in June 30, 2012 while 71 new hotels and one franchised-and-managed hotel (Motel 168 hotel) were closed upon expiration of the contracts. In the future, there will be another 172 franchised-and-managed hotels which are under construction.
- Starwood Hotels & Resorts Worldwide Inc
Contracts of the company include hiring, training and supervising the managers and employees that operate these facilities. For additional fees, it provides centralized reservation services and coordinates national advertising and certain marketing and promotional services. Starwood also prepares and implements annual budgets for the hotels it manages and is responsible for allocating property-owner funds for periodic maintenance and repair of buildings and furnishings.
In December 31, 2011, there were 518 hotels with around 172,900 rooms while 49 new hotels and 11 hotels without it system. It also got 70 hotels (around 20,000rooms) management agreements.
- Hilton Worldwide
Hilton Management Services owns leases or manages over 340 properties in the Americas, with close to 69,000 team members across all industry segments within Hilton Worldwide. Its portfolio of hotels features over 180,000 rooms while it includes Doubletree, Embassy Suites Hotels, Hampton, etc. The aim of it is to understand the needs of ownership. It endeavors to drive the highest possible net operating income while balancing its brand and guest needs. The goal is excellent performance resulting from agility and flexibility in meeting the dynamic challenges of the market.
Vacation Ownership
Vacation ownership can also calls timeshare. The notion of the term "time-share" was originally created in Europe in the 1960s. Hapimag, a ski resort developer in the French Alps, was experiencing trouble finding customers for his high priced resort. Realizing that coffee shops sold cake only by the slice (since the entire cake was too expensive and could not be consumed at one sitting) he marketed his resort by encouraging guests to "stop renting a room" and, instead, "buy the hotel".
Vacation Ownership Programs of hotel is based on point system. The purchase of Vacation Ownership also means investing in the quality of the accommodation and the services the resort is offering. In most programs customers membership will be characterized by the amount of points they purchase. Their points will enable to use a certain type of room, in a certain time of the year for a certain amount of days.(Could one week in every year or 13weeks per year.)
There is a flexibility of using those points in all resorts within a membership program or transfer the points to an exchange program such as Resort Condominium Interchange or Interval International. These two major exchange companies will give customer a choice of resorts to choose from all around the world and from many different providers.
Vacation Ownership is certainly an alternative to owning a summer home or an apartment that can only offer the same annual destination most probably with higher maintenance costs while hotels and hostels generally do not include rental of a full standalone home or apartment, but are purpose-built.
Examples:
- Hyatt- Hyatt Vacation Club
Hyatt Residence Club combines the long-term value of home-ownership with the ultimate in vacation freedom since 1994. Customer deeded fractional purchase can be transferred to children and grandchildren. And trade the points for time within Hyatt’s network of more than 700 destinations. The first property is Sunset Harbor in Key West, Florida. The list of properties http://www.hyattresidenceclub.com/hvc/en/home.html
- Fairmount- Fairmont Heritage Place
Fairmont Heritage Place started operation in 2003.There are current six properties in north America and one in South Africa. There are four primary reasons make Fairmont Heritage Place special- Luxury design, Exclusivity (A Place of privacy and privilege), Service & Amenities Beyond Expectation, Spectacular Destinations.
- Four Seasons - Four Seasons Residences
It also offers fractional ownership luxury condominiums alongside the whole-ownership Four Seasons Residences.
The residence club offers timeshare vacations:
Punta Mita, Mexico
Vail Village, Colorado
Florence, Italy
Aviara, North San Diego
Peninsula Papagayo, Costa Rica
Jackson Hole
Scottsdale at Troon North
Each one is wildly diverse, ranging from snowcapped mountaintop to tropical and desert locales. All resorts boast a golf course, except for Vail which is oriented for snow-skiing.
View on Vacation Ownership
Due to the trend of globalization and advanced technology, businessmen don’t need to travel a lot to do business with people from another country. For example, they can have video conference to meet with their clients overseas. Therefore, vacation ownership may not be very popular among businessmen. However, it would be still useful for the retired people and people who travel a lot. It’s because people nowadays are concerned more about the life quality of oneself; they would not mind spending time to explore the world to enrich their life experience so vacation ownership would be a good choice for them. Vacation ownership can help them save a lot of time and money on finding accommodation compared with people who find hotels by themselves.
Apart from that, vacation ownership has a great flexibility which is very attractive to today’s teenagers. As there is a trend that more and more teenagers would like to have free-independent travels rather than joining a tour, vacation ownership will be easier for them to plan a schedule. Besides, the consuming power of today’s teenagers is increasing so more teenagers could afford to travel abroad. Nowadays, more parents agree that children traveling can help broaden their horizon, so they may support their children joining vacation ownership by paying the maintenance fee for them. Therefore, we think they would be more likely to choose vacation ownership.
Also, vacation ownership would be a good promotional tool to some small resorts because there are some large vacation exchange networks nowadays which link up resorts from different places. In order words, it would help the small-sized resorts to raise their potential customers’ awareness.
In short, from our point of view, vacation ownership is still a popular and useful tool for the frequent travelers and retired people. And also, teenagers would be a new member source for the vacation ownership agency.
References
- Hong Kong Franchising Association http://www.franchise.org.hk/whatisfranchise.asp
- Wikipedia of franchising http://en.wikipedia.org/wiki/Franchising http://www.wikinvest.com/concept/Franchising
- Legal Definition of Franchise, By Jamie Witt http://www.ehow.com/about_6130640_legal-definition-franchise.html
- Yahoo! Finance – financial statements for Wyndham Worldwide http://finance.yahoo.com/q?s=WYN
- Wikinvest – Financial performance of Wyndham http://www.wikinvest.com/wiki/Wyndham_Worldwide_(WYN)
- Wyndham Worldwide, June 4, 2012 http://www.wyndhamworldwide.com/media/press-releases/press-release?wwprdid=1226
- Wikipedia of Wyndham http://en.wikipedia.org/wiki/Wyndham_Worldwide
- EdgarOnline – Income statement of Choice Hotels for the year ended 31 December 2011 http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8449378-312066-314612&type=sect&dcn=0001046311-12-000007
- Wikipedia of Choice Hotels http://en.wikipedia.org/wiki/Choice_Hotels
- The annual report of InterContinental Hotels Group Plc. http://www.ihgplc.com/files/reports/ar2011/docs/IHG_Review_SFS_2011.pdf
- Wikinvest of InterContinental Hotels Group Plc. http://www.wikinvest.com/stock/Intercontinental_Hotels_Group_(IHG)
- Hotel Management Contracts In Europe, Elana Bader and Amir Lababedi, June 21, 2007 http://www.hospitalitynet.org/news/4031966.html
- Management Contract, Laura, Oct 13, 2011 http://hotelmule.com/wiki/Management-contract
- Home Inns Group Reports Second Quarter 2012 Financial Results, Home Inns & Hotel Management Inc., Aug 9, 2012 http://english.homeinns.com/phoenix.zhtml?c=203641&p=irol-newsArticle_print&ID=1724598&highlight
- Starwood Hotels www.starwoodhotels.com
- Reuters – Financial performance of Starwood http://in.reuters.com/finance/stocks/companyProfile?symbol=HOT.N
- Hilton Worldwide, Hilton Management Services http://www.hiltonmanagementservices.com
- The vacation Ownership Site http://www.thevacationownershipsite.com/
- My Cabo Experience.com http://www.mycaboexperience.com/where-to-stay/vacation-ownership/what-is-vacation-ownership
- Wikipedia of Timeshare http://en.wikipedia.org/wiki/Timeshare
- Four Seasons Residences http://residences.fourseasons.com/
- Fairmont Heritage Place http://www.fairmontheritageplace.com/heritageplace/
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