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Hotel franchise in Europe, towards the end of private turf?

28 min reading time

Published on 11/08/15 - Updated on 17/03/22

The franchise development model has existed for many years in Europe, but only became a top priority among hotel groups with the change in economic model favoring asset light strategies. Entire portfolios have been sold to investor operators attracted to the security offered by brands and a new organization has been implemented within traditional groups to provide services and the necessary assistance to old and new franchisees. The opening up of Europe’s emerging markets, both in the South and in the East, has further encouraged this kind of development, which is expanding faster than the others, enabling more complete coverage of a market to reach the necessary critical size. But it is not enough to simply change the means of development to automatically create growth and franchises. Each hotel group involved in the race has had to soften its rules, preserving only the brand’s core values, or create new, less restricting brands to attack the immense conversion market of pre-existing properties, whether branded or not. Already well-established on their respective native territories, European groups tried to blocked the way for new groups to expand -American ones in particular which have networks in Europe that remain incomplete. But is the positioning fixed? Global franchise leaders, backed by the strength of their loyalty programs, are successfully pulling down barriers on the Old Continent. Privileged hunting grounds are no longer so secure as once before. A major question remains that needs to be taken into account by all hotel groups: is the hotel brand strong enough and does it generate enough clientele compared to players in online distribution? The answer is not as easy as it was just ten years ago.

The opening up of Europe’s emerging markets, both in the South and in the East, has further encouraged this kind of development, which is expanding faster than the others, enabling more complete coverage of a market to reach the necessary critical size. But it is not enough to simply change the...

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