Always wanted to run your one hotel franchise? There are plenty of exciting opportunities on offer here in the UK. Here are four of the most interesting hotel franchises in operation.
The UK’s hospitality sector is booming, despite being in the midst of a decidedly rocky patch right now. Pre-pandemic, it was worth around £100 million and had expanded by almost 20% since 2013. More than 330,000 people were also employed in the sector, working in hotels across the country.
While many hotels are currently struggling, there’s plenty of customer appetite for people to return in the future. The average occupancy rate of the UK’s hotels in 2019 was 80% year-round, and the hotel industry alone generated an impressive £20.7 billion. With an average room price of £150 in London and £70 outside, there’s plenty of profit to be made in this lucrative industry.
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Reasons why creating a hotel chain franchise is a good idea
- More and more of us are opting to become tourists in our own country and embarking on staycations rather than costly foreign holidays. And particularly due to the unprecedented situation this year, UK hotels have seen a huge rise in the numbers of domestic tourists coming through their doors.
- We’re a hard-working nation, as business travel alone is thought to account for £39 billion of UK spending every year. Even if travelling for pleasure isn’t an option, you’ll still get plenty of trade from commercial travellers, particularly if you’re based in a big city.
- The UK welcomes a huge number of international tourists every year; an estimated 40 million visited the country in 2018 alone. With flights, entertainment and just about every other aspect of an international trip often proving pretty tough on the purse, many opt for budget hotels to keep at least one part of their holiday affordable.
Interested in opening your very own hotel franchise? Here are four intriguing options for you to explore …
You may be interested to learn that Holiday Inn – the third biggest hotel chain in the UK – and its offshoot brand, Holiday Inn Express, are operated under franchise agreements. They’re part of the InterContinental Hotels Group (IHG), which manages 16 different hotel brands.
- Becoming a Holiday Inn franchisee: Like other hotel franchises, Holiday Inn is looking for franchisees with the motivation to set up a thriving business. You’ll need experience in the hospitality business and with running a business in the past.
- How much you need to invest: IHG has not officially published the investment needed to open a Holiday Inn or Holiday Inn Express, but Entrepreneur has produced suggested costs. It’s thought that franchise fees could amount to £40,000, while the initial investment might be between £6.1 million and £19.3 million.
- What you get for your investment: The IHG team supports partners every step of the way to make sure franchisees get the most from the business opportunity. This starts with carrying out market analysis assessments and tracking the 2,000+ tasks that need to be completed before launch day.
If you live in the UK, you’ll almost definitely have heard of Travelodge. It was launched in 1985 and is now the second biggest hotel chain in the industry, with 500 locations across the UK. There are also 50 scattered around the globe, so the franchise benefits from an international customer base.
- How to become a Travelodge franchisee: The hotel chain is looking for business partners who are passionate about providing great customer service. You’ll also need to be hardworking and have great business judgement to make your business profitable.
- How much you need to invest: Unfortunately, Travelodge is not currently on the lookout for more franchisees, so it isn’t publicising its investment costs. However, the chain may be using the franchise model to expand soon, so be sure to check back on its profile page regularly to see whether any opportunities have opened up.
- What you get for your investment: It’s not possible to say exactly what Travelodge would offer franchisees in return for their investment. However, it’s likely the hotel would provide a comprehensive training scheme for new investors and continuing support throughout the duration of the contract term.
Since it was founded in 1967, Marriott has established itself as one of the best known brands in the global hotel industry. Across all of its brands, it has more than 6,900 locations in operation, with around 570 Marriott locations, boasting between 100 and an incredible 2,000 guestrooms. Most also incorporate restaurants, bars and lounges for its visitors to relax in and enjoy a bite to eat.
- How to become a Marriott franchisee: If you join this franchise, you can opt to build your hotel from scratch, convert another building or simply renovate an old hotel to match the Marriott brand identity. The franchise will be behind you every step of the way as you develop your business, offering flexible building options to reflect your plans, budget and intended market.
- How much you need to invest: The investment costs will vary depending on how large your property is and whether you’re looking to establish multiple sites, but you’ll need a lot of money to invest in this prestigious brand. Total costs are estimated to be between £55 - £87 million, based on a relatively modest 300 room hotel.
- What you get for your investment: Franchisees benefit from an impressive level of initial and ongoing support. When you first sign up, you’ll get help with opening operations; sales and marketing; revenue management; platform delivery; and operations delivery and brand activation. In other words, you’ll get plenty of help as you build, convert or renovate your hotel.
With more than 4,200 hotels across the globe, Best Western is one of the world’s largest hotel businesses. Each of its hotels is owned and operated by independent franchise partners, giving them plenty of unique character while maintaining a cohesive customer experience network-wide.
- How to become a Best Western franchisee: You could be an existing hotel owner or have plans to purchase a property. Ideally, you should have in-depth knowledge of the hospitality sector and have previously managed or run your own hotel.
- How much you need to invest: You’ll need to invest a minimum of £420,000, though funding options are available for this proven hotel concept to help fund the full cost of development. As with all franchises, you’ll need to be prepared to invest a seven figure fee to cover the full cost of setting up your business.
- What you get for your investment: There’s a comprehensive package of support on offer with the Best Western franchise opportunity. You’ll go through an owner-orientation programme, general manager professional development series, instructor-led regional workshops about hotel management, revenue management, operations, sales, marketing, guest satisfaction and customer loyalty. You’ll also receive assistance with advertising, marketing and initial customer leads.
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Open a hotel franchise
Even though it may feel like a tricky time right now, opening a hotel franchise is still a viable and rewarding opportunity. If you’ve got the capital to bide your time and survive 2020, you’ll have access to a lucrative, multi-billion-pound sector that, in normal circumstances, enjoys year-round demand. Interested in a different sector? Browse our UK franchise directory for more opportunities, or catch up on the latest news from the franchise world.
Sophie Cole, Point Franchise ©