Hotel Franchise

Checking in to a hotel franchise

Driving down the Interstate, it's hard not to notice the immense variety of hotels that have cropped up across the American landscape. Ranging in price, size and quality, the hotel franchise is one of the most expensive, yet profitable, franchises available.

Expect even a no-frills hotel to be costly. For example, an AmeriHost hotel that provides basic lodging for those in transit costs $2.7 million to $5.2 million. On the other hand, the Doubletree hotel franchise, which offers an assortment of higher quality, and thus higher priced, hotel options such as suites, resorts and clubs , requires an investment of $7 million to $40.2 million.

The competitive market determines the type of hotel franchise you buy. What are your customers looking for? A Hilton hotel would probably not fare well on the side of Interstate 88, but a low budget Super 8 Motel would do just fine for the weary one-night-stay traveller. Then again, a classy resort area would not populate itself with hotels that lack the amenities people specifically look for when on vacation like swimming pools and quality restaurants.

There are, as always, the good points of owning a hotel franchise and then there are the bad.

Some benefits to keep in mind when trying to decide whether or not to take the hotel franchise plunge:

The hotel industry will always be popular as long as people travel away from home
Hotel franchises present good options for partnerships
More people are booking their travel plans online, which makes it easy to sign up for a flight/hotel combination package
Options such as time share keep the hotel franchise fresh; hotels can always partner up with local attractions (there's a Hilton hotel in Walt Disney World)
Brand name recognition and consumer loyalty are major aspects of the hotel franchise business

And the anxiety:

Hotel franchises are the most expensive and can range in investment from $2 million to $88 million
The actual need for a hotel, which means renovating an existing one or building a new location, all costly measures
Strong, established competitors
Business can be seasonal
A safe neighborhood is a priority
Other necessities include ample parking and a housekeeping service; if there is a restaurant add waitstaff and a kitchen
Maintaining a high-traffic location means constantly replacing and updating the furniture, décor, etc.