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Hotel Consortia

Independent hotels are grouped together by hotel consortia, in order to compete with integrated and franchised chains. They promote an image of quality and aim at providing comparable standards of service, buildings and furnishings in order to build up customer loyalty from a domestic and international clientele.

Hotel consortia benefit from economies of scale when it comes to purchasing and marketing. The main benefits of joining a consortium are:

  • joint production of guides and brochures, which advertise all the hotels in the chain and are distributed at each hotel through tour operators and travel agencies;

  • joint national and international publicity campaigns;

  • links into computer reservation systems (CRS) which allow agents to book directly from a screen;

  • centralised purchasing of hotel equipment to achieve economy of scale;

  • technical assistance and management consultancy.

This enables the small hotel to be represented on the international market while still keeping its managerial independence.

The concept of the hotel consortium has become very popular and their numbers have expanded considerably.

Integrated Hotel Chains

Integrated chains develop and commercialise hotel products htat are consistent and homogenous. They exert their control either directly, by complete ownership of the hotel, or indirectly, through a franchise system or a management contract. All hotels in the chain carry the name and insignia of the chain.

The main integrated hotels originate from the United States, although the French group Accor is ranked fifth in the world in terms of size.

Hotel Franchising

Hotel franchising is largely responsible for the expansion of the integrated hotel chain sector. This system benefits both the franchiser and the franchisee.

The franchiser brings his standards, his brand name, his experience and his reputation. The franchise company is a commercial enterprise (generally a public limited company) and the hotelier is both a client and an associate. The company contributes its technical expertise and financial help to set up the investment and it assists the franchisee’s management by putting the marketing service and computerised central reservation system at its disposal. The franchise company will give support in publicity campaigns and provide advice on management matters and equipment­purchasing.

The franchisee contributes personal funds normally amounting to around 30 per cent of the investment. He also undertakes the whole financial risk of the hotel investment. He benefits from the standardisation and the profitability of the group and from the commercial and promotional advantages brought by belonging to a group. Franchisees are charged 3-4 per cent of turnover depending on the franchise company. Furthermore, a membership fee, amounting to approximately 10 per cent of the investment, is charged to cover feasibility studies and financial packages.

Tourism lodgings

These are second homes, rented furnished apartments, timeshares, campsites, holiday villages, holiday centres and holiday camps.

Second homes include homes wholly owned by the tourist, apartments in a co-owned block with shared collective services (condominiums) and timeshare properties.

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