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The benefits of a franchise chain: Choice Hotels

Sarah Stowe

What are the benefits of rebadging an independent hotel and joining the ranks of the franchised hotel chains?

Choice Hotels Australasia is a pure franchise organisation, explains CEO Trent Fraser. The system has 6200 hotels worldwide and 280 in Australia. EconoLodge, Clarion, Comfort and Quality are all three star hotels, the Ascend fine hotel collection introduced in January his year is a 4-4.5 star business.

“There was an opportunity for niche, upmarket, boutique, heritage properties that are difficult to put into a core brand.

“Every property asks how do I get to the next level? What can you offer that we don’t have access to? What we offer is exposure to the global market,” says Fraser.

THE BENEFITS

Properties in the chain overseas can cross-sell, as can the Australian and New Zealand hotels. “Franchisees are not just buying into the domestic market. Business coming through our channels to properties is delivering 20 percent of properties’ turnover.

“The [cloud-based] property management system Choice Advantage is available to nearly 40 percent of the portfolio, we hope 50 percent by the end of the year. To do it properly we were reluctant to do too many at the same time; we want to plan around the deployment so we can control it in an orderly fashion.”

Fraser [pictured below] is mindful too of franchisee investment in front office hardware and wants to give these franchisees the chance to use up their commitment. The majority of franchisees are expected to have adopted the new system by the end of 2014.

While about 10 percent of the growth is through new builds, the remaining 90 percent is existing hotel businesses joining the system and re-branding.

ACCESS TO RESOURCES

The Choice value proposition has four key elements: marketing on a global scale; a sales team; a reservations contact centre in Melbourne; and field support and training.

Staff at a new hotel will undertake online initiation then group training in a classroom. Webinars are a successful development, last year 100 were conducted from head office, says Fraser.

“Individual hotel owners don’t generally have the resources or don’t have access to these things.” And the benefits add up, he believes.

In addition there is a heavy focus on service around the front desk. A new initiative aims to spread the knowledge about the service functions and the daily challenges faced by hotel staff.

“What we’re doing to support them is for our team to work in a hotel for a day. Some people have come from hotels but some have not, and it’s important to get people back in, or for those without the background to see what it’s all about.

“I’ll be the first one out. There will be 80 people in total doing a full shift. The ideas is for us to share some learnings, come and report back, and identify areas for improvement. We’ll probably make this an annual exercise.

“We want customer forming a relationship at the hotel. We need to make sure we are delivering on the service level when they get there, and that they come back.

“There is no second chance at first impressions.”