![]() The owner typically signs the contract with the brand, though owners often include their management company in rebranding discussions. Some managed hotels are branded, and the management company is then responsible for upholding brand standards. ![]() Unlike the franchise model, the management company handles everything related to day-to-day operations - even staffing, payroll, and marketing. Managed: At a managed hotel, the hotel owner signs a contract with a management company to take operational responsibilities off their plate. Popular hotel brand franchises include Hampton, Holiday Inn Express, and Red Roof Inn. Franchisors often run the day-to-day operations themselves, like hiring employees and handling payroll, and they pay a franchise fee to the brand. Franchisors sign agreements with hotel brands for access to benefits (or limitations, depending on how you look at them) like brand standards, marketing power, reservation systems, and design guidelines. The owner simply collects rent for the building and has no involvement in the hotel side.įranchised: Owners who want a more hands-on approach and don’t want to turn their physical asset over to someone else to operate might opt for the franchise model. Leased: Unlike at privately owned and operated hotels, the owners of leased hotels lease the physical asset to a different company who handles all aspects of the operation. The owner could be an individual or an ownership group. At privately owned and operated hotels, the owner takes the lead on all aspects of the business: hiring staff, maintaining the physical asset, running a hotel marketing strategy, and more. Privately owned and operated: For the owner, this model requires the most hands-on hotel operational work. Hotels generally fall into one of four ownership categories: To maximize performance, profitability, and the owner’s preferences, many hotels use various entities to manage different operational aspects. Running a hotel is no easy task, and to do it well, you need a diverse variety of skills and resources. Pictured: The James New York Nomad, a Highgate-managed hotelĭefining the Hotel Operations Landscape: Owners, Franchisors, and Management Companies By the end of the article, you’ll have a solid understanding of the hotel management landscape - whether you want to start your own hotel management company, partner with one, or begin a career working for one. ![]() We’ll dive into what exactly hotel management companies do, how they make money, and who the major players are. ![]() The world of hotel management is complex, so in this article we’ll break down the key components of this facet of the industry. Most travelers will never even know that the front desk agent who checks them into a Hilton Garden Inn does not actually work for Hilton Worldwide! How can this be? This article is not meant to be advanced so we're going to leave out other stakeholders like debt holders, asset managers and special servicers (you're welcome!). So what do we mean when we say that 'companies in the hospitality industry are structured differently than most other sectors'? An individual property might be owned by one party, be managed by another, and carry the brand flag of a third company - but these relationships are kept behind the scenes. Fear not, after reading this article you'll be an expert in no time. The structure of hotel management companies and the broader hospitality industry is dramatically different than most industries and most employees within the industry don't fully understand how it all works. Did you know that big hotel companies like Hilton and Marriott usually don’t manage their own hotels? It's ok if you didn't.
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