In a recent survey of hotel owners, more than one third of respondents considered hotel deflagging because they wanted to maximize their profit. Among branded hotels, some owners are seeing franchise fees and expenses erode profitability, causing them to question the benefits of their chain affiliation. In our previous post we looked at deflagging and its impact on sales, here we focus on hotel deflagging and profits, exploring specific ways new indies can boost profit margins.
Transitioning from a branded property into an independent requires careful navigation through multiple challenges. When it comes to hotel deflagging and sales, the move can be financially rewarding when handled correctly. If you’re considering hotel deflagging, but you’re concerned about how that decision may impact your revenue, read on for ways to boost sales in your new indie status.
Hotel deflagging occurs when a hotel owner or operator decides to become independent, ending an agreement with their brand franchiser.
Sometimes it’s the brand that decides to cut the cord, when owners don’t or can’t deliver on brand expectations. But there are times when it’s a hotel owner who seeks to “break the chains” with their chain. Here we examine top reasons why hotel deflagging may benefit your property.
More Control Over Decisions
Brands require owners to deliver a uniform experience across all their franchisees. Owners who are asking themselves, “Should I consider deflagging my hotel?” typically have a clear understanding of what their customers want. They may feel shackled by brand standards and frustrated by an inability to satisfy their guests’ expectations. Some franchise regulations may even prevent owners from making improvements that exceed brand standards, such as upgraded bedding or window coverings. Hotel owners in these situations crave the freedom to call the shots, preferring to avoid all the red tape that brands may require.