Hotels End Tie-Ups To Try New Business Models

Economic Times:

The boom in India’s travel & hospitality industry has the makings of an obvious, though hitherto surprisingly uncommon, spat. Many hotel biggies – global as well as Indian – are revisiting and recharting their business model for the country. And if that means ending long running brand partnerships, so be it.

With an eye to better manage their brand in an emerging country such as India and extract more revenues in market where room tariffs are only headed one way – up – global hotel brands are moving away from pure franchisee model to management contracts, and in few cases even total ownership of hotels that carry their shingles. Indian hoteliers, on the other hand, emboldened by long experience of handling best in class global brands, want to charter an independent course and see no reason why they can’t build their own luxury or budget brands themselves, and see franchise fees as a drain on their resources.


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