News & Stories

Hamburg/Berlin. What else do I need? I asked this question myself when I checked out; the answer was provided by the hotel in the last 24 hours: The hotel was able to meet the "core needs" of the traveller. With their focussed service, the new midscale franchising brands are slipping into remarkably established hotel structures in Continental Europe. The guest is probably indifferent about the hotel's name and the franchisor/franchisee behind the concept. He only wants to find, book and enjoy a hotel for a reasonable price. Impressions of a traveller at Holiday Inn Express City Centre Hamburg, and at Hampton by Hilton Berlin City West.

Duesseldorf/Frankfurt. The current BBG business comparison remains skeptical: in a chapter about franchising the publishers/authors claim: franchise fees of five to six percent and more are additional costs and therefore diminish profit entirely or by roughly one third. BBG Managing Director Karl-Heinz Kreuzig gave hospitalityInside.com permission to publish this report - in a slightly shortened version. And as it contains a few provoking theses and a model calculation about franchising, hospitalityInside.com asked an expert to comment them: Martin Bowen, Asc Vice President Development Germany of the InterContinental Hotels Group. A dialogue between Karl-Heinz Kreuzig and Martin Bowen.

Augsburg. At the beginning of November, Accor appointed a franchise expert as CEO. Europe's largest hotel chain sends a clear signal with the move – and takes franchising symbolically out of the fast food sector and into the feudal hospitality industry. "Franchising is not difficult, just complex," Markus Lehnert says, an experienced developer for Marriott Hotels. Strategic development of this area of business in Continental Europe remains a challenge nonetheless. Up to now, the Americans and the British have dominated the field – and have applied their market rules. These work – at least in German-speaking Europe – only to a limited extent. Only facts matter, if, for example, the bookings from mega brands only make up between 30 and 50 percent of revenues. In the following, renowned hotel groups and large franchisors and franchisees, a consultant, a banker and an auditor give their views on the reasons for the current surge in franchising as well as on contracts, guarantees and relationships with the banks.

Wiesbaden. In Frankfurt am Main, the German-Austrian chain Star Inn opened its new hotel in September; in future, the expansion will be accelerated by franchise agreements. By 2015, Star Inn aims at 30 hotels. Behind the group is a former Accor manager. The room rates in Star Inn hotels are always lower than the ones of Ibis Hotels.

Munich. If only four percent of all contracts in Germany are management contracts, this fact alone is an indication of the significance of this contract form... This was the provocative statement made by Markus Beike from Christie + Co Germany as he introduced the panel on the value of management and franchise contracts at the "Hospitality Industry Dialogue" at the Expo Real last week. The management contract is linked to crisis resistant investors and cash-flow orientated thinking, the franchise contract may become - in Germany - a catalyst for lease contracts.

Vienna. Hotel rate indices, such as hotels.com are very popular. Very often, this has nothing to do with the requested rates. Hotel websites are more reliable. The Austrian Hotelier Association examined price portals – for Austria – and revealed great chaos. Concerning queries, the hotel portals were uncommunicative. By means of press release, OEHV now warns the end consumers. The examination results are summarised in a chart for insiders.

Berlin. The value added tax cut for overnight stays at hotels introduced only at the turn of the year is at stake. The German liberal party is prepared to raise the tax from 7% back to 19% in exchange for a comprehensive value added tax reform. The hotel association refuses to accept this.

Hamburg. Good service is the leading factor in competition. Yet this is something which many companies and service providers in Germany can't provide. Only one in four Germans believes that the phrase "the customer is king" still applies today.

Vienna. Previous research for the UK and US markets suggested that design hotels perform better than traditional, “non-design” hotels. This is also one of the key findings of a recent survey conducted throughout Europe. Does this imply that design hotels are consequently more attractive real estate investments from an investor’s perspective? The answer is: yes, if one strictly follows certain guidelines. A summary and the survey in detail.

London. Franchising in Europe is still much less developed than it is in the USA, but it is gaining ground. Also, Franchising in Europe is not as uniform or as standard as it is in the USA. The largest number of franchise systems operating within Europe were in Germany, the UK, France, Italy and Spain. Germany, the UK and France showed ‘domestic’ systems mostly, whereas Denmark, Belgium and Austria imported most of their franchise systems. As Europe consists of many small markets and brand penetration rates are low, there is a huge potential for franchisors. Europe presents more opportunities than threats, experts say. These are findings of the new and first HVS "2010 Hotel Franchise Fee Guide - Europe". The report in detail.