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ACCEPT

The current hotel and restaurant market is all about brands and the advantages that they portray to bestow upon the owner of a property.

Distribution, sales and marketing opportunities, service standards, corporate programmes for quality control, for employee development and lots more. Also technical services, purchasing opportunities and such more.  And indeed there are many cases where branding makes sense.

What we also see is a growing demand by owners for the franchise model. In more mature markets this is definitely a reality and in such countries where there is a long history of good quality hospitality, even more so.

But let’s consider, for some owners, what the disadvantages can be for being with a brand.

  • I have known of some owners, few I agree, that were forced by the brands they had adhered to, to respect a price policy below what the market opportunity was.
  • There are owners that do not benefit from the group purchasing opportunities as their own network can provide better deals. Let’s agree that backdoor and shady purchasing is excluded here.
  • Some owners we’ve known were forced into long term technical agreements as this came with the contract and with this contract came very specific item specification, virtually pushing owners to purchase at one supplier only and transparency isn’t always there as to what possible discounts or commissions could be.
  • We also know destinations that do not need a brand representation in order to sell well.

In Europe, the brands are only slowly entering mountain destinations as these are very seasonal, generally small scale and owned managed by locals who generally have a much better contact with their (returning) customers.

It is therefore important for owners to get the full picture of the relationship they’re going to enter into and not only consider the distribution opportunities or the comfort of not having to manage the place.  There is a cost to branding and the focus is generally kept only on the advantages in terms of return, especially as far as sales is concerned.  Some owners also want to unflag when and if they want the property to have another destination or if the property has reached the end of life cycle

But what about the cost? Fees, reservation costs, purchasing agreements, mandatory customer items, participation in PR etc.  Some owners may want to consider their reputation as individuals as well as their business reputation and throw these also into the balance as well.

So assuming an owner has decided to walk away from the brand, what could be the options open to him/her? Assuming that the owner doesn’t want to move to a Franchise agreement if previous relationship was as a Management agreement.

  • The owner could turn to another brand.
  • Could approach a white operator and add another party to the table, as there might be the need for a Franchise agreement.
  • Could take matters into his own hands, with or without help from specialists.

But this process, as with the opening of a hotel, needs to be prepared. In fact pretty much in the same way as if you would open a hotel. After experiencing some rebrandings or unflagging, we found most were ill prepared insofar as the team was recruited too late, too much effort was spent into keeping the existing team (mostly out of comfort) and the budget set aside for the process was not thought over and was generally insufficient.

Essentially, unflagging means that you take matters into your own hands. In some cases it is because of disappointing performance of the brand but it could also be that by operating the property oneself, the owner may drive better performance.  We’ve seen teams become their own managers after unflagging and finding, together with the owner, a model that was performing better for both parties, not in the least financially.

It is in the best interest of owners and brands to have a good relationship during these phases as we’ve witnessed hostile debrandings that left both the previous party and the new party in the cold. One such instance was that the owner was denied access until 00:00h of day of take-over and all staff were taken away by the former operator at 23:59 the day previous. Not the best situation. Luckily we had a full bus with trained staff waiting around the corner !

So unflagging or debranding isn’t always a failure or a curse, it should be looked at also as a possible opportunity.

Things to consider before unflagging :

  • Origin of the business (local, international), the popularity of the destination, the acquired maturity of the business, of the team and of the owner.
  • Keeping the staff or not (performing a staff audit), also depending on labour laws
  • Looking for representation or distribution partners
  • Sales and marketing activities before, during and after
  • PR linked to the unflagging
  • A budget for removing all visible signs of previous brand and a budget for replacing with new brand or new identity (bear in mind that some contracts and some operators can be quite strict and forceful about leaving brand items after end of contract)
  • Define service standards and offering and create a training plan on new or different priorities

Author

Photo P.Verbeke 4×6

Pierre Verbeke Senior Consultant

With a passion for hotel operations, Pierre, as Senior Consultant, will add his know-how in hotel openings and project management to the experience of the team.

Pierre has an extensive career in hotel operations, pre-openings and rebrandings. He is first and foremost an operational person having managed several hotels in Belgium and having set up many pre-opening teams in different countries.

He also has gained a wealth of experience opening hotels for a large Hotel Operator in various European, North African and Eastern Europe countries. He is particularly at ease with project management and knows how to deliver the highest quality of service within the agreed timeframe.

Pierre has experience with leased, managed and franchise properties and understands the various demands from owners, investors, operators within the different projects.

Pierre is an alumnus of Ecole hôtelière de Lausanne. He speaks Dutch, French, German and English, with some notions of Spanish.

Pierre likes to spend time with his two children and his wife, he also appreciates good food, good wine and the outdoors. But above all, Pierre likes to travel and discover new people and new situations.