As owners look for resilience and stability in an increasingly competitive market, major hotel groups and legal experts are reporting growing interest in franchising opportunities. Choice Hotels Asia-Pacific Director of Development, Australia and New Zealand, Scott Armstrong, shares his outlook for franchising opportunities.
Staff shortages and high demand have made it hard for business owners to look ahead and ensure their property is well positioned in 2023. As we come out of the busy holiday period, and as interest rate rises start to hit home and the industry sees a slowdown, independent operators may struggle to stay front of mind with guests.
We’re already experiencing growing interest in franchising opportunities with the Choice brands, and I expect this will peak in late February or early March as the current economic climate starts to have an impact.
New franchise enquiries are showing particular interest in our global distribution network, our revenue management service and driving profitability, and the procurement savings they can make with the buying power of one of the world’s largest accommodation franchisors.
We’ve heard from current franchisees that our distribution network is a key factor when they decide to join us and is something they would find impossible to build or maintain on their own.
We have relationships with all major consortia, OTAs and GDS providers in the Asia Pacific region and internationally. We also bring an established and growing network of almost 1,000 corporate clients in this region with negotiated rates across the Choice Hotel portfolio.
Having a head office sales team working with hotels, to ensure their hotels are represented as preferred accommodation suppliers when new industry or retail chains move into their markets has been key. Often these relationships already exist in other parts of the country, but without the group to leverage existing relationships, hotels would struggle to get their foot in the door.
Loyalty is playing a bigger role now, with our Choice Privileges program growing rapidly month-on-month to 520,000 members across Australia and New Zealand.
Playing at scale, in an increasingly tight market, is going to make all the difference for mid-scale hotels who are eager to drive corporate bookings and build loyalty and repeat bookings.
We expect strong growth in the midscale and upper midscale segments, which account for over 50% of hotel supply in Australia. Australians continue to holiday here, and they are looking for the best value for money and superior service and facilities. They are loyal to brands they trust will deliver on their expectations.
It’s a promising outlook with a strong pipeline already heading into 2023. We have recently bolstered our development team, with a team of four in Australia and a Development Director in New Zealand to capitalise on leads and enquiries in the pipeline.