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Reasons to Invest in Hotel Industry Franchises
Written by: Mary TomzackArticle Overview: The lodging industry comprises what is probably the world’s fastest-growing business, employing one in ten people worldwide. Even with worldwide economic problems the lodging industry is projecting growth in the next few years. The most exciting aspect of the hotel industry’s growth and popularity is the fact that many of the most influential players in the sector are franchise systems.
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Reasons to Invest in Hotel Industry Franchises
Reasons to Invest in Hotel Industry Franchises
Hotel Franchises are not low-cost investments but your return on investment can be huge. Here are some facts for your consideration:
• The hotel market is booming and gaining more attention from franchise investors.
• Even with worldwide economic problems the lodging industry is projecting growth in the next few years.
• Great opportunities for this type of business exist in the U.S and worldwide; the lodging industry is constantly expanding.
• The hospitality sector demands a variety of suppliers.
• Food, beverages and retail stores provide other modes of revenue for hoteliers and opportunities for other franchised businesses.
The lodging industry comprises what is probably the world’s fastest-growing business, employing one in ten people worldwide. In 2006, 150,000 new rooms were opened worldwide which, according to MKG Consulting, was the highest growth ever recorded. On January 1, 2007 the worldwide supply of the top 200 groups reached 43,000 hotels and 5.5 million rooms. Since 2005, there has been a marked acceleration in new lodging development.
According to the American Hotel & Lodging Association, tourism is currently the third largest retail industry, behind automotive and food stores. It is also interesting to note that residents and international travelers in the United States spend an average of $1.8 billion a day on tourism. Tourism includes more than 15 interrelated businesses of which lodging is one of them. Others are airlines, restaurants, cruise lines, travel agents, et cetera. The typical lodging customer is split between travelers for business, 48%, and travelers for leisure, 52%.
Hotel Revenues are NOT only from Rooms
In 2006, hotels also enjoyed the benefit of increased revenue from sources other than the rental of guest rooms. Food and beverage revenues grew 7.1%, while sales in other departments (such as parking, gift stores, spa, etc.) increased 5.9%. PricewaterhouseCoopers research shows that at the end of 2007 the industry made $27.4 billion in profits while the occupancy reached 63.9%.
Lodging statistics show healthy gains in all the hotel categories. Full-service and all-suite hotels achieved the greatest profit gains of 15.9% and 15.2% respectively. Limited service and convention hotels increased their profit by 10.8%. The most exciting aspect of the hotel industry’s growth and popularity is the fact that many of the most influential players in the sector are franchise systems.
If you are interested in investing in a franchised hotel brand or you already own one, if you are an investor, or you are a supplier in the hospitality industry you may want to obtain the Franchise Offering/Franchise Disclosure Document (UFOC/FDD) of the franchised hotel brand. This franchise document, the UFOC/FDD, is filled with hard-to-obtain information about the company’s structure and franchise operations.
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Article Tags: american hotel, cruise lines, economic problems, food and beverage, food beverages, food stores, franchised businesses, hospitality sector, hotel franchises, hotel industry, hotel market, hotel revenues, hoteliers, international travelers, lodging association, lodging development, lodging industry, retail industry, tourism tourism, worldwide supply
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- Evan,
There are over 120 Franchises listed by the SBA with 0% Loan Failure from 10-1-00 to 9-30-05 these companies have at leat 10 loans disbursed.
A number of the companies are Hotel/Motel Franchises so I listed them separately.
Since all the ones listed have 0% loan failure I listed them descending by # of loans disbursed.
Top 20 (by # loans Disbursed) 0% SBA Loan Failure (does not include hotels/motels)
1 21425--CULVER'S FROZEN CUSTARD 85
2 66910--PRIMROSE SCHOOL (DAYCARE) 76
3 14467--CARTRIDGE WORLD STORES 54
4 68021--QUIZNO'S SUBS 41
5 06560--AUNTIE ANN'S (SOFT PRETZELS) 40
6 29912--FIREHOUSE SUBS 35
7 31154--FOOT SOLUTIONS 35
8 52707--MEDICAP PHARMACY 35
9 09802--BEN & JERRY'S ICE CREAM 33
10 67759--COMFORT SUITES 33
11 70150--RITTER'S FROZEN CUSTARD 32
12 05650--ARBY'S 31
13 65160--PLATO'S CLOSET 31
14 67417--PUMP IT UP 30
15 69149--REMAX 30
16 71456--SALAD WORKS, INC. 30
17 76282--SONIC DRIVE-IN 27
18 84725--UNION 76 OIL 27
19 17049--CHRISTIAN BROTHERS AUTOMOTIVE 26
20 78950--SUNOCO SERVICE STATION 26
Top 10 0% SBA Loan Failure Hotel/Motels
1 10275--BEST WESTERN INN 104
2 67750--COMFORT INN 98
3 38605--HOLIDAY INN EXPRESS 87
4 36680--HAMPTON INNS 57
5 53165--MICROTEL 33
6 75385--SLEEP INN MOTEL 26
7 04160--AMERIHOST INN 18
8 69134--RED ROOF INN 13
9 17230--CLARION INN & SUITES 11
10 20715--COUNTRY INN 11
Re: 10 Reasons Who Startups Fail & Book Recommendations
- Great post,but please edit the headline. I presume it is "10 Reasons Why Startups Fail & Book Recommendation
Go for both!
- That's life Julie as a business owner. You never have enough resources. Invest the money in your patent if you really have something worth protecting and bootstrap your marketing efforts so that you get some clients and continue to grow.
franchisebrief.com good clean design
- I actually really like the design - it's clean and not busy. The information is easy to find.
You mentioned you didn't want to monetize from the site thru the use of adwords but what about JV'ing with all or most of the Franchises you are referring people to.
Is that possible in the Franchise industry?
$500,000 Give-away
- I like dreaming so here goes...
note: I didn't have much time to dream this up...
1. pay off my mom's mortgage
2. Take family (mom and brothers) on Vacation - probably send each one off to their own destinaton - no need to mix pleasure and family members.
3. buy some beach front property in the US
4. Invest in a business
5. Buy myself some nice suits and shirts.
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