According to a report by Para Magazine, local and international hotel chains are shifting their focus from building new hotels to managing and operating existing ones. This trend is easing the burden for entrepreneurs who have suitable land for a hotel but lack experience in the hotel industry. Foreign hotel chains are competing with each other to operate hotels under the name of one of their brands for entrepreneurs with suitable land for hotels. This competition has made Türkiye one of the top five countries in the world for franchise agreements and brand rights.
How does the system work?
Entrepreneurs who have land suitable for a hotel and want to enter the growing accommodation sector often don't know how to market and fill their hotels effectively. Established local and international hotel chains with expertise in the industry offer two options to entrepreneurs: management or franchise. If the entrepreneur has experience in hotel management, they can operate the facility themselves. In this case, they open the hotel under a well-known brand name and pay a fee for using the brand name. If they do not want to operate the hotel themselves, chain hotels can run the hotel on their behalf and charge both a management fee and a franchise fee.
In the franchise system, chain hotels charge a fee of 4% to 5% of room revenue and 2.5% to 3% of room revenue for marketing. For management, fees range from 3% to 4% of room revenue. Entrepreneurs who want to make deals with chain hotels for either management or franchise agreements are advised to work with professional consultants who specialize in this field.
Coral's international expansion
Coral Group Hotels, established in 2005, operates with various international hotel brands in different segments. Sami Kaplancı, Deputy Director of Business Development at Coral Group Hotels, said, "We provide high-quality service to our guests with our Xanadu Resort Hotel, Otium Hotels, and Seven Seas Hotels brands in four countries. Four of these hotels are our own, while others operate through management and franchise methods. We plan to open 10 new hotels in 2024, mainly in the Aegean region of Türkiye, as well as in Rhodes and Crete in Greece, Hurghada and Sharm El Sheikh in Egypt, Hammamet, Monastir, and Djerba in Tunisia, and Thailand and Vietnam in Southeast Asia."
Hilton's 30 projects
Hilton, which has been hosting guests in Türkiye for 65 years, now operates 75 hotels in the country. Mike Collini, Vice President of Development for Hilton in the Middle East and Southern Europe, stated, "Türkiye is still our fourth-largest market globally with our existing Hilton hotels." He added, "Looking at our growth process, we have approximately 30 new hotel projects in development." Collini emphasized Hilton's global success and its portfolio of brands, which provides opportunities for entrepreneurs and those looking to become hotel owners, saying, "We collaborate with visionary businesspeople to evaluate the right brand in the right location and in the right alignment. We are eager to collaborate with hotel owners and investors in Türkiye, where the Republic of Türkiye celebrates its 100th year, and where Hilton has maintained its presence with more than 100 hotels."
Dedeman targets 81 provinces
Dedeman Hotels & Resorts International operates with 9 different accommodation brands in 25 locations worldwide, with a total capacity of 3,500 rooms. Banu Dedeman, Chairman of the Board of Dedeman Hotels & Resorts International, said, "Within the Dedeman Hotels & Resorts International umbrella, apart from our Dedeman Istanbul hotel, which is owned and managed by us, we have 5 management, 5 franchise, 3 lease hotels; under the Park Dedeman brand, we have 4 management, 2 franchise, 2 lease hotels; under the Ready to Stay by Dedeman brand, we have 1 management; under the Smart by Dedeman brand, we have 1 franchise; and under the Managed by Dedeman brand, we have 1 franchise hotel. We plan to increase our total number of hotels to over 30 by the end of this year, and in the following year, we aim to increase our contract count to 75 and our operational hotel count to over 50. Our biggest goal is to grow equally in Türkiye's 81 provinces and districts, where cultural, religious, art, gastronomy, sports, and health tourism are carried out, as well as abroad."
Wyndham's 20 new projects
Wyndham Hotels & Resorts, which currently has more than 95 franchise hotels in operation in Türkiye where it operates entirely under the franchise model, is the world's largest hotel company with over 9,000 hotels in more than 95 countries. Murat Özel, Country Director of Wyndham Hotels & Resorts Türkiye, stated, "In terms of the number of properties, we are the largest international hotel company in Türkiye." He continued, "We offer our hotel partners high-quality brands, systems, loyalty programs, sales and marketing capabilities, and high-tech solutions. Our portfolio includes 24 globally recognized brands and various hotels that meet the needs of every visitor. Ten of our brands are currently present in Türkiye. All of them are included in our loyalty program, Wyndham Rewards. In addition to pre-opening support and operational units, we also have teams supporting Türkiye and other markets, including the revenue management team responsible for the entire EMEA region. These teams operate in our country."
Four new facilities from Elite World
Elite World Hotels & Resorts, as part of its new strategies, introduced the brands Elite World Grand, Elite World, Elite World Comfy, and Elite World Go to the tourism sector by applying the management-operating and franchise-operating models. Orkun Petekçi, Operation Director of Elite World Hotels & Resorts, said, "By the end of the year, we will add 4 new hotels to our chain, with 1 contract process completed and 3 in the signing phase. We are evaluating opportunities that come from all 81 cities of Türkiye, sharing our experience in the hotel and business development gained over the years, and the power of our brand with potential investors."
Anemon Suits & Residences is coming
Anemon Hotels has categorized its sub-brands into three categories: Grand, Kent, and Koleksiyon. Out of the 23 hotels currently in operation in Türkiye, 7 are under management agreements. Didem Goncaoğlu, Brand Management and Quality Standards Director at Anemon Hotels, said, "Our management-agreed hotels include Anemon Diyarbakır Kent Hotel, Anemon Mardin Grand Hotel, Anemon Aydın Kent Hotel, Anemon Trabzon Kent Hotel, Anemon Bakırköy Kent Hotel, Anemon Uşak Kent Hotel, and Villa Estet by Anemon Koleksiyon. By the end of the year, we will have 3 more hotels operating under our brand, and negotiations are currently underway in Istanbul, Izmir, Bursa, Karabük, Gaziantep, and Bolu provinces. As Anemon Hotels, we are planning to introduce the 'Anemon Suits & Residences' concept as our fourth sub-brand soon, supporting our growth goals."
Accor will continue in the economic segment in major cities
The management of Accor Group, which has been operating 67 hotels in Turkey in the economy segment for many years, aims to be in the right location with the right investors. Onur Kurç, Turkey Business Development Director for Accor Group, provides the following information regarding this: "Our goal is not just to focus on year-end targets but to be involved in the right projects. Our aim is to ensure that valuable investors who invest in the hotel industry and choose to work with us achieve successful financial results."
Kurç summarizes his views on new agreements as follows: "In our new agreements, we act according to brand segmentation. Since we base our investment decisions on the speed of return, we strive to position our luxury segment hotels only in Istanbul, Izmir, Ankara, Bodrum, and Antalya. In other major cities, we will continue with our mid-range and economy segment hotels."
What does operating a hotel under a brand name provide for entrepreneurs?
- The recognized name of the chain hotel helps in marketing and filling the hotel.
- Less money is spent on major reservation systems.
- Entrepreneurs gain experience in hotel management from globally renowned brands.
- They become part of loyalty programs.
- They benefit from promotion on social media and technological infrastructure.