Thomas Kennedy
Value, growth, growth at reasonable price, ETF investing

Hotel Industry: Competitive Factors And Discussion Of Hotel Franchisors As An Investment Opportunity

Market Overview

In the hotel industry, companies tend to fall into one of 2 main classifications: franchisors or owners. Franchisors license their brands to hotel owners, most often receiving a set percentage of each hotel's revenues as franchise and marketing fees. In exchange for these fees, the hotel owner benefits from the brand name of the franchisor and a number of other perks of being part of its franchise system, such as its reservation system and its loyalty program, each of which helps to lower costs and drive increased revenues to the hotel.

There is a distinct separation between hotel owners and franchisors: most of the major brands are franchised, and franchisors often own only a small percentage of the...

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