Franchise and Referral Hotels: How Hotel Franchising Works

By Sumit Manwal, Founder, Hospitality Vacancy

Franchising lets an independent owner use a known hotel brand, its standards and its booking systems, while still owning and running the property.

This short guide explains franchise and referral (affiliated) hotels.

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Franchise and Referral Group

Franchising is simply a method of distribution whereby one entity that has developed a particular pattern or format for doing business. The franchiser usually provides a strong brand name, national and international central reservation system, management training programs, advanced technology, and central purchasing services.

Example :- Hilton, Marriott, IHG etc.

Referral groups consist of independent hotels, which have joined together for some common purpose. While each property in the referral system is same but there is no similarity in the quality of service and guest expectations. Hotels within this group refer their guests to other affiliated hotels. With this kind of an approach a hotel may gain a much greater level of exposure.

The one notable survivor of the referral chains, Best Western, offers the centralised purchasing and reservation systems of a franchise system but nominally remains member-owned.

FAQ

What does a hotel franchisor provide?

Usually the brand name, operating standards, marketing support and access to reservation systems, in return for fees.

What is a referral group?

A group of independent hotels that work together on marketing and referrals while keeping their own identity.

Your next step

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• Hotels hiring: Register as an employer on Hospitality Vacancy.

Related reading on this blog

• Chain Hotels: How Hotel Chains Work and Why They Grow
• Management Contract Hotels: How They Work (Classification of Hotels)
• Independent Hotels: Features, Advantages and Challenges

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About the Author

Sumit Manwal is the founder of Hospitality Vacancy (since 2017) and has 20+ years of experience in hospitality. He received the "Excellence in Hospitality Sector of Uttarakhand" award, presented by Shri Dhan Singh Rawat ji (January 2023), and the Dainik Jagran inext Uttarakhand Ratan Samman for Excellence in Hospitality & Education, presented by Shri Bhagat Singh Koshyari ji (2023). He helps hotels build reliable teams and professionals grow their careers.

📧 Contact: manwal@hospitalityvacancy.com | 🔗 LinkedIn