Franchise trends in 2023

Franchise trends in 2023

Hospitality experts agree that the industry has changed drastically post Covid-19, and the franchising space is no exception. Jad Shamseddin, COO of Aleph Hospitality, outlines the franchise trends and challenges that are likely to define 2023.

Predicting the future course of the hotel industry is a difficult task. However, through close observation of market trends and disruptors, owners and operators can position their brands to stay ahead of these changes. Operational costs, labor shortages, availability of resources and supplies, inflation rates, brand competition and ongoing market fluctuations are some of the reasons why brand owners have adopted news strategies when it comes to franchising.

More interest in businesses with purpose
During and after the pandemic, there were a greater number of conversations on sustainability, and consumers became more aware and concerned about the environment, opting to support environmentally friendly businesses with a genuine interest in the planet. Today’s consumers want to support organizations that exist for a greater purpose and hold strong brand values alongside a clear company mission.
Innovation to capture market shares Even though innovation isn’t a new trend, the fact remains that if you don’t invest in innovation, you risk losing market share. Innovation of processes, redefinition of the customer journey, introduction of new technologies and so forth will help brand owners broaden their offerings and capture a bigger market share.
Watch out for market disruptors Market disruptions occur when new companies or technologies innovate outside a particular industry and their actions significantly impact that market. Alternative lodgings, such as Airbnb, house trip and Oyo, have influenced consumers’ attitude toward traditional hospitality. People are more willing to book online, check themselves in and out of hotels, order room service or rides through mobile apps, which eventually leads to a higher degree of dependence on technology. The rapid growth of disruptors has forced brand owners to rethink expansion strategies, relying on partnerships to grow brands through franchising.

Shortage of financial resources to obtain a brand
Over the past couple of years, financial institutions have almost stopped financing any new hospitality projects or renovations due to market uncertainty. Today, while lenders are somehow more flexible, they are likely to impose stricter terms and conditions, which translates into a negative impact on new-build growth and a reduction in hotel transactions. For brand owners, this means lack of growth, forcing them to seek franchisees with access to existing hotels that can be branded quickly under a franchise agreement. This is a growing trend among brand owners who are racing to introduce soft brands, like Radisson Individual, Voco and Delta.

Increased tech demand for franchise owners
The hospitality industry is often slow to adopt new technologies and processes. This is the ultimate bottleneck faced by hoteliers who wish to stay one step ahead of guest demands but simply lack the appropriate technology to do so. Franchisors will be expected to offer mobile, cloud-based technology that is becoming essential to the success of any hotel brand and, in turn, franchisees. User-friendly platforms allow franchisees to effectively manage their properties. Next-generation technology allows properties to benefit from increased efficiency, staff productivity, enhanced response times for guest services, revenue optimization and data-driven insights, among other things.

Hotels that offer cutting-edge technology are fulfilling guests’ preferences, which include an increased focus on public safety and cleanliness. Moving forward, hotel brands must provide the optimal technologies to be able to hold onto a profitable and competitive advantage, keeping hotel owners happy and ensuring repeat visits by guests.

Jad Shamseddin,
COO of Aleph Hospitality
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About author

Rita Ghantous

Rita Ghantous is a hospitality aficionado and a passionate writer with over 9 years’ experience in journalism and 5 years experience in the hospitality sector. Her passion for the performance arts and writing, started early. At 10 years old she was praised for her solo performance of the Beatles song “All My Love” accompanied by a guitarist, and was approached by a French talent scout during her school play. However, her love for writing was stronger. Fresh out of school, she became a freelance journalist for Noun Magazine and was awarded the Silver Award Cup for Outstanding Poetry, by The International Library of Poetry (Washington DC). She studied Business Management and earned a Masters degree from Saint Joseph University (USJ), her thesis was published in the Proche-Orient, Études en Management book. She then pursued a career in the hospitality industry but didn’t give up writing, that is why she launched the Four Points by Sheraton Le Verdun Newsletter. Her love for the industry and journalism led her to Hospitality Services - the organizers of the HORECA trade show in Lebanon, Saudi Arabia, Kuwait and Jordan, as well as Salon Du Chocolat, Beirut Cooking Festival, Whisky Live and other regional shows. She is currently the Publications Executive of Hospitality News Middle East, Taste & Flavors and Lebanon Traveler. It is with ultimate devotion for her magazines that she demonstrates her hospitality savoir-faire.

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