Vacation ownership of hotel business, Agreements of franchising, Management contract

1. Agreement of Franchising:

Franchising is a legal contract built between franchiser and franchisee. The contract can be as long as several years. When the contract is ended, both franchisers and franchisees can choose renew or not based on the performance.


For Franchiser, they are the owners of a brand name/product. They have the right to allow franchisee to use their brand name to run a business. In order to attract more franchisees to invest money and build up confidence, they are working hard to build up and maintain the reputation of the brand. When franchisees are cooperated with them, they will provide assistance to franchisees based on centralized reservation system.
Franchisers most likely, have a clear company policies and standard for franchisee so that franchisees will have a unite service provided to customers.


For Franchisees, they are the business partners with franchisers. They invest to the brand, and get the right to run the system.



Examples of Agreements of franchising:

Days Inn China was established in 2004 and is one of the fastest growing hotel chains in China today. The franchise of Days Inn China is Frontier Group which is a frontier group in Singapore,

Hilton Hotels & Resorts was established in 1943 and over 530 Hilton branded hotels across the world in 78 countries. The franchise of Hilton Hotels & Resorts is Hilton Worldwide.

Renaissance Hotels was founded in 1982. The franchise of Renaissance Hotels is Marriott International which is an American diversified hospitality company.

Days Inn China

Renaissance Hotels

2. Agreement of Management Contract
Management Contract is a term signed between owners and Management Company. It allows the hotel company to manage the property for a period like, 5 or 10, or even longer years.
For the management company fee, the management company will usually receive a percent of gross/net profit (around 3-4.5%).


For the owner, they are responsible to financial planning, paying for the initial fee, for instance, set up charge, marketing charge and accounting charge and so on. Apparently, they are the key point to set a clear position to for the business.

For the management company, they are responsible of running the company. For example, managing all of department in company, recruiting people, training employees, and managing the finance.

On the other hand, owners are responsible of paying money, and management companies are responsible of running the company well.

Examples of Management contract:

Hilton Worldwide signed management agreement with Pekah Hotels.Sdn.Bhd in Sabah. 

Accor signed management agreement with Novotel Hyderbad in Hyderbad, India.

Marshall Hotels & Resorts signed 4 management contracts to its rapidly expanding portfolio of Mid-Altantic region hotels which include Sheraton in Mahwah, Ramada in Wayne, Madison Avenue Beach Club Hotel in Cape May and The Jetty Motel in Cape May, N.J.

Accor

Hilton Worldwide

3. Vacation ownership

It is a kind of timeshare ownership, which means that when customers pay for a period of time, then they can have the right to use the property that company provided at that period of time.

Examples of Vacation ownership of hotel business:

Wyndham Vacation Ownership is one of the world’s largest developer and marketer of flexible, points-based vacation ownership products. It has developed more than 160 vacation ownership resorts throughout the United States, Canada and Mexico etc.

Sheraton Vacation Ownership -the Starwood Vacation Ownership family with access to Sheraton and Westin Vacation Ownership resorts, plus, more than 1,180 Starwood hotels and resorts in over 100 countries.

Marriott Vacation Club International- Marriott Vacation Club has remained the leader in the vacation ownership industry, delivering unforgettable vacations to more than 400,000 Owner families around the globe.

Wyndham Vacation Ownership

Marriott Vacation Club International

Reference: http://en.wikipedia.org/wiki/Hilton_Hotels_%26_Resorts

http://en.wikipedia.org/wiki/Renaissance_Hotels