This article was edited by Judith Tricon Russo, whom I recently met as part of her work on her dissertation on “Networks of Franchises in the Luxury Hotel Trade.” I thought it might be worthwhile for her to present you with some of her reflections on the subject. To learn more about Judith, click here.

Franchises for luxury hotels: An interesting but risky leverage for development

In the last few years, the French luxury hotel industry has entered into a process of modernization that has carried a whiff of revolution. Paris may very well be the first playing field for the movement, with its wave of renovation across several historic luxury palaces, as well as the appearance of novel concepts, all equally opulent from one to the next.

With offerings ranging from a spa, swimming pool, tea room, museum, bar, club, conference room, and even a cinema, hotels are equipped with services that go beyond their usual image as transitory places of passage and establish them as proper living spaces.

But for the moment, this new approach only describes a handful of hotels.

Indeed, the range of 4-star and 5-star hotels in France, which are largely owned independently, is suffering from a slow transition to modernization that has drawn remarks from their own clientele. With aging furniture, too few digital offerings, Wi-Fi that must be paid for, and a staff team that remains largely conventional, the image of luxury hotels has considerably degraded these past few years. The recent rise in the TVA certainly hasn’t helped, and neither has its contribution to encouraging the development of new concepts for rival accommodation offerings such as Airbnb, Homelidays, or still yet, high-end apartments.

The solution?

Constructing a strong network that offers both assistance and continual updates on new techniques in the profession—in short, to add a 2.0 upgraded vision of luxury hotels.

Forming chains under a brand name therefore seems to offer the ideal way out of this crisis-ridden sector. The franchise model offers hotel groups the chance to rapidly develop their networks at low cost—by practicing, in other words, an asset-light strategy.

However, the luxury sector and the franchise model have yet to show a definitive compatibility. There is a certain rigor required in luxury brand management that an independently managed franchise cannot guarantee in its current state. For this reason, rare are the high-end labels that have entrusted themselves to this business model, Marriott International Hotels with their new collections, for instance, being a notable example.

My strategy is thus the following: propose a franchise model that respects the codes of the luxury hotel industry—namely, a consistently high quality of service in each hotel across the chain, as well as a distinctive offering to preserve the unique and exceptional character of the luxury experience.

Biography:

Profil de Judith Tricon Russo
  • Facebook
  • Twitter
  • Pinterest
  • LinkedIn

Judith Tricon-Russo

Armed with a Master’s Degree in Economics, Judith Tricon-Russo left her native town of Marseilles at 22 years old to arrive in the capital and take her first steps into the world of finance to which her studies had initially led her. Realizing that she chose the wrong career path, she left the field after a few months. Taken in by Paris, she decides to stay in the city and venture into the hotel industry, a childhood dream of hers. After several days of research and going door to door, she finds a position as a receptionist in a boutique Parisian hotel near the Madeleine, where she will stay for close to a year. In 2013, she will enroll in the MBA program at the Graduate School for Luxury Marketing (Institut Supérieur de Marketing du Luxe) in order to learn the codes of the luxury business and acquire experience in hotel marketing.

Today, as a young graduate, she hopes to continue her career in the luxury hotel industry.

Thank you for sharing this article with your friends