Whilst we may be approaching a period of global economic decline, the world’s leisure and travel industry is continuing to grow at a steady and impressive rate. As a result, it’s little wonder that the world’s leading brands are looking to expand overseas and create renowned international chains.
Take Marriott, for example, which spent the majority of 2017 signing lucrative development contracts outside of North America and expanding its presence across Asia and Europe.
By the end of 2017, the Marriott chain operated or franchised more than 6,500 hotels globally, with a third of these located outside of the U.S.. But what are the golden rules of international hotel expansion and why are they so important?
1- Identify Growth Markets
Before you expand your chain overseas, it’s important to remember that not all locations and markets are created equal.
With this in mind, it’s important to think strategically when selecting the markets that you intend to enter into, as you look to identify locations that are experiencing high compound annual growth rates (CAGRs).
Take India, for example, which has seen its hotel sector boom for a period of years now. The latest figures suggest that this trend is set to continue for the foreseeable future too, with the CAGR for this market expected to peak at around 13% between 2019 and 2023 (due to an average increase in the number of foreign visitors and business delegates per annum).
2- Develop Your Business Plan and Strategy
Whenever you look to open a new hotel, you’ll need to create a detailed business plan and strategy that’s tailored to suit the target location and the opportunity that it provides.
After all, each market has its own economic, cultural and governmental nuances which impact on the private sector, whilst there are also variable market conditions pertaining to potential language barriers and pricing.
So, you need to create a localised business strategy that can optimise your chances of success in your target area, as you look to define short, medium and long-term goals to measure your expansion.
3- Understand That Legal and Financial Preparedness is Key
On a final note, you should never underestimate the importance of legal and financial preparedness when expanding your hotel chain overseas.
After all, some countries are renowned for being highly litigious, so you’ll need to consult with experts and ensure that strong processes and provisions are put in place to minimise your commercial risk.
In the case of global experts such as GVA, you can also receive some much-needed advice on the procurement and development of land, which is imperative if you’ve targeted a new site that you need to build on to achieve your objectives.
Even if you’re a seasoned hotelier in your own country, seeking out guidance from global experts can often make the difference between successful and filed international ventures in the leisure space.
