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A few weeks after a franchise contract, membership agreement or management contract is signed, a new hotel opens, or a reflagged property welcomes guests under a new name.
The franchise company promises a good delivery of business via the toll-free reservation system, but that method is not likely to deliver the bulk of guests needed for a hotel property to service its debt and turn a considerable profit. Eventually there will be numerous sources of guests, including satisfied customers who return to the property. But in its early weeks, hotels can't count on return business.
One of the most important aspects of a property opening or reflagging is the amount of free publicity such an event can sometimes generate through the local media, sources said. The smaller the town, the more likely a clever entrepreneur can turn the opening ofa hotel into a community event by attracting customers that will pay off for years to come.
Keith Pierce, president and c.e.o. of Wingate Inns International, said the more people an owner or operator can get to know in the local community, the better it will be for the property in an increasingly competitive market.
"Given that our properties are all new construction and the relative [newness of the chain], many of these first guests might be stay ing at a Wingate for the first time," Pierce said. "It becomes extra important to create favorable impressions that will benefit other Wingates."
Pierce said he puts regional directors in the field who help the owner and the operations team learn the basics of operating a hotel and lure customers through the door. Between three and four months before the scheduled opening, a pre-opening market review is conducted to determine where the first guests are likely to originate from, he said. Wingate helps the property develop an advertising plan, hire a director of sales and build a database that includes all possible sources of business.
"Our owners and propertymanagement teams are encouraged to...