OWNERSHIP AND AFFILIATION: this provides another means by which to classify hotels i.e. independent hotel and chain hotels,
INDEPENDENT HOTEL: These are family owned and operated hotels that is not required to confirm to any policy or procedure’s, they also do not need to adhere to a particular image and can offer a level of service geared towards attracting a specific target market and can quickly adapt to changing market condition. However these hotels do not enjoy the advantage of volume purchase, advertising exposure or management insight and consultancy power of a chain hotel.
CHAIN HOTEL: Chain hotel ownership can take a number of forms. Depending on the association that the chain organization has with each property. These hotels usually impose certain minimum standards, rules, policies, and procedures, which is to be followed by other properties of the same chain. These hotels are usually classified as operating a management contract or as a franchise or referral group.
MANAGEMENT CONTRACT HOTEL: These hotels are the properties owned by other entities. Under this type of contract, the owner or developer usually retains the financial and legal responsibility for the property, the management company pays its expenses and in turn receives an agreed upon fee from the owner or developer and the remaining cash goes to the owner who also pays for debts, insurance, taxes.
FRANCHISE AND REFERRAL GROUP: Franchising is simply a method of distribution whereby one entity that has developed a particular pattern or format for doing business. The franchiser usually provides a strong brand name, national and international central reservation system, management training programs, advanced technology, and central purchasing services.
Referral groups consist of independent hotels, which have joined together for some common purpose. While each property in the referral system is same but there is no similarity in the quality of service and guest expectations. Hotels within this group refer their guests to other affiliated hotels. With this kind of an approach a hotel may gain a much greater level of exposure.