Europe is likely to see the opening of more branded hotels as franchising gathers pace amongst operators, according to a new report from global hotel consultancy HVS.
Although around two-thirds of European hotels currently remain unbranded, it is expected that an increasing recognition of the strength of hotel brands and brand affiliation will encourage the concept to expand.
HVS's report, Hotel Franchising in Europe, outlines the fact that franchising agreements enable rapid expansion for brands entering new markets. The franchises are increasingly operated with the assistance of independent management companies, with the franchisor providing the brand name and marketing platform and the independent management company offering the expertise to manage the hotel.
Sophie Perret, co-author of the report and HVS London director, said: "There is clearly a huge opportunity for growth of branded hotels in Europe, including franchises. A few years ago hotel operators were keener on management contracts. Now, franchise contracts are equally as likely to be proposed to owners by the brands.
Lucy Payne, the report's co-author, added: "Independent management companies have a good track record and are an efficient way to grow brands. Their nimbleness certainly remains a key advantage compared with the heavier corporate structures of established brand operators.
"We don't expect the franchise sector to grow in Europe to the extent it is popular in the US; however, we do expect a significant uplift over forthcoming years."
Around 70% of hotels in the US are branded, half of which are held under franchise agreements.