Close Menu
Gulf Eye News
    Hot News
    Business

    Dar Global awards main works contract for ‘The Astera, Interiors by Aston Martin’ to Gulf Asia Contracting LLC

    Business

    Saudia and almatar partner to launch smart post-arrival services for corporate travelers

    Business

    Sohar International partners with “Oman Balloons” to elevate the Sultanate’s Tourism Landscape and drive In-Country Value

    Important Pages:
    • Privacy Policy
    • Terms & Conditions
    Facebook X (Twitter) Instagram Pinterest
    Gulf Eye News
    • Home
    • UAE

      Dar Global awards main works contract for ‘The Astera, Interiors by Aston Martin’ to Gulf Asia Contracting LLC

      CUD introduces new AI program to advance global leadership in artificial intelligence

      GFH signs partnership agreement with Dubai Cares to support education of children in the UAE

      Dubai’s Luxury Real Estate Market breaks record with 62.7% surge in AED10mln+ sales in H1

      MBZUAI’s Undergraduate Research Internship Program draws record global interest with projects for real-world impact

    • Politics

      Four Seasons Hotel London at Park Lane to Launch Newly Renovated Suites in Summer 2025: A New Era of Understated Luxury in the Heart of Mayfair

      Patron Capital Secures Major Investment From Mitsubishi Estate to Accelerate European Growth and Expand Into New Subsectors

      SHEGLAM Drops the Skin Tint + SPF That Does It All

      Etihad Credit Insurance (ECI) wins ‘Deal of the Year’ award during its participation as strategic sponsor at TXF Global 2025 conference in Copenhagen

      DGHR reinforces commitment to inclusive employment for people of determination across Dubai’s government entities

    • Business

      Dar Global awards main works contract for ‘The Astera, Interiors by Aston Martin’ to Gulf Asia Contracting LLC

      Saudia and almatar partner to launch smart post-arrival services for corporate travelers

      Sohar International partners with “Oman Balloons” to elevate the Sultanate’s Tourism Landscape and drive In-Country Value

      Google Cloud and Intelcia Partner to accelerate business transformation through unified data platform ‘MyData’

      Ottu and Ellucian partner to drive online payment innovation for educational institutes globally

    • Technology

      CUD introduces new AI program to advance global leadership in artificial intelligence

      ALKAN Telecom partners with Orbus Software

      The Markets Everyone’s Watching—Now on Stage at SBC Summit

      TikTok launches ‘Family Academy’ in the UAE to empower families with digital safety and wellbeing tools

      Darven: A New Leap in AI-Powered Legal Technology Launching from the UAE to the World

    Gulf Eye News
    Home » Gulf hotel owners switch to franchises in search of profits
    Business

    Gulf hotel owners switch to franchises in search of profits

    Facebook Twitter Pinterest WhatsApp LinkedIn
    Share
    Facebook Twitter LinkedIn Pinterest WhatsApp

    Hotel owners in the Gulf are increasingly choosing franchise agreements with international hotel brands over the less profitable direct management route, industry experts and analysts say. 

    This is especially true in the UAE and Saudi Arabia where the hotel industry is maturing and hotel owners know their business better, driving them to manage their own properties under franchise rather than sub-contract.

    Franchising is generally more profitable for the hotel owner and makes it easier for international brands to expand their network. 

    It is also typical of more mature markets such as the US, where the majority of hotels are run under franchise rather than managed directly by the company that owns the brand.

    “The franchise penetration rate is increasing as more owners seek cost-effective and flexible operating structures,” says Tatiana Veller, managing director of Stirling Hospitality Advisors in the UAE emirate of Ras Al Khaimah.

    “Saudi Arabia and Dubai, in particular, are experiencing a sharp rise in franchise adoption as owners grow more confident in managing hotels independently or through third-party operators.” 

    In January, for example, IHG Hotels & Resorts signed a deal with Saudi Arabia’s Al Harithy Group to rebrand a 193-key property on the Jeddah Corniche, which is due to reopen next year as The Venue, Vignette Collection Jeddah Corniche.

    The Vignette Collection is IHG’s newest luxury brand, and currently has 20 hotels operating under the name world-wide, with 35 more in the pipeline. Al Harithy Group is a real estate company based in Jeddah.

    In contrast to the more mature markets, as much as 80 percent of hotels in the wider Middle East region are managed directly, with the remainder under franchise, data from the global hospitality consultancy HVS shows. 

    International Hotels Group (IHG), for instance, the British company whose brands include Holiday Inn, InterContinental and Crowne Plaza, has a 50-50 split in Dubai between the 16 hotels.

    It has 3,800 keys under franchise and the hotels it manages directly, says Amith Khanna, who heads franchising for IHG Hotels & Resorts in India, the Middle East and Africa.

    IHG’s pipeline of franchised hotels versus directly managed hotels in Dubai is due to grow by around 40 percent over the next 12 to 18 months, Khanna says. 

    Of five hotels that IHG is due to open in the UAE in 2025, four will be franchises and only one will be managed directly, the company says.

    Overall in India, the Middle East and Africa, however, just over a quarter of keys are under franchise and the remainder are managed directly, Khanna says 

    Embracing global names

    The managed model is typical of less mature hospitality markets, as less experienced hotel owners skip doing everything independently and in-house, instead embracing global industry names and standards, such as IHG, Hilton Worldwide and Accor Group.

    This then involves the hotel operators running operations on the ground, and providing each hotel with their brand, style, quality guidelines and access to far-reaching booking systems. It is a “lot of headache” for the hospitality companies, and more expensive for owners, Khanna says.

    The upside of franchising is that the hotel owners have more say in how their hotel is operated and they pay lower fees to the brand, while in turn the brands find the  lighter franchising touch a better way to expand their network, Veller at Stirling Hospitality says. 

    The drawback is that the onus is on the owners, or a third-party manager, to run operations on the ground while still upholding the larger brand’s standards of quality.

    Along with the rise of franchising, the UAE is also experiencing a wave of managed hotels switching brands, or re-flagging, as global hospitality firms compete for prime properties while asset owners seek better contractual terms.

    Dubai Dubai news local media Middle east news News UAE UAE media UAE News UAE News today UAE newspaper
    Share. Facebook Twitter Pinterest LinkedIn WhatsApp

    Related Posts

    Business

    Dar Global awards main works contract for ‘The Astera, Interiors by Aston Martin’ to Gulf Asia Contracting LLC

    Business

    Saudia and almatar partner to launch smart post-arrival services for corporate travelers

    Business

    Sohar International partners with “Oman Balloons” to elevate the Sultanate’s Tourism Landscape and drive In-Country Value

    Business

    Google Cloud and Intelcia Partner to accelerate business transformation through unified data platform ‘MyData’

    Business

    Ottu and Ellucian partner to drive online payment innovation for educational institutes globally

    Business

    Ramco Systems partners with MCA Management Consultants

    Business

    Msheireb Properties Achieves Double Victory at Prestigious Real Estate Asia Awards 2025

    Technology

    CUD introduces new AI program to advance global leadership in artificial intelligence

    Stay In Touch
    • Facebook
    • Twitter
    Don't Miss
    Business

    Dar Global awards main works contract for ‘The Astera, Interiors by Aston Martin’ to Gulf Asia Contracting LLC

    United Arab Emirates: Dar Global, the London-listed luxury real estate developer, proudly announces that Gulf Asia…

    Saudia and almatar partner to launch smart post-arrival services for corporate travelers

    Sohar International partners with “Oman Balloons” to elevate the Sultanate’s Tourism Landscape and drive In-Country Value

    Google Cloud and Intelcia Partner to accelerate business transformation through unified data platform ‘MyData’

    Ottu and Ellucian partner to drive online payment innovation for educational institutes globally

    Our Picks
    Business

    Dar Global awards main works contract for ‘The Astera, Interiors by Aston Martin’ to Gulf Asia Contracting LLC

    Business

    Saudia and almatar partner to launch smart post-arrival services for corporate travelers

    Business

    Sohar International partners with “Oman Balloons” to elevate the Sultanate’s Tourism Landscape and drive In-Country Value

    Business

    Google Cloud and Intelcia Partner to accelerate business transformation through unified data platform ‘MyData’

    Business

    Ottu and Ellucian partner to drive online payment innovation for educational institutes globally

    Step into the realm of news like never before with Gulf Eye News. Delve into a world of breaking headlines, in-depth analysis, and captivating stories that define the pulse of the Gulf region and beyond. As we embark on this journey together, your feedback, inquiries, and press releases are invaluable to us.

    Facebook X (Twitter)
    Categories
    • Business (365)
    • Politics (23)
    • Technology (80)
    • UAE (285)
    Our Picks
    Business

    Bybit & Ethena Join Forces to Unlock Breakthrough Rewards & Efficient Collateral Management with USDe

    Business

    Goumbook Announces Semi-Finalists for the MENAT Regenerative Agriculture Venture Programme

    © 2025 Gulf Eye News.
    • Home
    • Privacy Policy
    • Terms & Conditions

    Type above and press Enter to search. Press Esc to cancel.