Magnuson introduces the Googlization of Hotel Franchising.
November 8, 2007
Spokane, WA – Every couple of decades, major industry transformations occur. In the 1980s IBM ruled the world with the age of computers. Then a young Bill Gates foresaw that the new world engine was actually software. Quickly but invisibly, Microsoft displaced IBM as the titan of commerce.
In the years that followed, Microsoft’s operating system became a global monopoly. Who could ever unseat Microsoft? Not the EU, not the US Government.
And then along comes Google, and the life cycle progressed further from the era of computers to software, to the Internet. No longer were consumers locked into one operating system with little choice.
Google developed free email, word processing, spreadsheets and office applications with a unique approach. Google and its applications were easy to use, and they were free.
Why buy expensive software that requires licensing and upgrades when you could get it for free? That knocking sound at the door? The beginning of the end of the monopoly.
For decades, hotel owners needing access to brand marketing, travel agents and worldwide reservation systems have had to go through high priced hotel chains like Best Western, Holiday Inn, and Ramada. Combined brand and royalty fees often average 15% of gross; not unlike having a 1/3 partner who shelves all the debt to the property owner. The list gets longer and more expensive with membership fees, special assessments, long term contracts, liquidated damages, required hotel renovations.
Enter Magnuson Hotels’ 3 new Payback Brands and the Googlization of Hotel Franchising. No brand fees, no marketing fees, no major requirements, just an elective set of choices for the owner to make, with a cash brand rebate paid to the hotel as a volume discount based upon Magnuson Hotels’ documented reservation contribution.
Judging by the attitudes of hotel franchisees, hotel franchising may have entered the beginning of the one way slide. AAHOA, which represents 50% of the US Lodging supply, has fought valiantly for franchisee rights, with its 12 points of fair franchising initiatives. The overall relationship between franchisors and franchisees was recently described by one industry statesman at a Phoenix Brand CEO summit. “You hold the vegetables, I’ll cut them.”
Will hotel owners like complete brand power with no brand fees? Will Magnuson Hotels’ payback brands succeed? Fed up with the demands of their record label, British rock superstars Radiohead just released their new album direct to fans online, letting them name their own price. The result? 1.2 Million copies the first day.
Freedom from the dominance of one system that is expensive, one-sided and indifferent to customer needs? Give people what they want at a fair price?
If it’s happened before, it just could happen again. Will somebody get the door?
About Magnuson Hotels, the fastest growing hotel chain in history.
In only seven years, Magnuson Hotels headquartered in Spokane, WA has become the world’s largest independent hotel group, representing nearly 1500 hotels and a combined affiliate base with assets in excess of $5.5 Billion. One of the top 10 global hotel chains, Magnuson Hotels was the #1 Hotel Company of Inc. Magazine’s 2009 annual ranking of the 5,000 fastest growing privately owned U.S. companies. With a four year reservation sales growth of 595%, Magnuson Hotels is listed in the top 100 U.S. business services companies.
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