COVID-19 put several businesses across verticals in a tailspin. Amongst these, the hospitality industry has been one of the worst-hit, particularly at the outset of the crisis.
Towards the latter half of 2020, the industry moved swiftly to mitigate the impact on business by reducing costs, pivoting to digital platforms, and overall recalibrating their business models to adapt to the current scenario. However, the impact and devastation the pandemic has left in its wake are sizeable and likely to be long-lasting.
While hotels and operators are yet to make a full recovery from the plummeting economy, the pandemic’s second wave brought new challenges to the fore. For instance, OYO Hotels and Homes, which was valued at $9 billion after a fresh infusion of capital, faced a petition filed by a creditor who initiated insolvency proceedings against the organisation.
Later the Delhi High Court had ordered that issue had been resolved as the petitioner specifically stated the same and thus withdrew the petition. Such cases set poor precedence of coercing startups, regardless of whether they are unicorns or not, into paying a debt.
Now, the million-dollar question is, what is the ideal business model that industry players can adopt and what is the way forward? Before we delve into the answer, one needs to gain an understanding of the three main franchise business models present in the hospitality and real estate segments.
UNDERSTANDING THE BASICS
Company Owned Company Operated (COCO), Franchise Owned Company Operated (FOCO), and Franchise Owned Franchise Operated (FOFO) are the three main business models. In the COCO model, companies often take long-term leases of the property and operate it since purchasing is often not feasible.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
The Big Fat Indian Wedding
With a slew of initiatives, hotels are ensuring that the wedding day is special for the couple as well as for the hotel's bottom line.
An Organization Of Rainmakers!!!
Rainmakers are revered for their ability to generate income (rain) for an organization by cracking deals, attracting clients/guests and holding on to them; often, for a lifetime... Revenue generation (rainmaking) is the job of everyone on the team.
Hospitality: A Rewarding Career Awaits
Delving into the roles and responsibilities that professionals in the field of hospitality can undertake in carving a rewarding career.
"India is my first baby!"
Bader Ali Habib, Regional Head of Proximity Markets, Dubai Department of Economy and Tourism, gets candid.
The Essence of Landscape Architecture
Innovative landscaping can enhance the luxury hospitality experience by enriching guest interaction with the natural world.
Teaching the Art of Tea
The first global tea artist from India, teaching the art of making and drinking fine tea, Susmita Das Gupta talks about her mission to make Indian specialty tea reach a global audience.
Feeding Profits
Food and beverage is driving revenues in hospitality in novel ways as hotels innovate with new-age experiences.
Acing the Revenue Game
Hotels are looking at new avenues to generate revenues that go beyond rooms and food.
The Power of Predictive Maintenance
A strategic approach to enable Indian hotels to become leaders in sustainable hospitality.
Shaping a Sustainable FUTURE
To mark the occasion of World Environment Day this month, we find out how the hospitality industry is paving the way for a greener, healthier tomorrow...