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International Ho tel Company Ma

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Dr. Jeffrey M. Wachtel

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Sole Ownership

• Method: Acquisition of An Existing Hotel or Entire Company

• Examples: Marriott purchasing New Wor ld Hotels & Renaissance or Building the

new Hyatt Hotel in Hua Hin, or Conrad inBangkok• Advantage: Highest Possible Financial Reward• Disadvantage: Most Economic Risk if Pol

itical Crisis Develops in Host Country. E xample: Havana Hilton Take Over By Cu

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Joint Venture

• A Partnership of Domestic and Foreign Company• 51%/49% Split Required by Some Companies• Commonly Used in Most Developing Countries• Local Partners Have Local Host Country Knowledge• Advantages: Technology Transfer, Global Exposure• Examples: Jingao Hotel in Beijing

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Franchising

• Very Popular with Restaurants (McD onalds, Sizzler)

• Sheraton Corporation (No in Europe) , Best Western.

• - Advantages: Reduces Start up Costs , Minimal Risk to Franchiser.

• Disadvantages: Global Legal Disput es, Quality Control Difficulties.

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Management Contract

Companies• Local Owners Hire Professional Management Co. Po

pular in Asia.• Advantages: Low Risk International Expansion with

Limited Investment, Possible Good Return (e.g. 2% Revenue, 10% GOP)

• Advantages to Host Country: Management Technol ogy Transfer

• Two Major Types of Management Companies: 1. Bra 2nd Name: Accor, Sheraton and . Independent Man

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Strategic Alliance

• A Cooperative Agreement Between 2 or Mor e Hot el Compani es

• Example: Dusi t Hot el s Recent l y Cr eat ed Al l i ance Wi t h Ot her Hot el Compani es i n Ot her Asi a

n Nat i ons• Example: Four Seasons of Toronto and Hong

Kong’s Regent International became World’s Largest 5 Star Chain with Alliance.

• Advantage: InstantExposuretoaForeignMar ket . Capi t al i ze on Each Compani es Strengths, SharesOperationalCosts, Reser vat i on Syst ems et c. et c.

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Consortia

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ollow Standard Procedures and Have Standard Products.• Initiation Fee and Annual Dues Paid.• Examples: REZsolutions Inc., Golden Toulip Worldwi

de Hotels• Appeals to Independent and Small Property Owners

Who Want to Keep their Autonomy but Have GlobalServices.