It may be the third certainty after death and taxes: that people like to travel. For potential franchisees, investing in a franchise in this niche can mean extending a personal interest as well as uncovering a lucrative market. To illustrate the range of franchises in this space, Franchise Canada profiles three travel franchise opportunities that reveal a spectrum of options: hotels, cruise travel planning, and corporate travel agenting.
You don’t need to be a hospitality industry expert to understand that today’s hotel business is becoming increasingly complex. A single online search for accommodations provides the user with a remarkable variety of options, from hotel discount sites to loyalty programs to options to rent a stranger’s bedroom. Not surprising then that Choice Hotels, one of the largest and most successful lodging franchisors in the world, puts its ability to share resources at the top of its sales pitch to franchisees.
“It’s a very compelling value proposition, when you look at trying to operate independently as opposed to being part of a system like ours,” says Brian Leon, President of Choice Hotels Canada. The company traces its roots in Canada back to 1955, although it was formally established in Canada in 1993. Today the franchise boasts 340 hotels open or under development from coast to coast. These include several brands, from the economy-focused Econo Lodge, to midscale brands like Comfort Inn and Quality Inn, to the upscale Ascend Hotel Collection.
Unlike most franchises, a hotel is a larger investment partly because of the real estate component in an industry where you buy land and own the building, rather than lease it. “Franchise fees in the hotel industry are similar to what investors may expect in the food service or retail industries, typically $25,000 to $50,000. The big cost is in purchasing or building the hotel, which is typically several million dollars. So, it’s both an investment in real estate and an operating business, which is one of the things that attracts so many to the industry,” says Leon.
As a result of the significant upfront capital required, franchisors are often open to multiple ownership, such as a key operating partner with four or five financial partners. Leon says franchisees come from all walks of life and don’t need travel experience, although business experience is useful. Many franchisees oversee the operation and hire for roles like general manager.
Leon says that franchisees point to Choice Hotel’s industry leading distribution resources as a key benefit. “Our central reservation system drove over two million guest nights to our hotels in Canada last year.” He also emphasizes the importance of a strong loyalty program. “Ours is world-class, with more than two million members in Canada and over 40 million members worldwide.” This is rounded out with a sales team spread across the country that pursue corporate accounts, association, travel and tour business for their hotels.
Franchise opportunities include both new builds and buying existing hotels. The team at Choice Hotels advises on which brand will suit which market, and helps with the redesign and renovation when people bring existing independent hotels into the system. “With more than 7,000 hotels globally, the depth of resources that we have is pretty significant,” says Leon.
In its 2019 report, the Cruise Lines International Association (CLIA), the world’s largest cruise industry trade association, predicted that 30 million passengers will go on cruises this year. CLIA further projects that number to grow to 40 million annually by 2027. Not only are they growing in popularity, but cruises have also extended their image to attract a wider demographic of younger travelers and multi-generational groupings of families cruising together.
With over 290 locations open or in development throughout North America, including 170 in Canada, Expedia CruiseShipCenters is a franchise system that’s meeting the demand for personalized attention and guidance in what can often be a complex and sometimes expensive holiday purchase. Bob Tipple, Vice President of Franchising, notes that one out of every three cruises in Canada is sold by Expedia CruiseShipCenters.
Founded in Vancouver in 1987, CruiseShipCenters partnered with Expedia in 2007. The brand power of its global parent company has become one of its strongest selling points with over $99 billion in global buying power to create close partnerships with travel suppliers. “The more ships that are built, the more they need our help with filling the cabins. It’s a win-win scenario and allows for a true symbiotic relationship,” says Tipple. The Expedia connection also means that CruiseShipCenters can provide their clients with the full vacation package, including flight, hotel, and car rental offerings.
Franchisees don’t need to be travel business veterans, although Tipple notes that many are already passionate about travelling and cruising as consumers. Tipple says he looks for franchisees with mentoring abilities who can help coach their travel consultants, and have an eye for finding consultants with the people skills, trustworthiness, and patience to guide customers through a complex booking process. Franchisees should have an outgoing nature to help build relationships within the community they serve.
“It’s not the type of business to be shy. Not only do you need to love travel, you need to love people. You have to be the type of person that can turn around in a grocery store lineup and engage somebody in a conversation about travel or cruising,” says Tipple.
Franchise training includes a week at head office in Vancouver, including training on the company’s proprietary booking program, CruiseDesk. Self-guided online courses, access to franchise coaches, quarterly calls with the leadership team, and an annual franchisee conference (held on a cruise ship of course), round out the support offering.
While the franchise is virtually sold out of new market areas across Canada, resales come up occasionally, and following the brand’s entry into the United States seven years ago, Tipple anticipates opening over 250 centres in the next few years. He says that several Canadians have worked with the franchise to get an E2 Visa to move to the U.S. and start a business there. “It’s actually a much easier process than you might think”, says Tipple.
UNIGLOBE Travel International
While booking flights and hotels is synonymous with going on vacation, think of how many people travel for business and the opportunity that the corporate travel sector provides becomes clear, especially in an increasingly globalized world.
UNIGLOBE Travel International has been in the corporate travel booking business since it first opened up in Vancouver in 1980. Today, the business has expanded into the U.S., Europe, Middle East, Africa, India, and Asia Pacific with a presence in 60 countries. Several Canadian markets are still open to expansion too.
As a business-to-business operation, UNIGLOBE is focused on assisting mid-sized companies that need to book a large number of business trips per year. “If you are spending $1 million or even $250,000 a year on travel, you want to know how you’re spending your money. We work as a consultant to advise and make suggestions about how the corporation can stretch its travel dollar,” says Martin Charlwood, President and COO of UNIGLOBE Travel International.
Besides providing access to special incentives and discounts, the franchise is also called upon to consult on developing travel policies within the organization (for example, which seniority levels get to fly business class over economy or rent a larger car) and then to streamline enforcement of those rules.
UNIGLOBE looks for entrepreneurial, sales-oriented franchisees. A travel background is less important. Typically, the franchisee builds the business and focuses on marketing, finding clients, and travel agent recruitment. The business also sells conversion franchises, providing its branding and reach to existing travel agencies or agents with a clientele already built up.
Training includes all new franchisees attending a four-day International Management Academy located at the head office in Vancouver, with ongoing phone and online support. The franchise has 11 international regions with a master franchise operation in each geographic territory, including several in Canada.
UNIGLOBE offers travel and technology services to both franchisees, and by extension to end-user customers. For clients they include a client portal for corporate bookers, travel advisory notifications, an app for the individual traveler, and a search tool for finding the lowest booking prices with the corporate travel policies built in. The franchisee has access to a customer relationship management tool, a UNIGLOBE Reporter tool to help find savings across client organization, and a global network fare finder.
Charlwood says that the franchise’s longevity and its buying power are two of its most attractive factors. “Being part of a global network is the biggest offering that we provide. This allows smaller businesses to gain more business, and it allows smaller companies to gain access to travel management technologies, products, and services at much better pricing than they can get on their own.”
By Suzanne Bowness