This study aims to examine the effectiveness of branding through franchising and hotel membership affiliations in Europe, where the chain penetration rate is still relatively low, albeit growing slowly, and where hotels are limited by historical preservation codes and building restrictions.
Although branding through affiliations has been a successful strategy in North America for decades, little is known of this strategy in Europe, where the fragmented hospitality industry comprises small and medium‐sized independent enterprises which are being subjected to increasing competitive pressure from large global chains. This exploratory study, using a purposive sample, examines the factors that European independent hotels consider before committing to a third‐party brand and whether they perceive their decision to have improved their overall performance.
It is revealed that these hoteliers perceive that they had significantly improved their overall market position situation without losing a large part of their uniqueness, independence and management control. Notwithstanding, some of the hoteliers were not satisfied with every aspect of their brand selection and it was concluded that the degree of success would be highly contingent on careful selection of the appropriate kind of branding tool option for each situation.
The main issues have been identified for hoteliers to consider when selecting a brand affiliation as well as the key components for the branding companies to include in their offers. Recommendations are provided for both.
Decision‐making criteria are provided for hoteliers in the form of a checklist to use including benefits and risks and other considerations, as well as a checklist of key success factors of leading hotel branding companies.
