Perpetual Termination Jockeying In the Hotel Franchise World Jan. 2016
By: Jeffrey M. Goldstein
Seemingly, more than in other franchise niches, hotel franchises seem to be signed-up and then discarded by schisophrenic hotel franchisors. On any given day any particular hotel can be a ‘perfect fit’ for the brand, and, then, 6 months later, after initial fees have been paid to the franchisor, and after another newer or larger potential replacement property coincidentallybecomes available in that market, the initial hotel is deemed a ‘terrible fit.’ Usually observers justifiably focus on the negative financial impact of questionable terminations on the hotel owners (franchisees) themselves, without too much consideration regarding the impact on the hotel brands. Below, however, it is difficult, after reading the article, to come away with a good view of the franchisor, Ramada.
Further, it looks like Ramada is having to get into the weeds itself to deal with the unhappy guests whose vacations have been scuttled by the termination. Why was the owner of the hotel allowed initially to purchase the brand? How realistic (financially and temporally) was the list of repairs demanded by the franchisor on the hotel owner? What assistance did Ramada directly provide to the owner to help it meet the chalenges? How swiftly did Ramada meet the requests for assistance that were made by the franchisee for assistance?
The Gold Coast Bulletin (Australia)
December 9, 2015 Wednesday, GoldCoast Edition
Copyright 2015 Nationwide News Pty Limited All Rights Reserved
Section: NEWS; Pg. 3
Length: 432 words
Byline: JENNY ROGERS EXCLUSIVE
WYNDHAM” Hotel Group has withdrawn the global Ramada brand from the -Couran Cove resort over concerns its reputation is being damaged.
It had terminated the Ramada franchise agreement and served the resort operators with notices of alleged breaches of the agreement, Barry Robinson, Wyndham Hotel Group president and managing director, Asia Pacific, said yesterday.
“The Ramada brand will no longer be associated with Couran Cove,” Mr Robinson told the Bulletin.
“We have terminated the Ramada brand because we -decided the resort was not meeting brand standards for quality of service.
“We want to ensure the brand is protected.” Mr Robinson said Wyndham had set up a hotline for tourists who had booked to stay at the resort but wanted to be relocated.
“We are doing our utmost to help as many of our customers as possible who have booked under the Ramada brand and want to leave,” he said.
“We are hoping the resort will still honour those bookings but we will do our best to find alternative accommodation for any guest who wants to leave.” Mr Robinson said Wyndham, which owns the Ramada brand, had raised concerns several months ago about the way the resort was being -operated.
The termination of the Ramada brand comes after the Bulletin revealed yesterday that administrators had been appointed to the resort managers, CCH Services, and several staff had been made -redundant.
“We have had concerns about the operation of the -resort for around four or five months,” Mr Robinson said.
“We are also concerned that a number of suppliers have not been paid.” Couran Cove was rebranded the Ramada Couran Cove Island Resort in 2013 after it was bought by Brisbane businessman Craig Dowling.
It was the first Ramada property on the Gold Coast in more than a decade. Mr Dowling at the time said being linked to the global chain meant the resort would be marketed around the world and had the backing of an internationally experienced hotel brand.
There are more than 830 Ramada properties in 60 countries worldwide, including 17 in the South Pacific – 12 in Australia and five in New Zealand.
Mr Dowling has since been trying to sell the resort and -recently signed a deal for about $5 million with hospitality -industry player Andre Praglowski which failed to go ahead after due diligence.
Mr Robinson said Wyndham had also looked at acquiring the resort but could not agree on a price.
Guests who want to be relocated from Couran Cove should call Wyndham’s Customer Care team on 1800 021130.Greg Rekers, from Couran Cove Island Resort Pty Ltd, the resort’s new managers, did not return the Bulletin’s calls.
Journal Code: Gold Coast Bulletin
Subject: MANAGERS & SUPERVISORS (90%); AGREEMENTS (90%); CUSTOMER SERVICE (73%); BRANDING (73%); APPOINTMENTS (72%)
Industry: HOTELS & MOTELS (90%); HOTEL CHAINS (90%); RESORTS (90%); BRANDING (73%)
Geographic: BRISBANE, AUSTRALIA (79%); PACIFIC OCEAN (79%); AUSTRALIA & NEW ZEALAND (79%); AUSTRALIA (79%); NEW ZEALAND (79%)
Load-Date: December 8, 2015