More and more hotels are de-flagging from the brand franchise and becoming independent. Read about the top five reasons why hoteliers are de-flagging in this SlideShare.

1. Top 5 reasons
why hoteliers are de-flagging
their properties

2. In a competitive world, there is no scope
for carrying slack, be it under performing
properties or assets. Hotels are not hesitant
anymore about cutting the cord from
what is holding them back. This practice is
termed as de-flagging.

3. What is de-flagging for hotels?
• De-flagging is the practice of hotel operators becoming
independent of their brand franchisers.
• It is a situation wherein the hotel loses the backing of its big
brand franchiser.
• Most of the hotel owners look to de-flag hotels because they
do not get a proper Return on Investment.
• Property owner starts facing decreased cash flow and
increased capital expenses.

4. Most common reasons for de-flagging hotels

5. The economic slowdown
Hotel groups may not be able to foot the bill
for the operational expenditure that they
once did. It is a situation where financial
dynamics are drastically altered.
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6. Making the move to a more creative outlet
Properties need to adhere to specific
standards when they operate under the
umbrella of a major brand. Those properties
that do not want to be held back by stricter
set of rules defined by their (franchisor)
brand, may want to make their own.
2

7. Falling numbers
Many at times, property management may
realize that they can do better on their own,
without depending upon big brand labels.
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8. Going boutique
The boutique hotel market is fast
evolving segment that is attractive
and lucrative. Travellers seeking a
new experience are willing to give
independent hotels a chance.
Hence many properties that has the
fund to make the switch, are getting
the boutique makeover.
4

9. Brand makeover
When the property is not willing to be
associated with a particular brand or
name-tag, they can de-flag themselves
and transform into a brand new
independent property.
5

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