Hotel Agreements 101
Management, lease, franchise and hybrid agreements explained for owners.
Read →NINE BLOCKS · ONE RATIONALE
EXC
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The Hospitality Business Model Canvas
How an organisation creates, delivers and captures value — Osterwalder's nine building blocks, worked for a luxury hospitality platform.
VIKRAM ADITYA SINGH · WORKED EXAMPLE — FACET HOTELS
THE TEST
Every canvas answers three questions.
DESIRABILITY
Is there customer demand for the products and services?
FEASIBILITY
Can the company deliver them, day after day?
VIABILITY
Can it be profitable while it does?
THE CANVAS — FACET HOTELS
READ LEFT TO RIGHT: HOW VALUE IS BUILT → PROMISED → DELIVERED → EARNED
01 · KEY PARTNERS
Owners of properties · Preferred Hotels · PR, social-media & creative agencies · Legal & finance consultants · Banking partners (HDFC) · OTAs & travel agents · Travel magazines · Wedding planners · Airlines · Government travel bureaus · Convention centres · Destination management companies · Smith Travel Research · App development · IT infrastructure & platforms · Beverage sponsors
02 · KEY ACTIVITIES
Hotel & resort operations and management · F&B operations · Spa & wellness · Gym & fitness club · Leisure & retail services
03 · KEY RESOURCES
Intellectual property of hotel design, development, operations & management · SOPs and policies · Trained, engaged management and employees · Access to working capital
04 · VALUE PROPOSITIONS
Luxury accommodation · 24-hour personalised, caring service — seamless across every touchpoint of the guest journey · State-of-the-art connectivity & technology · Restaurants & bars serving both comfort and the cutting edge · Safety, security & hygiene · Wellness & fitness
05 · CUSTOMER RELATIONSHIPS
High loyalty factor · Net promoter scores · One-to-one guest connect with leadership · Personalised UX & CX · I-Prefer loyalty · Senate Club membership
06 · CHANNELS
Omni-channel sales & marketing · Direct (B2C) · Merchant (B2B) · Voice · Email · Website · GDS — Synxis, Sabre · Walk-in · Metaverse platforms
07 · CUSTOMER SEGMENTS
TRANSIENT — Business · Leisure · Retail · OTA
CONTRACT — Membership · Long stay · Local F&B
GROUP — Social · Military · Educational · Religious · Fraternal · Government · Embassy
08 · COST STRUCTURE — THE 40% GOP DISCIPLINE
Asset-light model going forward · Fixed costs < 35%, variable costs < 30%, GOP > 35% · Variable payroll structure — 50 fixed / 50 variable · WACC 12%, equity hurdle rate 20% · Lifestyle pricing for F&B — value-based, never cost-based
09 · REVENUE STREAMS — ₹100 CR GOP OWNED · ₹50 CR MANAGED
Management contracts — hotels & resorts, restaurants, spas, residences · Operations — rooms, F&B, wellness, membership · Asset management services & hospitality business advisory · Design & project consultancy
AFTER OSTERWALDER (2005) · THE NINE BLOCKS AS FIRST WORKED BY VIKRAM ADITYA SINGH FOR FACET HOTELS · FIGURES ILLUSTRATIVE — RE-VERIFY AGAINST THE LIVE MODEL BEFORE ANY DECISION
“A business model describes the rationale of how an organisation creates, delivers and captures value.”