The annual AAHOA conference is generally marked by some news event or more often a controversy. No controversies this year, but a big news story is dominating this week's convention in Charlotte. The news was the announcement from former AAHOA Chairman and community gadlfy Mike Patel of the launch (technically a relaunch) of Budgetel, a new franchise-friendly economy brand that appeals to the Asian hotelier community's long-held dream of an Indian-American-owned brand.
In a nutshell, the new Budgetel will offer low fees (around three to four percent), one-year agreements, no liquidated damages and an opportunity for franchisees to become equity partners in the company. Brand founder Patel says the brand "will live up to the spirit of AAHOA's 12 points of fair franchising," the group's hot-button issue since Patel championed the cause during the chairmanship in 1998-99.
The real question, of course, is will the brand succeed? Also, does the industry need another brand, particularly in the economy segment? And with this brand will Patel be able to meet the high expectations most Asian-American hoteliers have from a chain that's owned by a member of the community?
The good news is that Budgetel denotes a clear identifier of its segment and that Budgetel has some built-in consumer awareness. (Budgetel is the former name of Baymont Inns. Marcus Hotels sold Baymont/Budgetel to The Blackstone Group, which then sold Baymont to Wyndham and the Budgetel branding rights to Patel.) Also, Patel and his executive team have plenty of experience in the franchised hotel world.
The real issue in my mind is whether hotel owners need another franchise-friendly brand from which to choose. Companies like Accor, La Quinta and particularly Vantage Hospitality have grown quickly in recent years by staying in touch with the real and perceived needs of the hotel ownership community. Still, I wouldn't bet against Mike and his organization. He's smart, well-connected, politcally savvy and a winner in everything else he's ever attempted. Brand companies like Choice and Wyndham need to watch their backs.