Hotel Franchising on the Rise in the Middle East and Asia

Hotel franchising is gaining momentum in the Middle East and Asia, presenting significant opportunities for hotel owners and investors. In Southeast Asia, the number of hotels operating under franchise agreements has doubled in the past decade, rising from 3% to 6% of the market in 2024. 

This growth is driven by hotel owners seeking to leverage the reputation, expertise, and distribution networks of established global brands like Marriott International, Hilton Worldwide, Wyndham Hotels & Resorts, Choice Hotels International, and Intercontinental Hotels Group. These major brands are also shifting towards asset-light strategies, further fueling the trend.

The appeal of franchising lies in the ability of hotel owners to tap into renowned brands’ loyalty programs and benefit from their marketing prowess. While the franchise model is well-established in the West, with 75-80% of properties in the US and 60% in Europe operating under franchise agreements, it is still in its early stages in Southeast Asia. 

However, this is expected to change rapidly, with projections indicating that 30-35% of hotels in the region will adopt the “white label” model, where owners hire third-party operators to manage day-to-day operations, within the next five years. Thailand is particularly poised to embrace hotel franchising.

The growth of hotel franchising also extends to the Gulf region, where global hospitality brands are expanding aggressively. This expansion provides hotel owners with more freedom to choose how their hotels are run, with some opting for franchising agreements and third-party management arrangements. 

The six largest hotel operators in the UAE – Accor, Marriott, Hilton, Rotana, IHG, and Millennium – have a combined portfolio of over 81,000 rooms, with an additional 23,300 in the pipeline by 2030, indicating significant expansion plans.