Dual-Branded Hotels Could Increase Efficiency, Rely On Occupancy Hotel construction is up (January 2015 posted a 31.8 percent increase over January 2014), and developers are taking advantage of the increase to premiere a new type of hotel: the dual-branded model. Dual-branded hotels combine two, distinctly branded hotels in one building. Usually, there are two separate entrances, lobbies, front desks, etc., but the two brands share back-of-the-house operations and guest amenities. At the end of 2014, there were 30 dual-branded hotels with a total or 12,193. At the beginning of 2015, another 24 dual-branded hotels for a total of 10,284 rooms under construction. In theory, dual-branded properties should allow both brands to offer more for less, since they would optimize efficiency and decrease overhead costs. Do they actually work? To find out, AAHOA Lodging Business analyzed data from PKF Hospitality research. They examined seven properties, comparing them against properties with comparable average daily rate, location, room count, property type, occupancy, and affiliation data. What they discovered is that dual-branding does not necessarily mean increased efficiency. Of the seven properties, only three posted a gross operating profit margin (GOP) greater than their comparable properties. Three posted a lesser GOP margin, and one posted a very similar GOP margin to its comparable property. Interestingly, the three properties that had a GOP margin that was greater than their comparable properties had the highest occupancy levels; combined, their occupancy level was 82 percent versus the 68.3 percent occupancy rate for the other four properties. This indicates that occupancy might be the key to achieving efficiency in dual-branded hotels. Whether you want to pursue the dual-branded model or are building a traditional hotel, you deserve to have the hospitality construction experts on your side. For all of your construction needs, contact Parkwest General Contractors. From minor remodels to from-the-ground-up project managements, we are here to tailor our services to perfectly meet your needs on your budget.