Evaluating Brand Positioning and Operating Model
- 3 days ago
- 7 min read
Does Your Current Operator Match the Post-Conflict Consumer?
The traveller who books your hotel after this crisis may not be the same traveller who booked it before.
This is not speculation. It is the consistent pattern across every post-conflict hospitality recovery in modern history. Source markets shift. Booking behaviours change. The attributes that drive hotel selection — safety, flexibility, value perception, brand trust — are reweighted. Segments that dominated pre-crisis (corporate groups, incentive travel, wholesale leisure) recover on different timelines. And the competitive set that existed before the disruption may look very different afterward, as weaker properties exit and survivors inherit market share.
For owners, this means that the brand and operator relationship that was optimal for the pre-crisis market may not be optimal for the market that emerges. This article provides a framework for evaluating that alignment — not as an argument to change operators, but as a discipline that ensures the most consequential commercial relationship you hold is positioned for the future, not anchored to the past.
The analysis described in this article is substantial. It is also the type of strategic work that neither the operator (who has a conflict of interest), nor a generalist consultant (who lacks the industry-specific financial acumen) is positioned to deliver objectively. Owners who invest in this analysis now, guided by advisors whose sole fiduciary obligation is to the asset, will make better decisions than those who rely on the parties whose interests are being evaluated
Three Questions Every Owner Should Ask
Question 1: Does Your Brand Resonate with the Source Markets That Will Recover First?
Post-conflict recovery does not restore the pre-crisis demand mix. It creates a new one. Intra-regional GCC travel typically leads recovery because it faces the fewest barriers: no visa friction, short flight times, cultural familiarity, and real-time security awareness that makes regional travellers more comfortable returning before long-haul visitors. Asian source markets — China, India, Southeast Asia — often follow, driven by price sensitivity that post-conflict rate environments satisfy and by growing air connectivity that may have been established before the crisis.
Western European and North American leisure travel is typically the last segment to recover, constrained by lingering travel advisories, media-driven risk perception, and the availability of alternative destinations that do not carry conflict associations.
The implication for brand strategy is direct. If your hotel carries a brand whose recognition, loyalty base, and distribution strength are concentrated in Western markets, you may be holding a powerful asset that is temporarily disconnected from the demand that is actually available. A brand with strong recognition in GCC markets, India, or China may deliver faster recovery even if its global footprint is smaller.
This does not necessarily mean changing brands. It means demanding that your operator redirect sales and marketing resources toward the source markets that are recovering, rather than maintaining budgets and team structures calibrated for a demand mix that no longer exists. If your operator cannot or will not make that pivot, the misalignment is real and should be addressed.
Question 2: Does Your Brand’s Cost Structure Match Your Recovery Economics?
International hotel brands carry cost structures designed for high-demand environments: system fees calculated as percentages of revenue, marketing contributions funding global campaigns, loyalty program costs subsidized by property-level charges, and technology platform fees that do not flex with occupancy.
During a prolonged downturn, these costs become a disproportionate burden. A system fee of 4–5% of gross revenue is manageable at 70% occupancy. At 20% occupancy, the same percentage represents a much larger share of your diminished operating profit. Marketing contributions funding campaigns in source markets that are not travelling to your destination represent a direct misallocation of scarce resources.
Owners should conduct a comprehensive brand cost audit during this period. Map every fee, charge, and contribution your operator levies. Calculate each as a percentage of current revenue and current GOP — not the budgeted revenue that no longer exists. Present the results to your operator and demand a discussion about temporary adjustments that reflect current reality. Some operators will engage constructively. Others will point to contractual language and decline.
If your operator declines to adjust fees during a period of extraordinary duress, that response is itself useful information for your long-term evaluation of the relationship.
If your operator declines to adjust fees during a period of extraordinary duress, that response is itself useful information for your long-term evaluation of the relationship.
Question 3: Is Your Current Positioning Right for the Post-Conflict Guest?
The post-conflict guest — whenever they arrive — will be influenced by two psychological dynamics that reshape brand preference.
The first is a heightened sensitivity to safety and transparency. Guests returning to a post-conflict destination want visible evidence that their well-being has been considered: flexible cancellation policies, clear communication about security measures, and a sense that the hotel operates with their concerns in mind. Brands that project warmth, attentiveness, and genuine care will outperform brands that project scale, efficiency, and standardization. This may favour lifestyle and independent brands over legacy corporate chains — or it may favour whichever brand demonstrates authentic empathy, regardless of category.
The second is a shift in value perception. Post-conflict markets typically experience a period of rate compression as hotels compete for returning demand. In this environment, the guest’s perception of value becomes more important than absolute price. A hotel that offers a compelling experience — excellent F&B, thoughtful wellness programming, distinctive design, memorable experiences and service — at a competitive rate will capture market share from a hotel that offers a standardized product at the same rate. The brand or operator that enables you to deliver that distinctive experience is the right partner for recovery.
The Franchise Question
Every period of owner-operator tension accelerates the conversation about franchising. The logic is appealing: retain the brand’s distribution power and loyalty program access while eliminating the management fee structure that absorbs operating profit. Gain operational control that allows faster decision-making and cost management. Reduce dependence on an operator whose priorities may not align with yours.
The franchise model has gained significant ground globally and is expanding in the Middle East, with several international brands now offering franchise options in the region. For owners with strong in-house or third-party management capability, franchising can deliver a materially better economic outcome than a traditional management agreement, particularly during periods when operator-driven revenue generation is constrained by external factors.
However, the transition from managed to franchised is neither simple nor cheap. Conversion fees, system migration costs, the need to recruit or engage an independent management company, and the risk of operational disruption during transition must all be weighed. For owners contemplating this path, the current downturn presents both an opportunity (reduced displacement during conversion) and a risk (executing a complex transition during operational stress). The decision should be evaluated on a five-to-ten-year horizon, not driven by the frustrations of the current moment.
The Independent Option
For some owners, the crisis may clarify that the branded model itself is not the right fit. Independent hotels in the luxury and upper-upscale segments have demonstrated resilient performance in several Middle East markets, particularly when they invest in distinctive design, strong F&B concepts, and direct booking capabilities. The elimination of brand fees — typically 8–12% of revenue when all charges are aggregated — can transform the bottom line.
The trade-off is distribution: independent hotels must build their own demand generation capability through OTA management, direct digital marketing, public relations, and strategic partnerships. For properties with strong local identity, exceptional product quality, or a unique location advantage, this is achievable. For properties that depend on brand recognition and loyalty-driven demand for a significant share of their bookings, going independent carries meaningful revenue risk.
The evaluation framework is the same regardless of direction: which commercial structure — managed, franchised, or independent — positions this specific asset to maximize revenue and profit in the market that will exist after this crisis, weighted by the owner’s operational capability and risk tolerance?
When to Act and When to Plan
We are not advocating that owners change brands or operators during an active crisis. Executing a brand transition while the market is depressed, the team is stressed, and the operating environment is unstable, introduces risk that typically outweighs the benefit.
What we are advocating is that owners use this period to conduct the analysis. Audit your brand costs. Map your operator’s distribution strength against the source markets that will lead recovery. Evaluate whether your property’s positioning matches the guest psychology that will define post-conflict demand. Understand your contractual options — termination triggers, notice periods, performance test mechanics.
If the analysis confirms that your current arrangement is well-suited for the post-conflict market, you gain confidence and clarity. If it reveals misalignment, you have the information and the time to plan a deliberate transition that executes from a position of strength rather than desperation.
Use this period to conduct the analysis. If it confirms your current arrangement, you gain confidence. If it reveals misalignment, you have time to plan a deliberate transition from strength rather than desperation.
Adnan Shamim
Managing Partner, Middle East & Africa
Robert Walters
Chief Investment Officer
QUESTIONS FOR YOUR NEXT OWNERS’ MEETING
1. Which source markets does your current brand have the strongest recognition and distribution in? Do those markets align with the segments that will lead your recovery?
2. What is the total cost of your brand relationship expressed as a percentage of current (not budgeted) revenue and GOP?
3. Has your operator demonstrated willingness to redirect sales and marketing resources toward recovering demand segments, or are they maintaining pre-crisis allocations?
4. Do you have the operational capability — in-house or via a third-party manager — to operate under a franchise model if the economics are favourable?
5. If you were selecting a brand and operator today, for the market you expect to exist in two to three years, would you choose the same partner you have now?
Phase 2 of The Owner’s Playbook series has addressed the strategic capital and positioning decisions that owners face during the current disruption. In Phase 3, we turn to the future of travel itself: how source markets will shift, what the post-conflict demand curve looks like based on historical precedent, and how security and wellness will permanently reshape the guest experience in Middle East hospitality.
