Embarking on a quest BY JOSH RUSSELL
It’s hard for a single individual to launch their own adventure in the accommodation sector. Fortunately they have a powerful ally in Quest Apartment Hotels
Cracking the serviced accommodation market takes a brave heart, not to mention considerable resources. However, having built up a considerable brand presence on the other side of the world, Quest Apartment Hotels is making it easier for franchisees to own and run their own aparthotels business here in the UK. Born from founder Paul Constantinou’s extensive experience in the hospitality and hotelmanagement space, Quest Apartment Hotels began life in Melbourne in 1998 – albeit in a rather different form. “The first Quest wasn’t a franchise: it was basically a partnership between him and a developer,” says Andrew Weisz, director of UK development at Quest. “So the developer was developing out a site with Paul as the operator.” The next few aparthotels were run on the same basis, until Constantinou began to realise if he began to bring on board other stakeholders there was a broader opportunity he could capitalise upon. “He saw there was a gap in the marketplace for extended stay corporate travel, a gap which our style of accommodation met,” says Weisz. “But after opening three or four businesses, Paul realised he couldn’t run that volume by himself so he started to franchise.” However, as Constantinou developed Quest’s franchise model, he adopted a radically different model to other brands working in the space. “It’s not like the typical hospitality franchise you have here in the UK where basically someone owns the building, they appoint managers or the brand as a
manager and pay a franchise fee,” Weisz says. “We sign up the developer on the basis that it will be a Quest, which gives the developer their spending – say £10m, £20m or £30m – for developing an asset and the franchisee manages it but with the support of the Quest brand sitting behind it.” A massive benefit of this system is that it doesn’t restrict entrance into the hospitality sector purely to those with an extensive property portfolio or many assets to leverage. “If you wanted to run your own aparthotel, no one’s going to invest that sort of capital unless you’ve got a very strong balance sheet,” says Weisz. “We give them a path where other paths to owning a business of that scale don’t really exist.” Perhaps one of the biggest endorsements of the model Constantinou had hit upon was that many of his initial franchisees were his own members of staff. “We had a lot of people at Quest corporate offices sign up for a deal; a lot of the first businesses were owned by ex-corporate employees,” Weisz says. “They worked in the business so they knew the benefits of owning the franchise.” However, once its pool of initial franchisees hit ten, Quest decided the foundations were in place for significant growth and it started to actively court prospective franchisees through the franchise press and by holding seminars. And this helped validate Constantinou’s vision of effectively democratising ownership of aparthotel businesses. “It’s proven to be really successful because you get people who are not just from a hospitality background: you get people
46 elitefranchise | DECEMBER 2017
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