Hotel and Lodging Industry: The Asset-Light Model and the Biggest Challenges

HF 100 | Introduction to Hospitality | Fall 2022
Arne Sorenson/Chris Nasetta Interview
Watching the documentary, what did you learn about the following in the lodging industry?
1 Asset light model for the hotel industry?

Based on administration and franchise agreements, the asset-light strategy lowers capital complexity and associated investment risk while enabling brands to proliferate (essential for online visibility) without incurring astronomical start-up losses (Nassetta, 2014).

2 What are the Biggest Challenges in the lodging industry?

An asset-light strategy is excellent in theory, but in reality, ownership structures are constantly changing. Take binding sites, for instance, where switching from contractual agreements to leases may maximize tenure and profits. In addition, the absorption of some operational risk or a promise of commitment, whether through leasing or funding in the guise of minimal assurances or essential capital, may succeed with owners at a period of rising brand uniformity and in competi...