Why Hilton Doesn't Franchise Luxury Hotels

The WSJ has posted a nice eight minute video about the hotel business as part of their "Economics of" series. One trends has been a decades long shift toward franchising properties to the owner / operators. However, Hilton, as well as other chains, own and operate their luxury hotels themselves. In this segment, their are just too many non-quantifiable dimensions of amenities on which a hotel can falter. It is too difficult to set metrics for a franchisee.