The rise of white-label operators: why are so many hotel owners choosing third-party managers?

Major hotel brands are increasingly focusing on growth in the number of units, often through franchise agreements. This strategy leaves a gap in terms of day-to-day operational management, now filled by independent third-party operators, also known as white-label managers.

These players, still new to our market, are taking on a growing role between the asset owner and the brand, bringing operational expertise while allowing owners to retain the commercial strength of a major brand.

The advantages are clear:

• Optimization of administrative and general expenses,
• Strengthening of the direct sales force, with more control and accountability at the level of each establishment,
• Improvement of net operating income thanks to more precise, local management.

However, owners must also take certain constraints into account:

• The additional management fees that are added to those of the franchise,
• Sometimes often long contracts, limiting flexibility (a minimum of 10 years in many cases),
• “Unencumbered” assets attract more investors.

For Malagasy hoteliers and investors, the question is therefore strategic:
Should you prioritize freedom and independence, or capitalize on the expertise of a third-party manager to increase profitability?

At RADAMA SA, we closely follow this trend in order tosupport local hotel owners and investors in their choices, taking into account both immediate performance and the lasting value of their assets.