Hotel Chains’ Entry Mode in Bulgaria

Abstract

This exploratory research note focuses on the entry modes applied by foreign and domestic hotel chains in Bulgaria. Results reveal that foreign chains put an emphasis on non-equity entry modes (marketing consortium, management contract, franchise), while domestic chains prefer ownership (full or partial). Hotel chains perceive non-equity modes as most suitable for penetrating the Bulgarian hotel market, while local hotels consider equity and non-equity modes as equally suitable. Considering the very low market penetration of hotel chains in Bulgaria, the authors conclude that there is a vast ground for their expansion in the country and that this expansion should be based on non-equity modes. Research limitations and directions for future research are also discussed.

Keywords: hotel chain, entry mode, type of affiliation, franchise, management contract, Bulgaria