HVS U.S. Hotel Franchise Fee Guide 2020

Kasia M. RussellBomie  Kim
By Kasia M. Russell and Bomie Kim
15 January 2021

Introduction To U.S. Hotel Franchise Fee Guide

The HVS U.S. Hotel Franchise Fee Guide provides a comparative review of various hotel franchises based on their applicable franchise fees. The selection of an appropriate franchise affiliation affects a property's ability to compete in its local market, generate profits, and achieve a distinguished image and market orientation. Because the success of a hotel is based primarily on the cash flow generated, owners and lenders must weigh the benefits of a brand affiliation against the total cost of such a commitment.

Please note that the study results are not indicative of the impact an individual brand may have on a hotel's overall profitability because only the costs, and not the benefits of the franchise affiliations, have been analyzed. Furthermore, the study does not reflect, nor does it claim to address, operating results of any one brand or any particular brand affiliation upon any single hotel property. The 2020 U.S. Franchise Fee Guide is meant to illustrate a basic comparison among franchise fees charged by participants.

HVS has extensive experience with assisting clients in selecting the appropriate franchise for their proposed or existing hotels. This service also includes assisting with or managing the negotiations in coordination with experienced attorneys and other industry professionals.

Summary of Findings

  • The COVID-19 pandemic has tested the very core of the hospitality franchise community. Franchisors and franchisees have both been directly affected by the demise of travel,
    globally. Although select accommodations for payment deferrals may have been negotiated, there have been no sweeping permanent changes across brand families as of yet.
  • This report includes four more participating brands than the previous year's publication. We anticipate that participation will increase as mergers of hotel companies and the
    proliferation of new brands continue.
  • In the past few years, loyalty-fee percentage to rooms revenue has increased, largely attributed to guests' rising participation rates in hotel companies' frequent-traveler programs.
  • Consistent with last year's guide, collection brands' franchise cost structures remained generally below the average franchise fees of other brands within the same parent company.

Download the report at HVS

View source

Hospitality Net today Newsletter
Sign up to our free daily newsletter,
Hospitality Net today
sign up