2007 U.S. Hotel Franchise Fee Guide: Designed to Assist the Hotel Owner

2007 U.S. Hotel Franchise Fee Guide

For Immediate Release

August 15, 2007 - HVS, the leading global hospitality consulting and hotel appraisal firm, recently published the 2007 U.S. Hotel Franchise Fee Guide – a survey of the fees charged by the major hotel franchisors in the economy, mid-rate, and first-class market segments. This guide enables hotel owners to easily compare the total cost of one hotel franchise with that of another.

“Hotel franchise fees are the compensation paid to the franchises for the use of the chain’s name, logo, identity, image, goodwill, procedures and controls, marketing, and referral and reservation systems,” states Stephen Rushmore, president and founder of HVS. “Being affiliated with a franchise creates certain benefits and costs for both the owner and the chain.” Armed with the information on the relative costs of various franchise fee offerings, an owner can determine the overall cost of an affiliation, and directly compare the estimated costs of different franchises, which can vary dramatically between brands.

“The purpose of the U.S. Hotel Franchise Fee Guide is to provide a comparative analysis of various hotel franchise companies, based on the fees they charge,” explains Rushmore, who co-authored the study with Jonathan Sebbane, Rodolfo Carlos, and Sumit Kapur. “The selection of an appropriate franchise affiliation affects a property’s ability to compete in the local market, generate profits, achieve a certain image or market orientation, and benefit from referral business. Because the success of a hotel is based primarily on the cash flows it generates, owners and lenders must weigh the benefits of a brand affiliation against the total cost of such a commitment.” 

A total of 93 franchise groups, including 31 economy, 28 mid-rate, and 34 first-class franchisors, participated in the analysis. Our survey also encompassed some of the recently launched brands, such as aloft and Element by Starwood, Cambria Suites by Choice Hotels, Hotel Indigo by InterContinental Hotels Group, and Hyatt Place by Hyatt. Furthermore, some brands, such as Holiday Inn Select and Holiday Inn SunSpree, are no longer offered and are therefore excluded from this edition. The 2007 U.S. Hotel Franchise Fee Guide also includes upscale hotel consortiums such as Relais & Chateaux, The Leading Hotels of the World, Preferred Hotels & Resorts, Preferred Boutique, Summit Hotels & Resorts, and Sterling Hotels. 

HVS is a full-service hospitality consultancy providing industry skill and knowledge worldwide. HVS offers market and financial feasibility studies, valuations, strategic analyses, development planning, and litigation support. Additionally, HVS specialists provide unique knowledge in the areas of executive search, investment banking, brokerage, asset management and corporate and single property strategic planning, management contracts, environmental sustainability, timeshare consulting, food and beverage operations and restaurant appraisal, interior design, gaming, technology strategies, organizational assessments, operational management, strategy development, convention facilities consulting, marketing communications, property tax appeals and investment consulting. Since 1980, HVS has provided hospitality services to more than 10,000 hotels throughout the world. Principals and associates of the firm have written textbooks and thousands of articles regarding all aspects of the hospitality industry, and literally “wrote the book” on how hotels should be valued. 

To obtain a complimentary copy of the Franchise Fee Guide, visit www.hvs.com/bookstore/ 

Leora Halpern Lanz
516-248-8828, ext. 278

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