August 24, 2009: HVS, the leading global hospitality consulting and services firm, has just released the 2009 U.S. Hotel Franchise Fee Guide – a survey of the fees charged by 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,” explains Steve Rushmore, president and founder of HVS. “An affiliation with a franchise creates certain benefits and costs for both the owner and the chain.” Provided 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 our guide is to provide a comparative analysis of various hotel brands, based on the fees they charge,” explains Rushmore, who co-authored the study with Teresa Lam and Kelly Fitzpatrick. “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,” continued Rushmore.
A total of 96 franchise groups, including 25 economy, 29 mid-rate, and 42 first-class franchisors, participated in the 2009 analysis. This year’s survey also encompassed some of the recently launched brands, such as Home2 Suites by Hilton, NYLO, and XP by NYLO. The 2009 U.S. Hotel Franchise Fee Guide also includes upscale hotel consortiums such as The Leading Hotels of the World, Preferred Hotels & Resorts, Preferred Boutique, Summit Hotels & Resorts, and Sterling Hotels.
About HVS Global Hospitality Services
HVS is a global services and consulting organization focused on the hotel, restaurant, shared ownership, gaming, and leisure industries. Since the launching of the firm in 1980, our clients have relied on our specialized industry knowledge and expertise for advice and services geared to enhancing economic returns and asset value. Through a network of more than 25 offices staffed by approximately 400 seasoned industry professionals, HVS offers a wide scope of services that track the development and ownership process.
Since the year 2000, HVS has performed nearly 20,000 assignments throughout the world for virtually every major industry participant. Our principals literally “wrote the book” on hospitality consulting, authoring numerous authoritative texts and hundreds of articles. HVS is client driven, entrepreneurial, and dedicated to providing the best advice and services in a timely and cost-efficient manner.
To obtain a complimentary copy of the 2009 U.S. Hotel Franchise Fee Guide, visit http://www.hvs.com/bookstore/#2009ResFranFee
Leora Halpern Lanz
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