ver the years , the fees hotel owners pay to franchise companies have typically grown at a pace greater than the rise in hotel rooms revenue . Most franchise-related fees are charged as a percent of rooms revenue ; therefore , by assessing the relative changes in rooms revenue and franchise fees we can make some assumptions .

In 2021 , acknowledging the

financial stress hotel owners faced during the pandemic , the franchise companies were sympathetic and provided some reprieve . While rooms revenue increased by 55.4 % in 2021 , total franchise-related fees rose by just 45.9 %. Equilibrium returned in 2022 . During the year , rooms revenue grew by 44.1 %, while total franchiserelated fees increased by 44.3 %. One component of the total

franchise-related fees paid by hotel owners to their franchise organizations are guest loyalty program fees . Per the 11th edition of the “ Uniform System of Accounts for the Lodging Industry ,” loyalty program fees “ includes any costs associated with programs designed to build guest loyalty to the property or brand .” In 2022 , the fees to cover the costs of guest loyalty programs increased by

53.8 %, 9.5 percentage points greater than the growth in rooms revenue during the year . In fact , guest loyalty program fees have consistently increased at a greater pace than rooms revenue since 2007 . Because of the growth in guest loyalty program membership and positive impacts on performance , owners don ’ t necessarily mind paying the extra cost .

28 hotelsmag . com October 2023