To gain a better understanding of recent trends in franchise fees and guest loyalty program costs , CBRE analyzed the franchise-related payments made by 3,421 U . S . hotels from 2021 to 2022 . In 2022 , these hotels averaged 176 rooms and achieved a 67.5 percent occupancy with a $ 176.35 average daily rate ( ADR ).
For our Trends ® in the Hotel Industry survey CBRE captures four different franchise-related fees on a discrete basis .
• royalty fees
• marketing assessments
• reservation fees
• guest loyalty program fees For this analysis , the sum
of these four components comprises “ total franchiserelated fees .”
From 2021 to 2022 , royalty fees ( 45.1 % growth ) were the only other component of total franchise-related fees that increased at a greater pace than rooms revenue . Reservation fees ( 30.6 %) and marketing assessments ( 39.9 %) each grew at a pace slower than rooms revenue .
DIFFERENCES BY MANAGEMENT AND CHAIN-SCALE From 2021 to 2022 , we noticed a slight disparity in the change of franchise-related fees made by hotels that were operated by a brand , versus those operated by a third-party management company . When negotiating management opportunities , the brands have some flexibility in the fees charged since they
U . S . Hotels – Franchise-Related Fees *
Change from 2021 to 2022
60
50
40
30
20
10 0
44.1 %
Rooms Revenue
are receiving payments for both the franchise affiliation and management of the hotel . Therefore , it is not surprising that franchise-related fees ( 55.3 % growth ) increased slightly less than rooms revenue ( 56.4 %) at the brand-managed hotels . On the other hand , franchise-related fees ( 41.6 %) grew a little more than rooms revenue ( 38.8 %) during 2022 at the third-party managed properties .
Greater disparities between the growth of rooms revenue and franchise fees from 2021 to 2022 were observed by chainscale . The total franchiserelated fees grew greater than rooms revenue at luxury , upscale , upper-midscale and midscale hotels . Upper-upscale and economy properties saw their rooms revenue increase at a greater pace than total franchise-related fees during 2022 .
44.3 %
Total Franchise Related Fees *
45.1 %
Royaltee Fee
30.6 %
Reservation Fee
GUEST LOYALTY PROGRAM FEES Guest loyalty program fees have consistently increased at a greater pace than total franchised-related fees over the past 16 years . This implies that the loyalty program members are a growing source of paid revenue .
There appears to be a linear relationship between chainscale and guest loyalty program fee payments . In general , guest loyalty program fees make up a greater share of total franchiserelated fees at the higherpriced chain-scales . In 2022 , guest loyalty program fees accounted for over 25 % of total franchise-related fees at luxury and upper-upscale hotels . These hotels accommodate a high degree of corporate and convention travelers , a profile of guests that constitutes a significant share of hotel loyalty program membership . On the
39.9 %
Marketing Assesment
53.6 %
Guest Loyalty Program
Note : * Total Franchise Related Fees = Royalty Fee , Reservation Fee , Marketing Assessment , Guest Loyalty Program
CBRE Hotels Research , Trends ® in the Hotel Industry – Same store sample of properties that reported franchise fees 2021 and 2022 other end of the spectrum , guest loyalty program fees are just 2.4 % of total franchiserelated fees at economy hotels , implying that fewer loyalty program members stay at economy hotels .
As expected because of their higher room rates , guest loyalty program fees are also the greatest when measured on a dollar-per-available room ( PAR ) basis at luxury ($ 1,288 PAR ) and upper-upscale properties ($ 1,217 PAR ). At economy hotels , this charge averages just $ 40 PAR .
LOYALTY PROGRAM BENEFITS ( FOR HOTEL OWNERS ) As guest loyalty program fees rise , hotel owners want to know what they are receiving in return for the increases in cost . Guest loyalty programs help branded hotels lower their customer acquisition costs ,
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