PERSPECTIVE
U . S . Hotels – Franchise-Related Fees * - By Chain-Scale
Change from 2021 to 2022
60
50
40
30
20
10 0
44.1 % 44.3 %
55.7 % 60.5 %
57.8 %
All Hotels |
Luxury |
Upper-Scale |
Upscale |
Upper- |
|
|
|
|
Midscale |
Change in Rooms Revenue
56.1 %
37.3 % increase direct-to-customer engagement and offset any occupancy shortfalls during economic downturns and offpeak periods .
Major hotel brands have been actively expanding their loyalty membership base through
Midscale
Economy
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
39.2 %
29.6 % 32.0 %
23.6 % 33.1 %
Change in Total FranchiseRelated Fees
U . S . Hotels – Distribution of 2022 Franchise-Related Fees *
Percent of Total Franchise-Related Fees *
100 90 80 70 60 50 40 30 20 10 0
All Hotels
20.5 %
21.7 %
8.2 %
49.6 %
Brand Managed
Hotels
26.3 %
13.5 %
16.2 %
44.0 %
19.0 %
23.9 %
6.1 %
51.0 %
Third-Party Managed Hotels
Luxury
24.2 %
9.1 % 14.9 %
51.8 %
Upper-Scale
26.3 %
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
16.9 % 7.7 %
49.1 %
Upscale
16.4 %
26.4 %
6.6 %
50.6 %
Upper-Midscale
17.6 %
26.5 %
8.3 %
47.7 %
Midscale
14.6 %
22.8 %
19.9 %
42.8 %
11.9 %
Economy
10.8 %
2.4 %
23.4 %
22.9 %
51.3 %
Royalty Fee Reservation Fee Marketing Assesment Guest Loyalty Program
traditional methods as well as through a proliferation of credit card programs and other strategic alliances . A closer look at the aggregate loyalty metrics of the five major U . S . hotel brands reveals that in 2022 , loyalty members redeemed a record number of points that were earned and saved during the pandemic . Furthermore , over the past 10 years , the growth in loyalty members has outpaced the growth in total room supply . The growth in the average number of loyalty members and the number of members per room since 2019 — up 35 % and 22 %, respectively — means that the major brands now have the largest database of potential guests in their history . This should continue to reduce customer acquisition costs and help provide “ occupancy insurance ” should the economy falter .
For the five major brands , the total value of loyalty point redemptions and “ other ” revenues increased 36 % to $ 982 million since 2019 . The increase in revenue associated with point redemption , along with a steady loyalty contribution to occupancy , could be reflective of the variable number of points needed to reserve a room coupled with the record high ADRs . Alternatively , it could indicate that points are being redeemed for more expensive properties and prime destinations , consistent with the higher guest loyalty program fee PAR at upper-price tier properties .
Robert Mandelbaum is research director for CBRE Hotels Research . Christine Bang is research manager for CBRE Hotels Research .
30 hotelsmag . com October 2023