The hotel franchise agreement created the economic model that allowed the modern hotel industry to scale. |
The avid hotel Cincinnati N- West Chester and the TownePlace Suites by Marriott in Georgetown, Ky., are owned and operated by Rainmaker Hospitality. |
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way to access major brand platforms. HVS found that these brands, such as Ascend Hotel Collection by Choice Hotels or Curio Collection by Hilton, generally charge lower franchise fees than hard brands within the same parent company, with spreads ranging from 0.4 % to 2.0 %.
One of the most highly tracked fees is loyalty costs— and they are rising, according to HVS, primarily because membership is rising. Consider Marriott Bonvoy, which reached 295 million members as of Q2 2026. As HVS points out, higher loyalty-program contribution rates mean more room revenue is subject to loyalty assessments. Hilton had the highest average loyalty participation rate among
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participating parent companies, at roughly 67 %, according to the survey.
More recently, lodging companies are giving franchisees more breathing room when it comes to loyalty fees. Both Marriott and Hilton announced cuts in their loyalty program fees to succor franchisees facing operational cost bloat; Marriott noted a 5 % reduction on its Q2 earnings
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call, while Hilton heralded a reduction of about 30 basis points since January.
FAIR AND BALANCED Competing notions of fairness and equitability of the franchise agreement are, naturally, mixed among hotel owners and franchisors. One thing is clear: ever since Kemmons Wilson opened his first Holiday Inn, through the years, the franchise
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Prakash Maggan, CFO, Rainmaker Hospitality |
September 2026 hotelsmag. com 7 |