The 136-room Cambria Hotel Downtown Asheville, N. C., opened in 2018. |
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agreement has held up, even if its language is undeniably onesided.“ A franchise agreement is written in favor of the franchisor, not the franchisee,” said Neil Flavin, COO of HVS Asset Management.“ Is that always the most equitable way to have a business relationship? Maybe not, but it does work.” Consider the iron-clad nature of a franchise agreement: There is little room to exit one without absorbing very high liquidated damages.
Flavin does see some fissures, particularly in newer and younger prospective hotel owners who are much more inquisitive, circumspect and suspect.“ Many thirdgeneration
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family owners want to go in a different direction [ than their parents ],” Flavin said, eschewing hard brands and either looking at the prospects of running an independent hotel or affiliating with a collection, and doing so by placing heavy reliance on technology, which their parents and grandparents were less inclined to do.
Sarah Kopit tackled some of this in a wide-ranging piece she penned on the state of the American hotel owner for Skift, where she is editor-in-chief. Her story underscored the quasi-antithetical relationship between hotel owner and brand. As lodging company stock prices skyrocketed, hotel
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owners contemporaneously struggled. She writes:“ In the current economy, the small, midscale hotel owner faces declining occupancy, all while costs are rising. Their takehome profit drops, but they still have to fork over 5 % or 6 % of topline revenue to the brand.”
Asked by HOTELS what her biggest takeaway was from her reporting, she keyed in on what she believes to be an incongruous relationship between franchisor and franchisee.“ The deepest cut was watching the franchise relationship reveal itself as structurally lopsided by design,” she said.“ It’ s worked almost too well. The hotel
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brands have never made more money. And the owners aren’ t feeling any of that.”
Part of the reason it’ s worked so well is because hotel brands have and continue to cycle out of the hotel-ownership game, concentrating instead on the fee-focused, asset-light model, which shifts real estate and operational risk elsewhere.
Kopit comes well short of villainizing the brands.“ Public companies have a fiduciary duty to their shareholders to make money. And that’ s exactly what they are doing,” she said.
OWNER OPINION It doesn’ t stop owners from the occasional bellyache.
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8 hotelsmag. com September 2026 |