HVS Publishes the 2023 U.S. Hotel Franchise Fee Guide: A Comparative Analysis of Hotel Brands

HVS announced the release of the 2023 U.S. Hotel Franchise Fee Guide, a survey that provides a comparative review of various hotel brands based on their applicable fees. This guide enables hotel investors and owners to easily compare the total cost of a brand affiliation against the total cost of such a commitment.

“Hotel franchise fees are the compensation paid to the franchises for the use of the chain’s name, logo, identity, image, goodwill, procedures and controls, marketing, and referral and reservation systems,” explains Rod Clough, President of HVS Americas. “An affiliation with a franchise creates certain benefits and costs for both the owner and the chain. Provided with the information on the relative costs of various franchise fee offerings, an owner can determine the overall cost of an affiliation, and directly compare the estimated costs of different franchises, which can vary dramatically between brands.”

The study is authored by industry experts and is based on extensive research and analysis of the hotel franchising industry. A total of 91 hotel brands, including 20 economy, 30 midscale, 19 upper-midscale, 21 upscale, and 18 first-class franchisors, participated in the 2023 analysis. The findings highlight the importance of partnering with the right franchise company. It is an essential resource for anyone interested in investing in the hotel industry or looking to expand their existing portfolio.

“The goal of our guide is to provide a comprehensive resource that will help investors make informed decisions and maximize their returns,” says Neil Flavin, Chief Operations Officer of the Asset Management & Advisory division of HVS, who oversaw the study with Assistant Vice President Robert Fitzpatrick. Flavin continues, “The selection of an appropriate franchise affiliation affects a property’s ability to compete in the local market, generate profits, achieve a certain image or market orientation, and benefit from referral business. Hotels are complicated investments. Selecting an appropriate franchise affiliation for a property entails exhaustive research.”

HVS has extensive experience with assisting clients in selecting the appropriate franchise for their proposed or existing hotels. Our services also include assisting with or managing the negotiations in coordination with experienced attorneys and other industry professionals.

For more information about the study or to purchase a copy, please visit our website at hvs.com/indepth or contact Robert Fitzpatrick directly.