Hotel Companies Offering Help To Franchisees
Though they’re not giving up on standards entirely, the major brands are becoming a little more malleable with their expectations. And that’s not all the major hotel companies are doing to try to keep costs down as rates have plummeted an average 18 percent this year, according to Smith Travel Research. 
By all accounts, owners are increasingly skittish about their ability to keep up with brand requirements while also paying what they perceive to be onerous fees during the worst downturn the hotel industry has faced since the early 1990s. It’s putting pressure on the major franchisors to do something, and they’re listening.
At the Real Share Hotel Investment Summit held last week in New York City, representatives from franchising companies such as Hilton, Starwood and Choice, as well as others, shared how they’re trying to alleviate franchisee pressure.
“We have lowered our fees 12.5 percent for existing owners and will do it again in 2010. However, you have to maintain brand scores,” said William Fortier, Senior Vice President – Development, Americas with Hilton Hotels Corporation, who also said the company is focusing on lowering costs all around. One example he gave was the company’s ability to negotiate a deal for franchisees to pay the same for USA Today as they were 10 years ago.
And non-essential upgrades – such as replacing functioning tube televisions – have been delayed.
Laura Benner, Vice President, Real Estate Portfolio Management with Starwood Hotels & Resorts Worldwide, said the company has critical and non-critical brand standards. “We have not delayed items like Heavenly Bed or the W Living Room. Other standards are not as critical to us, like the number of bottled waters in the room or the number of towels in the bathroom,” said Benner.
Meanwhile, Choice Hotels International is looking at ways it can drive more traffic to hotels through training initiatives and promotions. “As a pure franchisor our goal has always been to make decisions based on ROI,” said Shane Platt, Vice President of Franchise Sales – West, with Choice Hotels International.
The company has been offering what it calls streetwise training sessions, which are free workshops held in local markets that give hoteliers a better sense of how to operate their hotels and garner more business. Platt also added that they are still pushing hard on marketing and will spend nearly $300 million doing so this year alone. “It’s about getting and keeping customers,” Platt added.
