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HVS International releases 2001 guide for hotel/motel fees.

Stephen Rushmore, president and founder of HVS International, the hospitality consulting and hotel appraisal firm, has recently published the 2001 Franchise Fees Analysis Guide -- a survey of the fees charged by major hotel franchisors in the economy, mid-rate, and first- class market segments. This guide enables hotel owners to compare the total cost of one hotel franchise with another.

"The purpose of the hotel franchise fees guide is to provide a comparative analysis of various hotel franchise companies, based on the fees they charge," said Rushmore. "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. Because the success of a hotel is primarily based on the cash flow it generates, owners and lenders must weigh the benefits and services of a national affiliation against the total cost of such a commitment."

A total of 83 franchise groups, including 29 economy, 31 mid-rate, and 23 first-class, participated in the analysis. The trend toward continued franchise expansion and segmentation was exhibited by an 11.4% increase in the number of study participants from 1998 to 2000.

The Best Western organization led this year's analysis, with only 2.1% of its projected ten-year revenue going toward expenses related to franchise fees. Other organizations achieving low percentages included Master Host Inns at 4.4%, Guesthouse Inns at 5.3%, and Key West Inns at 5.4%. Study results showed that room revenues ranged from 5.3% to 10.4% in the economy category, 2.1% to 10.5% in the mid-rate category, and 6.8% to 11.3% in the first-class category. Guesthouse Inns, Best Western, and Omni were the respective category leaders in low percentage, at 5.3%, 2.1 %, and 6.8%, respectively. The overall range was a low of 2.1% to a high of 11.3%, with a median of 8.3%.
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Publication:Real Estate Weekly
Article Type:Brief Article
Geographic Code:1USA
Date:Apr 18, 2001
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