2016 Franchise Disclosure Document Updates
U.S. Only | As we finalize our annual Franchise Disclosure Documents (FDDs), we want to highlight certain system changes that may impact your hotel(s). Our royalty fees remain constant, and the updates outlined below are designed to improve the robust services we provide franchisees. These changes are effective for all new development and relicensing deals beginning March 31, 2016.
- Business Transient (BT) Booking Cost
As previously communicated, beginning in January 2017, hotels that do not participate in Marriott’s U.S. Area Sales Organization, yet opt to be included in Marriott’s Area Sales BT pricing effort, will be charged $2.75 per stayed-and-paid contracted BT room night. This BT booking cost will be limited to 2,500 room nights (a maximum of $6,875) per hotel, per account annually. As part of this effort, and as an added value to hotels, we will provide hotel- and portfolio-level reporting with BT booking cost details.
- Mobile Key
Marriott is transforming the mobile-digital guest experience by developing a scalable, secure, and reliable Mobile Key solution. In addition to the one-time lock hardware purchase or retrofit, an $8-$10 per lock annual licensing fee for software and vendor support will apply for all brands upon implementation. Amidst a changing digital landscape, this and other “win the stay” efforts will strengthen Marriott’s Book Direct strategy and deliver personalized service to Rewards members.
- Relicensing Property Improvement Plan (PIP) Fee
For select service and extended stay brands, effective April 1, 2016, the PIP fee is reduced to $8,000 from $10,000 if you are transferring an existing select service or extended stay Marriott-branded hotel or converting one from Marriott-managed to franchised.
- Development Incentive Program Changes for Fairfield Inn / Fairfield Inn & Suites, SpringHill Suites and TownePlace Suites
For new-to-system deals approved between April 1, 2016 and March 31, 2017, the franchise fees for year 1 will be reduced to 3%.
- Relicensing Application Fee for SpringHill Suites and TownePlace Suites
Effective March 31, 2016, if you are submitting an application for an existing SpringHill Suites or TownePlace Suites, the application fee increases to the greater of $125,000 or $400/guest room or suite.For transactions that have not yet closed but for which we have received completed applications (including payment of the application fee), we will honor the previously agreed-upon relicensing application fee. For transactions for which we have previously received a request for an application but have not received the completed application, we will charge the 2015 application fee provided that we receive the completed application (including payment of the application fee) within sixty (60) days of our sending the 2016 FDD. For all other transactions, the fee will be the greater of $125,000 or $400/guest room or suite.
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Moxy Program Services Contribution
Effective in 2016, Moxy hotels will be subject to a Program Services Contribution equal to 3.75% of gross room sales. The program fee approach offers franchisees competitive rates and provides franchisees with certainty on reimbursable costs.
We remain committed to protecting your investments while continuing to improve each brand’s economic business model, and we thank you for your continued support.
