November 4, 2021 Owner & Franchise Webinars, Management Company Webinars, FMC Weekly Webinars

November 4, 2021 | U.S. & Canada Franchise Management Company Webinar

Publication of new Owner & Franchise Communications on mi360 continues to be temporarily suspended. Important information is communicated to owners, franchisees and franchise management companies through other channels including the weekly U.S. & Canada Franchise Update email, Franchise Management Company webinar, and monthly webinar for Marriott Managed Owners in the U.S.

Thank you for joining us on Thursday, November 4 for the U.S. & Canada Franchise Management Company Webinar. If you were unable to join, a recording and PDF of the presentation are now available (EID and password required).

This webinar covered COVID-19 updates and resources, including:

Operations Update

CSB Extenior Signage Subsidy Program

OBJECTIVE: Lift the overall consumer perception and strengthen consideration for CY, FF, RI, SHS, and TPS brands by replacing outdated signage with an SMF-funded subsidy for U.S./CAN hotels.

TWO KEY UPDATES:

1. Previous Subsidy Requirement: Signage must be installed by Jan. 1, 2023, by approved vendor to qualify for subsidy, if eligible.

Updated Requirement: Owners must have a signed contract by Jan. 1, 2023, by approved vendor to qualify for subsidy, if eligible.

2. Previous Brand Standard Deadline for Exterior Signage Update: Jan. 1, 2023

Updated Requirement: Dec. 31, 2023, to allow for time needed in permitting and production in today’s environment.

IMPORTANT TO KNOW:

Changes allow owners greater financial flexibility while balancing opportunities to use each brand’s SMF for driving topline during recovery period.

Further extensions are unlikely as price guarantees expire with suppliers. Owners are encouraged to get estimates now.

Questions? ExteriorSignage@marriott.com

Residential Amenities

Premium + Select

As a result of the evaluation completed in October with live hotels, we found no critical issues with the bottles, pumps or brackets and are moving forward with the program rollout.

Review the Residential Amenities Implementation Schedule and take required action by brand-specific deadlines. Not following these deadlines will put the hotel at risk of running out of single-use products and/or not begin compliant with brand standard by July 2022 as required.

BRACKETS AND INSTALLATION

- - Bracket and template orders were due by Oct. 31 | Order and pay now if you have not already.
  - Upon receipt of the brackets, review the Implementation Guide and follow correct installation steps.
  - Proper installation and cure time of the brackets (24-36 hours) is critical to ensure a successful implementation. During the cure time the room should not be occupied.

RESIDENTIAL SIZED BOTTLES

- - Residential sized product is currently available for Aloft, Element, Westin, Sheraton, TownePlace Suites, SpringHill Suites, Residence Inn, Courtyard, Fairfield Inn and AC Hotels.
  - Hotels should order from the appropriate distributor and install in the brackets (following the cure time).
  - All other Premium and Select brands should stay posted to the Weekly Update to order product upon availability.

Visit MGS page to review program launch information, calculate how many brackets are needed and place an order with your brand’s respective bracket vendor.

Luxury

Luxury hotels are transitioning from individual, single-use guest bath amenities to brand-approved, free-standing, residential-sized bottle amenities. RBA bottles are larger than current bottle size, so properties may need larger shelves to accommodate the new bottles.

Join the upcoming Residential Bath Amenity Program Webinar on Nov. 18 at 3 p.m. ET to learn more about the program and timeline for product.

SHELVES AND INSTALLATION

- - Review the minimum requirements to determine if new shelving is required to support the new residential sized products.
  - If so, follow instructions to place an order as soon as possible to avoid deployment delays.
  - Ensure shelves are properly installed upon receipt of the large format bottles.

LARGE FORMAT BOTTLES

- - Large format bottles will become available by brand from December 2021 – Q2 2022.
  - Review the Luxury Resources for an Overview, Getting Started Guide and more.
  - Hotels should order from the appropriate distributor and implement the new bottles upon availability.
  - Stay posted to the Weekly Update to order product upon availability.

Visit MGS page to review program launch information.

Sales, Marketing, & Revenue Management Update

Travel Trends

Enthusiasm for travel is starting to rebound, leading to a greater travel readiness state-of-mind.
Interest in resuming domestic business travel is strong, but so is the desire to continue remote work.
Consumers are willing to spend more on travel that promotes wellbeing and on travel advisors to support peace-of-mind.

SMR Spotlight: Group Commission Compliance Program

Policy Reminder: All Marriott International branded hotels in the United States and Canada shall pay up to 7% in commissions on actualized room revenue for group business on agreements signed on or after March 31, 2018

- On average, we are seeing approximately 65 violations per month

Types of Violations:

- 10% commission
- 7% commission in addition to a rebate: where the contract states both are paid to the intermediary

Consequences of Non-compliance:

- For the first violation, GMs and FMC contacts will receive a letter.
- For a second violation of the brand standard, Marriott will charge the hotel $1,500, and Marriott may send an informal notice of breach of the franchise agreement. The informal notice will indicate that if another violation occurs within 12 months of the date of the informal notice, then Marriott may send a formal notice of default under the franchise agreement, which default may be cured if the hotel has no further violations in the 12 months after the date of the formal notice of default.
- For the third violation and each subsequent violation of the brand standard:
  - Marriott will charge the hotel the greater of $2,500 or 10% of the value of the meeting secured by the group sales agreement that violates the standard, not to exceed $7,500, and;
  - Marriott may send a formal notice of default under the franchise agreement; which default may be cured if the hotel has no further violations in the 12 months after the date of the formal notice of default.

Amounts due for any future violations of the brand standard will be charged via the OFB invoice.