September 10, 2015 Owner & Franchise Communications

Increased Marketing Fund Contribution for TownePlace Suites Effective January 1, 2016

These are very exciting times for TownePlace Suites. We currently have 263 hotels open, with a robust pipeline of 135+ hotels. In 2015, we introduced our new Gen 4.0 prototype, updated our design and décor package, and implemented the “Morning Break” breakfast evolution. We expect to have 300 hotels open by end of Q1, 2016, with a goal of 500 hotels open by 2020. Brand awareness continues to be a priority as we strive to make TownePlace Suites a nationally-recognized brand, make the brand more competitive in the mid-tier extended stay segment, and grow owner preference.

As communicated via the 2015 Franchise Disclosure Document Updates in March, the TownePlace Suites brand has an opportunity to dramatically increase our consumer marketing efforts by increasing our System Marketing Fund (SMF) contribution by 0.5% – from 1.5% to 2.0% of room sales – effective January 1, 2016. The incremental increase will be directly spent on advertising, partnerships, PR and social media. The TownePlace Suites Franchise Advisory Council (FAC) has approved and fully supports the decision to increase the SMF contribution.

Adding incremental dollars to consumer marketing through this 0.5% increase in the SMF will enable TownePlace Suites to:

Increase overall brand awareness, a key driver of preference.
Strengthen TownePlace Suites’ competitive position against Home2, Candlewood and other mid-tier extended stay brands. Most of our competitors have higher distribution, enjoy more robust consumer marketing spend (driven by higher marketing fund contributions vs. that of TownePlace Suites), and are active in broad media platforms.
Respond to mounting owner/franchisee requests to strengthen marketing as the brand seeks to gain RevPAR and distribution share vs. key competitors.
Participate in portfolio programs such as “Book Direct Campaigns” that drive customers to low-cost booking channels including TownePlaceSuites.com and Marriott.com.

Increasing the SMF allocation to marketing programs will, in 2016, increase marketing programs spend by 83% and nearly double the brand’s media spend. Additionally, this increase will significantly improve TownePlace Suites’ share of voice and communications awareness against major competitors.

In order to maximize impact, the TownePlace Suites Brand/Marketing team will determine the optimal marketing mix for a given year based on relevant market and consumer trends. The team will continue to actively engage the FAC and SMF Committee in determining how the marketing funds are allocated and spent, ensuring that the owner/franchisee perspective is represented and marketing ROI is maximized.

We thank you for your support and look forward to increasing TownePlace Suites’ brand awareness in 2016 and beyond.