Year-End Accrual Guidance
GSO Franchise Fee Year-End Accrual Guidance
The following information is intended for franchise management companies of Sheraton, Le Meridien, Luxury Collection, and select Four Points hotels.
Sales Fund ‘Group Production’ charges are billed one month in arrears due to the time needed to run final production data. This means that any Global Sales Organization (GSO) lead booked definite or actualized in December 2018 will not be billed until the following month, which will be outside of the current fiscal year. Since this billing will not occur until January 2019, franchise management companies may want to consider instructing their hotel(s) to accrue for for any Q4 2018 GSO bookings that the property hasn’t been charged for in a prior cycle.
Below is high-level guidance for hotels choosing to accrue for December 2018 GSO bookings:
- For GSO leads turning definite at your property in December: You may want to accrue an expense equal to 6% of the room revenue.
- For GSO leads previously billed and actualizing in December: The booked production is reconciled against the actual production and if the change is greater than or equal to 25% a billing true-up is processed. You may want to accrue an expense equal to 6% of the room revenue less prior billings if you had a significant pick-up in any previously billed GSO group booking.
Reservations Costs Year-End Accrual Guidance
The following information is intended for franchise management companies of SPG hotels.
With the transition to Owner and Franchise Billing (OFB) earlier this year, hotels are billed one month in arrears for Reservations costs. Ensure all Reservations charges are properly accrued in December, as activity that occurs from Dec. 1 through Dec. 31 will appear on the January reimbursable invoice. Review the Reservation Charges Overview document for information to help estimate the Reservations accrual for December.
If you have any questions please contact AmericasFranchiseFinance@marriott.com.
