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What is the average percentage of business a hotel owner can expect from brand-specific sources?

In most cases, just enough to get you to sign on the dotted line on the last page of the long, long franchise agreement; keep your hotel in their 'chain' for as long as possible, and keep you paying your fees and royalties every month.If you're doing any better than that, they'll want to flag another, newer hotel nearby under the same brand and collect the fees and royalties from them, if not the both of you. So I don't really count on 'rez contribution' to be much more than the 8.5 percent of my revenue - my total revenue, not just the business that brand-specific sources send you - that I'd generally pay in franchise fees and royalties, if even that. And I do track it. (As much as I like some Starwood products, I wouldn't pursue a Sheraton, Four Points or aloft because I don't like their 12% royalties: it can't be worth it. And I've negotiated those for other brands down as low as 5.5%.)If you get more than that out of the relationship, you're blessed. For as long as it lasts.As long as it stays in the teens or twenties (by my math, not that of the franchise organization that licenses the brand, which will generally have this annoying tendency to feel that GDS and online travel agency reservations are blessings that flow from the franchise organization, not something I could easily procure for myself without them.), I'm happy. If it gets below 12%, my eyes are going to start to rove about in anticipation of my five-year termination option and perhaps a new "date". (Hotel franchise agreements run for twenty years give or take, and most have a termination option every five years upon which either the hotel or the brand can walk away, with no fees or penalties, and no hard feelings; if one side or the other feels it's not working for them. I try to get that negotiated into any franchise agreement. I don't want to run a "Velcro Hotel" [Attack of the Velcro Hotels - The Business Journals ], a hotel that always seems to be changing to a new brand every five to ten years or so . . . but I am anal about having what works best for my hotel.)Red Lion and LaQuinta Inns are the only brands I know, right off the top of my head, who stick their necks out and claim a figure for average reservation contribution to their hotels. LaQuinta doesn't publish it, but their last brand rep I talked to claimed 42% in some places. Red Lion (a Western U. S. brand that I've come to like) really puts themselves on the line: their brochures and website advertise 48-52%.To get a figure for each brand that franchises that must be true (as in, they can be held legally accountable if it's not), you'd have to look it up in their Franchise Disclosure Document that the FTC requires them to give you if you're a prospective franchisee. Franchise organizations don't like sharing those around unless you're a serious prospect, with a specific project in mind. I have FDDs for Red Lion, LaQuinta and Cobblestone (we just signed a new Cobblestone Hotel and Suites that will open next year - and it all began when I listed Cobblestone as a brand to avoid if you're building a new hotel! [see What Does It Take To Start A Hotel?] - but that's another story for another time); and FDDs sitting around somewhere for Best Western and Super 8 Motels that aren't current. But I consider branded hotels only when I have a client or investor group that has a specific need for a brand in a hotel they're contemplating.Unfortunately, the variables kick in after this point - the bigger the brand, the more so.Some brands are just plain stronger, or weaker, than others. If I'm considering a town with no Holiday Inn or Holiday Inn Express, you know that's one of the strongest brands in the business, I know that if I don't put one there, someone else will at some point (and if I put anything besides a Holiday Inn Express there, I'll have competition when that happens), so guess who I'm going to call first?How much should I get from them? Enough to make their royalties and fees plus any other required expenditures, and their rules and regulations (some of which are downright silly -- including such genius ideas such as you must have a full-time, dedicated sales manager employed at that hotel whether you have other hotels in the same town or not, and the general manager's desk in his office must be of better quality than that of anyone else working at the hotel that has a desk [hey, c'mon, I'm quite okay with a desk I picked up secondhand at Habitat by Humanity ReStore, and I run the entire company...]), all worth putting up with — but only because it's Holiday Inn. Beyond that, your mileage may vary by town. It may vary by the number of other Holiday Inn locations in town that are competing for your central reservations feed. Or the number of other InterContinental Hotels-branded locations in town (we'll come back to the significance of that). It may vary based on the age or condition of your hotel (How are your TripAdvisor reviews? A more appropriate question would be, how is the cleanliness, condition, customer care, location and management at your hotel?, but TripAdvisor will answer it for you, with the answers provided by the people whose opinion would matter most — your past guests — to be read by the people who should matter most in the future — your future guests.)Way too much, if not most, of the money made in this business by large companies isn't made from running (or even supporting) hotels, it's from franchising. Choice Hotels owns the Comfort Inn, Comfort Suites, Clarion, Cambria Suites, Quality Inn, Sleep Inn, Econo Lodge, MainStay Suites, Rodeway Inn and Suburban Extended Stay brands - but they own no hotels. Wyndham owns Wyndham, Wingate, Microtel, Days Inn, Ramada, Super 8, Travelodge, Knights Inn, Baymont, Howard Johnsons, Trip, and Night. Hilton owns Hilton, Doubletree, Hampton Inn, Homewood Suites, and Home2 Suites; InterContinental owns Holiday Inn, Crowne Plaza, Staybridge Suites, and Candlewood Suites; and Marriott owns any "by Marriott" brand (http://wwmd.quora.com/Beechmonts-market-tier-classification-system/comment/397412 ).The value of any hotel franchise (to an individual hotel) is decline, and will not get any better. More and more business is shifting to online travel agencies (Expedia, Travelocity, hotels.com | Cheap Hotels, Discounts, Hotel Deals and Offers, Booking.com: 444,169 hotels worldwide. Book your hotel now!, etc.) and even TripAdvisor itself. There aren't that many "good" ones - brands upon which a hotel can rely to generate enough business for the hotel to make its fees, royalties, rules, regulations, grief and aggravation worthwhile - left.Holiday Inn is a "good" hotel franchise, although they tend to let a lot of their locations go to seed between remodeling binges every ten years or so. (This affects the rates at all their locations, including my brand new one in pristine condition if I build one. Holiday Inn rooms rent for only 95% of the average room rates for Class A, mid-market hotels.)So is Hampton Inn, although they drives me nuts with that "100% Satisfaction Guarantee" (Michael Forrest Jones's answer to Business Travel: How far should hotels go to please and appease dissatisfied or unhappy guests? ). Hampton Inn’s rooms tend to rate above the average for Class A, mid-market hotels — about 12% higher. But many of their locations lose the revenue on about five percent of the total rooms they rent because of that ‘guarantee’.Best Western has for a long time been my own favorite, although you can't always get it. (Usually, when you can't, it's because your proposed location is in the area of protection had by some outdated Best Western-member roach hotel that should have been kicked out of the system ten years ago, but that is allowed to continue renewing its membership so long as it keeps getting passing scores on its inspections, even though a property of its age and condition would have no hope whatsoever of being admitted to the Best Western system now). You’re on your own with marketing it: the one thing they don’t do well is branding and positioning. (Best Western works so much better as a ’soft brand’ , if people would use it as that — and at one time some thirty years ago, Best Western was trying to more pro-actively encourage that sort of use — but their members don’t do a very good job of branding their own hotels and using Best Western as a soft brand). And I don’t think some of the recent changes in how they go about it are necessarily an improvement. You can have your Best Western member property be a really well-planned, nicely-designed, well-run and well-marketed operation (they’ve actually ventured into some ’lifestyle’ brands, now, like ‘Vib’, and ‘GLo’), and get a rate comparable to competing ‘boutique’ properties in your area. Or, you can run an older property with a “Best Western of Hooterlick (or whatever town you hotel is located in)” flag where you barely pass their inspections and your marketing is static, and your rates will be 74.9% (or, half the time, even lower — that 74.9% figure is an average) of those attained by competing Class A properties.Super 8 Motels still has some life left in it if you have an economy property, or an older Class B property you want to reposition as one.Marriott franchises are among the best if you can get one, but you have to be among the Lord's Anointed and Chosen to get one and thenceforth, the rules and regulations are so "by the numbers" onerous that it's doubtful we'll even try. (When I started my company, I started with no desire at all to ever have Beechmont be a Marriott developer. I've reconsidered once, only because I had one inquiry from a potential client-owner who wanted to develop a big-box Marriott or a Courtyard. Never say never - if you can build one and want to sign us for twenty years to manage it for you, then for you, I suppose I could warm up to running a Marriott-branded property.)With Class B properties, the options aren't good. Microtel doesn't get as good a rate as it should, and Sleep Inn is owned by Choice, which tends to oversell its franchises in many markets. (That's why, in a town where a room at a Hampton Inn will go for $109 per night, chances are you can find just as good a room nearby at a Comfort Suites for $92, or a Comfort Inn for $76.) Baymont for a time looked like a good choice for conversion properties - existing hotels that you want to rebrand - but the Baymont brand getting more and more corrupt because they keep lowering their standards, accepting older, more unattractive properties than they should for conversion, and lowering the perceived value of the brand accordingly. (If the owner of some fleabag property wants to shine it up a bit, get a Baymont franchise, and kid himself he can rent his $60.00 per night rooms for $80.00 per night; even though Travelodge or Howard Johnson might be more appropriate for his property; they'll take his money, and let him have the Baymont franchise and rent his $60.00 rooms for $72.00 until he has to lower them; rather than have him walk away because he doesn't feel that the $60.00 per night Howard Johnson's or Travelodge franchise will improve things for him. It's a crappy thing for Wyndham to do to you if you've invested in a Baymont Inn nearby that you take care to keep up properly and that is actually a good value at $80.00 per night.)Outside those options, you're on your own. If all the 'good' brands are taken for the type of hotel you are building or buying in the area you want to build or buy, then you can't expect little to nothing in terms of reservation referrals from any franchise organization, and your game becomes one of paying as little as possible, and negotiating as favorable terms as possible, for the little-to-nothing you're going to get. You're like the class nerd on prom night: like a favorite client-owner of ours put it, you're looking for a "cheap date", and hoping it doesn't become a high-maintenance relationship.In the math I use to evaluate a franchise, online travel agency (OTA) reservations and global distribution system (GDS) reservations - both of which come through your brand's central reservations feed - don't count. You can get those without a brand with a Check-Inn (Innsoft Inc. ) front desk system that costs $600 give-or-take. My current hotel is a Choice-franchised Quality Inn that pays 8.5% of our revenue in fees and royalties to Choice, other required expenditures bring the total closer to 12%, and we get 12% of our customers from Choice's reservations feed - half of which comes from OTAs and GDS. In other words, we're paying twelve percent of our total revenue for six percent of our business. If it were my decision alone to make, I'd have only one word for Choice the next time the five-year termination option in the franchise agreement comes around: goodbye. But the owners don't want to fund the upgrades and renovations that would be required to convert it to another franchise, the mortgage loan agreement requires that a franchise be in place, and there's no guarantee we'd do better as a Baymont Inn or a Howard Johnson's.The only reason to bother with a hotel franchise at all nowadays is because it's a requirement from most any mortgage lender and/or some other third party that is involved in the development of your hotel insists you must have one. Few of them are a reliable indicator of a hotel's value anymore, and they're an even more unreliable indicator of its management's stability (independent and boutique hotels invariably fare better on TripAdvisor than franchised ones do, both in terms of scores and ratings, and rates). But the mortgage lenders haven't yet come up with a different standard that they can agree upon to evaluate the value and stability of a hotel. When they do come up with such evaluation standards (probably one heavily dependent upon TripAdvisor), we'll be close to the end of hotel franchising, and we'll be ready to market our own brands much more aggressively. A lot of those old, worn-out brands will be discontinued and go the way of Oldsmobile, Pontiac, Plymouth, Mercury, and AMC cars (Best of Seth: Clawing Your Way To The Bottom on WWMD: What Would Mike Do? The hotel blog ); and a lot of old, run-down properties that operate under them will be without a brand affiliation and will disappear without having to wait for a visit from the local fire marshal or health inspector.Beechmont's Rule One on consumer protection when it comes to franchising: success doesn't come in a 'kit' that you can buy. No matter who the franchise is, you're on your own with it; accept with gratitude any help they give you, but don't count on even Holiday Inn to hand it to you on a plate. If you want 'success' that comes in a 'kit', sign up as an Amway distributor.And if I'm too dependent upon my franchise, something's not as it should be with my local, in-house marketing. If the reservation contribution by the brand is too high, I'm going to wonder what my managers and salespeople are doing down there. (Likewise, if the percentage of local people, people who live in or around the same town as the hotel, who rent rooms there is too high - and I do track it - I'm going to wonder if someone in that hotel has the wrong kind of people as friends; especially if I'm not getting a decent rate and decent occupancy, or I'm hearing stories or seeing TripAdvisor reviews that tell of bad behavior by other guests, people hanging out in the lobby, noise or security problems [Michael Forrest Jones's answer to What do hotels do with unused guest rooms? | Michael Forrest Jones' answer to I am a hotel owner. I sometimes have guests sneaking in more guests who are not registered . . .].) We need to be developing our own business, not waiting for some franchise organization to do it for us, and not just opening the doors to all takers regardless of its effect upon the hotel.So, I want my hotel to have a brand that's good for as much reservation contribution as I can get.But I want that percentage to get lower over time. I'm just weird that way.

Have you visited Bermuda? What would you say are the “must see, must do” things about it?

Bermuda has been my home for 30+ years, so I speak with some authority on what experiences are available in Bermuda. I am also (for my sins) a “Certified Tourist Ambassador”.Some of my favourites?? That you won’t necessarily get from a brochure?I recommend deep sea fishing. In season, it is a unique experience. Most of the operators are outstanding. The remainder are simply very, very good. You haven’t really fished until you catch a yellow fin tuna or wahoo, and have steaks prepared by the chef at the hotel - from your own catch. Or, until you have a Blue Marlin on the line.I also recommend SCUBA in Bermuda. It’s not instantly spectacular like the remote Pacific Islands, but Bermuda has the best shallow water wreck diving in the world. In June, the water is 82f. Warmer by August. You can do the Marie Celeste, the Constellation, South West Breaker - all beginner grade dives. If you are more experienced and adventurous, you can do any of SEVERAL HUNDRED wrecks or reef dives, including the “krinkly bits”, where the reef is honeycombed with caves and caverns. Or the airplane dive. Get caught in a “fry ball” off Eastern Blue Cut. Winter? In February the water is 68–70f, with startling clarity. Take a 6mm one piece if you have one. The rental shops have good kit, but nothing beats your own rig and suit for comfort and credibility. No log book says “genuine” like a wet suit records experience with wear. Take a checkout dive, if you’re highly skilled you’ll be given pretty free rein. After two or three days of calm, sometimes in the winter clarity will be crystal for 100+feet. We have most of the Caribbean species, but some are marginal because of the northern climate. Dive on the northern most coral reef in the world. It can be AWESOME beyond belief.NO visit to Bermuda is complete without a fish sandwich. Ask a taxi driver where to find the best. (That should spread the business around!) I suggest going toasted raisin bread and tarter sauce, no confusion from other ingredients like tomato or lettuce! You’re there for the fish, right?In fact, Bermuda is NOT void of fast food. It is only void of American chains offering fast food. Go to a diner. The Spot, Bermy Cuisine, Island Cuisine, Specialty Inn. Again ask your taxi. Where’s a local diner? Where’s the best lunch wagon? Lunch wagons are known locally as roach coaches. Question of cleanliness? They will be spotless, don’t worry. They have routine inspections and meet stringent standards. We just have a sardonic and self deprecating sense of humour in Bermuda. Have a burger. If you’re adventurous, have a curried mussel pie. Or a fish sandwich. THAT is a Bermudian experience.NO visit to Bermuda is complete without a milkshake from a lunch wagon or diner. They are real 1950s-60s milkshakes, made from ice cream, full fat milk and syrup in a stainless container. Extra still in the container. Served just like it was in the US and Canada pre-McDonalds. I like vanilla. I understand chocolate and strawberry are to die for - I’m just not willing to take that step.NO visit to Bermuda is complete without a day lazing on a quiet and isolated beach. That’s an easy one. Just do it. I prefer deserted with nothing to crowded with services, but both are available.BUT even better, in the summer, get a taxi to a deserted beach after dark. He’ll stop at a store and find you some chilled bubbly. Ask him to come back in 2hrs and pre-pay. I don’t have to suggest what you might forget at the hotel (wink wink). In the winter? You might not impress anyone. In the summer? I stressed “deserted”, didn’t I? Go to Chaplain or Jobson’s, or any one of a dozen others. Your cabbie will know what is closest and best. OkOk… apart from the salacious hints, you might experience swimming in phosphorescence. That is one of life’s most amazing and beautiful experiences. And, don’t worry one bit about the nibble fish. They aren’t interested. Google “shark attack Bermuda” and you will see, there are no beach attacks in recorded history. I tease with this, because this is a playful suggestion, but also to reassure you that attacks are absolutely not a worry. The big fish stay outside the reef. Don’t take my word. Do that google search. For the ULTIMATE romantic experience? Try an hour or two quaffing chilled champagne from the bottle, laughing and rolling in the 82f surf with phosphorescent stars making the experience feel like you are swimming in the midst of the milky way, with a million stars above you and exploding around you. Lifetime top experience. I guarantee this one personally. Best advice? Take someone you like. A lot. Or go alone. It can be a transcendental experience.Go sailing. There will be charters available - they are few - but a real day under sail is a genuine therapy that will add years to your life. Sailing is a long day, more about the journey than the destination, full of conversation with someone intensely interested in Bermuda and it’s history, and sailing and water sports. Sailing is deeply embedded in the culture and history of Bermuda. You *might* get some snorkeling in on the northern or western reef, or be offered a refreshing beverage.Attend a Bermuda Fitted Dingy Race, if you are interested in sail racing and are lucky enough to be there for a race. (See RBYC and RHADC visits below for an “in”). The Bermuda Fitted Dinghy is the design which has been extended and expanded to almost all modern sailboats. The class dates from the late 18th century in one form or anther. The design of the boats has been carefully managed to maintain traditions in look and feel, but also to inspire innovation in design. Almost EVERY famous yacht designer has taken a crack at designing a winning Bermuda Fitted Dinghy. They are 14′ long, carry 500sq ft of sail at times, are displacement hulls (so far), and have a crew of six. The handicapping is done before the race and is based on interior volume. Competitors are lined up on both sides of a barge. Start is up wind, boats are started on opposing tacks in sequence of handicap by a starter with a clipboard and a stopwatch. This makes for a finish where the winner is the winner. Start is particularly entertaining, as is the finish. Right of way rules predate the modern starboard tack right of way. Boats are allowed to lighten by jettisoning crew. (I go too far on this activity… it is a favourite and particularly local). At times the class has multiple former Olympic sailors competing for honours. That is not an exaggeration. It is the most technical and contested one design class on the island. And, it is particularly unique.IF you are lucky enough to catch live theater in Bermuda, see a Bermuda Musical and Dramatic Society production. Many productions are top quality theater, better than much regional theater in the US and Canada. At least, if you have any interest in live theatre show up at the BMDS bar and ask the locals what is happening on the island.IF you are on island during the annual performance by the Gilbert & Sullivan Society (your hosts will know), you might be treated to a near Broadway quality show. Bermuda G&S Society was the first amateur group in the world to get rights to perform both “Phantom of the Opera” and “Les Miserables”. They also do many of the standards.IF you are an opera fan, the NY Met runs a video series on island, shown in the theater/lecture hall of the Bermuda Underwater Exploration Institute. This is little known, and mostly for locals. Not my thing - but I know it happens - and it is worthwhile for opera fans who don’t get to the live performances.IF you are a member of a yacht club, or a Royal club of one kind or another do a walk in visit to the Royal Bermuda Yacht Club, or the Royal Hamilton Amateur Dinghy Club. Explain to the barman that you are visiting and a member of “your club here”, and ask if he would allow guests to order at the bar. You will have volunteers to host. RBYC and RHADC are two friendly competitive clubs. RBYC more stiff, RHADC maybe (perhaps) a little more accommodating. These two clubs host the Newport-Bermuda and the Marion-Bermuda races on alternate years. This year, the RHADC dinghy “Elizabeth II” won the season. RHADC and Elizabeth RULE!! If you go to the dinghy races, remember to cheer for the right team!If you are a walker, the Bermuda Railway Trail merits your attention. The bits in Southampton along the seacoast are particularly isolated from development. Similarly but a little less so in St. George. You get just a hint of Bermuda before modern time. This is a winter or summer activity.That “modern time” reference makes me think of the Bermuda Maritime Museum. Bermuda is a little timeless in many ways. If you are so inclined take in this incredible facility. Recently resurrected Commissioner’s House has a spectacular mural, telling the entire history of the island in brilliant images. Art and history in a combination that will make you smile and remember Bermuda’s history forever. Intricate and detailed mural is a showpiece for the museum, and the other exhibits are first rate.IF you like jazz or live music make your way to Spinning Wheel or Places Place on Court Street. It’s a bit intimidating for those who stay south of 100th on Manhattan, but Bermudians are friendly, will laugh with you, and there is some GREAT music to be found. Again, ask your taxi. Explain that you want the real thing, not the tourist fare.Dance with the Gombeys. This only happens in surprising and surreptitious circumstances - or routinely on Boxing Day or New Years Day. Listen carefully to the rhythm. Watch the steps, and go for it!! It’s a theatrical dance - usually anonymous and done as a surprise at public events. Formerly done by slaves acting out the bad habits of abusive masters. Now, part of Bermuda culture. If you are a professional dancer, take careful note. This is a real and genuine folk art, passed on from generation to generation since the 1600s. The rhythm has been scored by one of Bermuda’s classical musicians, but the dance is improvised from a set of moves.IF you are a golfer, play Port Royal. No more need be said.Have a drink at Casey’s Bar on Queen Street. Meet locals. Ask them what to do. Stand a round to the crew, and you’ll have zillions of recommendations, and friends forever.There are a zillion more things to do in Bermuda. After 30+ years, I still find new places and new things to do most months. Apart from the occasional and rare incident, you are safe and welcome in Bermuda. Tourist? Not really. I think Bermuda is the last place on earth where you’re NOT a tourist. You a welcome guest.I recommend taking the time to mix with locals. Ask questions. Learn. Laugh. Participate. You will find shocking levels of sophistication or a laugh to a simple story about about a fish almost on a hook!The sea, the island, conversations, cold beer, black seal rum, friendships that last for generations. These are the things to look for! If you reach out, these are the things Bermudians will share with you.

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