What is the value of loyalty?

On August 18, 2018, Marriott merged its loyalty programs. With all the news around the merger, we at UNITE HERE felt it was a good time to analyze the rewards program overall. Our latest report takes a look at the program and its recent changes. One key roadblock to this analysis is that Marriott’s rewards program lacks transparency for franchisees, making it difficult to weigh the costs of the program against its purported benefits. Considering the size of the program, franchisees should demand more specific data to determine how well the program is working for them.

As far as the merger of the SPG and Marriott Rewards programs, several factors could impact its value to franchisees, including:

  1. Marriott’s market concentration in many areas has increased. Customers may be more likely to choose Marriott-branded hotels by default. If true, that could reduce the differential benefit of the rewards programs.
  2. The loyalty program’s extension to all Marriott brands (except Bulgari) raises the question of whether customers can be loyal to (or even keep track of) 30 brands.
  3. The new schedule of redemption costs for room-nights came out in early August; it resulted in a net decrease in points costs. As a result, franchisees may be liable for subsidizing an increasing number of rewards stays.
  4. The added complexity of “peak” and “off-peak” pricing for each hotel could result in customer confusion.

Check out our latest guide for more info and further suggestions about things current and potential franchisees may want to do to protect their interests.

Please feel free to get in touch with thoughts or questions.

Did Marriott set up competition across the street?

Now that Marriott is the biggest hotel company in the world, franchisees and developers should make sure they have all the tools they need to defend their interests. Negotiating for a Restricted Area or Area of Protection in your franchise agreement is one way to protect your hotel.

If Marriott won’t guarantee you a protected territory while you’re developing or relicensing, Hilton, Hyatt, or IHG might.

Check out our latest guide for more info.

You should also check out our other guides about:
Mandatory renovations for Marriott franchisees
How Marriott can use your marketing fees

We would really like to hear about your experiences. If you have not yet taken our 10-minute franchisee survey, please fill it out.

Get in touch with us if you want more information or to discuss further.

Can you control your renovation costs?

One of the significant uncertainties hotel franchisees face is the cost of renovations mandated by the franchisor. All hotels must periodically face expenses associated with refreshes and renovations, but compared to franchisees, independent owners may be better able to control the costs, timing and frequency of such updates. Our new guide has information Marriott franchisees can use to examine whether their responsibilities are fair given the costs they may incur keeping up with brand standards.

Following the acquisition of Starwood, Marriott has 30 brands. It is unclear whether Marriott will determine that there are enough distinct market segments to justify investment in all 30 brands. The company has run commercials that combine four brands together.

As a franchisee, you may want to ask:

  • How deep is Marriott’s commitment to your brand?
  • Will your voice be included in Marriott’s decisions about its brand’s futures?
  • What will happen to you if Marriott abandons your brand?

Bringing a hotel into conformity with brand standards – standards that under some Marriott franchise arrangements may change at any time – could put a financial burden on you. Before you carry that burden any further, you deserve to know what you are in for.  Check out our guide.

If you have not seen it yet, you should also check out our guide about Marriott’s marketing fees.

Get in touch with us if you want more information or to discuss further.

Do you know how Marriott uses your Marketing Fund contributions?

Last month, UNITE HERE started this site as both an informational resource for Marriott franchisees and a way of learning about your concerns. Now, we have conducted an analysis of Marriott’s franchise disclosure documents and some Marriott franchise agreements. Based on what we found, we created a report – which you can view here – that we hope will help you navigate one important aspect of your relationship with Marriott: marketing fees.

As a Marriott franchisee, you may be surprised to learn that Marriott can use your marketing fund contributions for non-marketing purposes. In fact, Marriott has no duty to use fund money in a way that benefits you. Marriott can increase your marketing fees (up to a limit) or demand that you undertake or participate in additional marketing efforts not covered by the marketing fund. Our report has several additional things you should be aware of regarding your marketing fees.

Marketing fees are just one small piece of the franchisor-franchisee relationship. As we move forward, we want to provide information you can use. Last month we posted a survey about your experiences as a franchisee with Marriott. If you have not completed it yet, you can do so on our survey page.

If you want, we can look at your franchise agreement and provide you with additional information that you may find useful. You can get in touch with us using our contact form.

The more you tell us about your experiences and concerns, the more we can provide information on the topics most important to you!

Survey – How does your Marriott franchise agreement measure up?

Do you like your franchise arrangement? Do you hate it? What issues are you having? Fill out this 10-minute survey to help our research and legal teams focus on the issues most important to Marriott franchisees.

This space is designed to provide franchisees with information they can use to press Marriott for fair treatment. Our goal is to provide franchisees with the information they need to rebalance their relationships with Marriott in a way that gives franchisees a real voice and a fair deal in the areas that matter most to them. In order for that effort to be effective, please take ten minutes to fill out this survey and let us know your thoughts and experiences.

You can even contact us today. Get in touch with us by email at [email protected], by calling Levi Pine at 312-296-7649, or by filling out our web form.