Hotel brands can do without franchise fees for now

The major hotel brands had over $11 billion in combined liquidity in March and April, much of that having come from new fundraising since the outbreak of the coronavirus. They could afford to put a moratorium on collecting franchise fees.

Hilton stated on April 16th that it expects their liquidity to last them 18-24 months, and it has no material debt due before June 2024.[1]

Marriott stated on April 15th that “As a result of the operating and financial strategies the Company has implemented, the Company strongly believes that it has sufficient liquidity and will continue to be able to successfully adapt as the [COVID-19] situation evolves.”[2]

Liquidity by brand

Company Cash and cash equivalents As of date
Marriott $3.7 billion 4/2/20[3]
Hilton $2.1 billion 3/6/20[4]
Hyatt $1.2 billion 3/31, plus $890 million 4/21 4/21/20[5]
Wyndham $735 million 3/17/20[6]
IHG $2.01 billion 4/27/20[7]
Choice $489 million 4/8, plus $250 million 4/16 “cash and available borrowing capacity” 4/16/20[8]
Total $11.374 billion
[1] Hilton Worldwide Form 8-K, 4/16/20.
[2] Marriott Prospectus Supplement, Page S-4, 4/15/20.
[3] Marriott Form 8-K, 4/2/20.
[4] Hilton Form 8-K, 3/5/20.
[5] $1.2 billion on 3/31/20 plus $890 million in proceeds from bonds on 4/21/20. Hyatt Prospectus Supplement, Page S-4, 4/23/20.
 And Hyatt Form 8-K, 4/21/20.
[6] Form 8-K released 3/17/20, Wyndham Hotels.
[7] IHG Form 6-K, 4/27/20.
[8] $489m cash and borrowing capacity on 4/8/20, plus $250m additional borrowing capacity on 4/16/20.  Choice Hotels Business Update, 4/8/20. and Choice Hotels Form 8-K, 4/16/20.