Compliment for Steve Rushmore
Congratulations to Steve Rushmore on the 30th Anniversary of HVS International, the global hospitality consulting organization, with 400 plus employees in 30 offices on five continents. What a remarkable accomplishment!
Of all the great studies and reports that HVS produces (many of them without cost), none strikes me with more relevance than the HVS U.S. Hotel Franchise Fee Guide. It illuminates the world of hotel franchising with irresistible numeric logic. Many hotel owners do not realize that the total cost of associating with a national brand over a ten-year period runs between 0.8% and 11.4% of room revenue. The HVS Guide reveals that this represents the second highest single expense (after payroll) for most hotel owners. Back in 1989, Steve wrote:
“When evaluating a potential hotel franchise, one of the most important economic considerations is the structure and amount of the franchise fee. Hotel franchise fees are the compensation paid to the franchisor for the use of the chain’s name, logo, identity, image, goodwill, systems, procedures, marketing, referral and reservation system. Franchise fees are normally…an initial fee… plus continuing fees paid periodically during the term of the franchise.”
The Guide enables hotel owners to evaluate the franchise fee structure and the total cost of initial and continuing fees before determining whether or not the price/value relationship warrants the cost of the franchise. To his everlasting credit, Steve Rushmore has delineated the real cost of hotel franchises.
In addition, I applaud Steve for his:
- clarion call for franchisor reform
- clear-eyed analysis of hotel management contracts
- early recognition that the standard reserves for replacement were insufficient at 3% of total revenue
- surprising report on “The Impact of Hurricane on Supply and Demand”
- dream to establish a Museum of Hotel Administration
- collection of 9000+ guest room keys
- installation of an original Servidor in his Mineola, N.Y. office
- support of The Charity Society, a Quaker institution in existence since 1794. It is “an institution for the use and benefit of the poor among the black people.” The history of The Charity Society is, in a sense, the history of the Religious Society of Friends on Long Island, and touches on issues that affect us all.