For guests, business owners, employees, and investors, the U.S. hotel and lodging industry is incredibly appealing. In part, that’s because we have a franchising system that has made our hotels, lodges, inns, and resorts some of the most dependable, available, and accommodating on the planet.
These characteristics, enabled by the franchise model, are the reason why guests can find a trusted hotel brand for every lifestyle, workstyle, and price point of their choosing almost anywhere.
For the people who make the stay experience possible, from the hotel check-in employee to the hotel owner, our industry provides lifelong careers and an abundance of opportunity. Today, franchised hotels support more than 2.8 million American jobs, and franchises account for nearly 60 percent of all U.S. hotels, according to the American Hotel & Lodging Association (AHLA).
In addition, franchised hotels in the United States today account for nearly $100 billion annually in economic impact and $35 billion in state and local tax revenue. Perhaps most notably, the number of franchised U.S. hotels has grown by an impressive 34 percent in just the past 10 years.
Hotel franchising, born right here in America over 80 years ago, has made all of this possible. Clearly, there’s a lot right with this business model.
Across industries throughout our country, the franchise model acts as a catalyst for—and symbol of—the American Dream, offering families and generations a chance to own a small business and prosper in the United States. In fact, according to the International Franchise Association, franchising supports nearly 8.7 million direct jobs and nearly $860 billion in economic output for the U.S. economy.
As chair and vice chair of the AHLA board of directors, we approach this topic from two very different perspectives—that of a brand executive at Hilton, which licenses its name to franchise owners, and that of an owner/operator at Vision Hospitality Group, which licenses major brands at many of its owned and operated properties. But we are in full agreement when it comes to the enduring power of this incredibly successful business model, which should be celebrated and preserved.
Today’s hotel franchising system is a win-win for both hotel owners and franchisors because when a franchise succeeds, everyone benefits. This is why we are concerned by efforts at all levels of government to further regulate the franchise business model. Broadly drafted legislation and regulations would create a one-size-fits-all approach to imposing new mandates and have myriad unintended consequences for our businesses and industry.
Of course, business relationships will always have healthy disagreements from time to time. This is true of owners, brands, and managers. And like any strong relationship, trust and open communication are essential to ensuring positive outcomes. Often, differing views among lodging professionals have led to technological innovation, cost and process efficiencies, and new opportunities to grow.
Our message to policymakers is “why would you want to interfere with a tried-and-true ‘engine of opportunity’ that propels the American dream and generates significant value for hotel owners, employees, communities, and guests?” Every time a new franchised hotel opens its doors, economic development is sure to follow.
The system is carefully structured in such a way that creates operating efficiencies, investment opportunities, and sustainable growth for our industry and beyond.
That’s why it’s so imperative that we continue to vigorously defend our current policies and practices that give:
- families and future generations the chance to own a small business and prosper in the United States;
- hotel consumers the consistent brand standards created by the franchise model that provide reliable markers for the quality, products, and safety they can expect, regardless of hotel location;
- hospitality professionals the incentive to seek and grow their careers in one of the most rewarding industries in the world;
- communities the economic stimulus that comes with providing guests and visitors with unforgettable experiences and memories with family and friends in safe, comfortable, and exciting places; and
- hotel brand owners the ability to expand the reach of their properties through sophisticated technology, loyalty, and distribution platforms that fuel their owners’ and operators’ commercial success.
Growth and job creation happen when our industry is allowed to operate under a predictable, logical, and fair regulatory system. That’s what we have today: an American-made model that has created jobs, opportunity, and a thriving industry that supports millions of families.
Ultimately, hospitality is all about people serving people, and this ethos begins at the top of our organizations and flows through to every property. It’s essential that we cultivate trusted brands that are dependable, accessible, and accommodating, alongside a business climate that supports entrepreneurs in their pursuit of growth and success. By fueling the spirit of franchising, we can keep our economic engine running smoothly, propelling innovation and opportunity into the future.
