Photo Credit: The "Peacock Alley" space at the Waldorf Astoria Las Vegas. Hilton
Hilton said it wants to help owners facing squeezed margins, such as by cutting some fees. "We're spending a huge amount of time on this," says CEO Chris Nassetta.
LinkedIn X Facebook Email Gift Why did Hilton raise royalty and management/franchise fees while cutting program fees, and what's the net effect on owner economics? How does RISE's 'gating system' work, and what guest-experience thresholds must hotels meet to qualify for the fee discounts? What is RISE II expected to change across the hotel P&L and Hilton's brand standards, and when will it take effect? Select a question above or ask something else
Hilton is cutting some of the fees its hotel owners pay, a concession CEO Chris Nassetta said would help profit margins for franchisees during another year of high costs.
Nassetta used Tuesday's earnings call to point out a global cut to loyalty program fees that took effect in January, and a newer program called RISE that discounts fees for hotels scoring well on guest experience.
"We're spending a huge amount of time on this," Nassetta said, describing repeated conversations with the ownership community.
The focus reflects a stretch for the franchisees who pay the property bills. Out of the pandemic, they rode a burst of rate growth that outran even elevated inflation. That reversed over the past two years, as U.S. room rate growth softened and turned negative last year while costs kept rising.
"In the U.S., you've had very low or, last year, negative top-line growth and expenses growing higher than that and stubbornly sort of h
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Tags: earnings , franchisees , franchising , hilton , hotel development , hotel owners , hotel pipeline , hotels , profits
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