What is the primary source of earnings for the Management and Franchising segment of Caption By Hyatt?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
Our reportable segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by the CODM to assess performance and make decisions regarding the allocation of resources. Our CODM is our President and Chief Executive Officer. We define our operating and reportable segments as follows:
- • Management and franchising—This segment derives its earnings primarily from the provision of management, franchising, and hotel services, or the licensing of our intellectual property to, (i) our property portfolio, (ii) our cobranded credit card programs, and (iii) other hospitality-related businesses, including the Unlimited Vacation Club following the UVC Transaction. This segment also includes revenues for reimbursed costs primarily related to payroll at managed properties where we are the employer, as well as costs associated with system-wide services and the loyalty program operated on behalf of owners of managed and franchised properties. The intersegment revenues relate to management fees earned from our owned and leased hotels and commission fees earned from certain ALG Vacations bookings, both of which are eliminated in consolidation.
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Caption By Hyatt's 2025 Franchise Disclosure Document, the Management and Franchising segment primarily earns revenue through the provision of management, franchising, and hotel services, as well as the licensing of intellectual property. These services and licensing agreements extend to Caption By Hyatt's property portfolio, co-branded credit card programs, and other hospitality-related businesses, including the Unlimited Vacation Club.
Specifically, the segment's gross fees are broken down into base management fees ($432), incentive management fees ($252), and franchise and other fees ($465). The total gross fees for the Management and Franchising segment amount to $1,149. Additionally, the segment generates $42 in other revenues and $3,352 in revenues for reimbursed costs.
In 2024, the total revenues for the Management and Franchising segment reached $4,474. This figure includes $1,191 in segment revenues, a contra revenue of ($69), and $3,352 in revenues for reimbursed costs. The intersegment revenues, which are eliminated in consolidation, amount to $49 and relate to management fees earned from owned and leased hotels and commission fees from ALG Vacations bookings. These figures demonstrate the diverse revenue streams within the Management and Franchising segment, highlighting the importance of management and franchise fees, as well as reimbursed costs, in its overall financial performance.