What are the specific obligations of a Crowne Plaza franchisee regarding the Loyalty Program Contribution, as detailed in Item 6, and how does this relate to the initial marketing contribution for the loyalty program?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
iday cannot make another discretionary increase again for 24 months after the expiration of the increase.
Note 3: Loyalty Programs: Your Hotel must participate in the loyalty program (the "Loyalty Program") for as long as SCH chooses to market a Loyalty Program. As of the date of this disclosure document, the Loyalty Program is marketed to consumers under the names "IHG One Rewards", and "IHG® Business Rewards". You must pay the Initial Marketing Contribution and Loyalty Program Contribution to SCH for the Loyalty Program. The Initial Marketing Contribution is payable only when your Hotel first enters Holiday's Brand System. SCH can change the Initial Marketing and Loyalty Program Contributions. The Loyalty Program is an incentive program that rewards members for frequent qualifying stays at all Crowne Plaza brand group hotels (and, as described in Holiday's separate disclosure documents, for Holiday Inn, Holiday Inn Express, Holiday Inn Resort, Hotel Indigo, Staybridge Suites, Candlewood Suites, EVEN®, avid®, voco®, Atwell Suites®, Vignette CollectionTM, , Garner, and InterContinental Hotels & Resorts brand group hotels as well as other hotel brands within the SCH hotel portfolio, including Kimpton® Hotels & Resorts).
The Loyalty Program includes alliances with airline and other partner loyalty programs. Through these alliances, IHG One Rewards members may choose to collect and convert their IHG One Rewards points into airline miles or other partner rewards, or choose to collect miles or other partner rewards automatically with each stay. SCH may add or delete airlines and partners within other industries from the IHG One Rewards Program.
SCH's Global Sales & Marketing department has established marketing relationships with airlines, rental car companies, banks and other types of companies, some of which include co-branding with IHG One Rewards. These alliances may produce revenue and income for SCH that do not result from any required purchases that you make.
The Loyalty Program Contribution is currently 4.55% of Qualifying Full Folio Revenue and 1.365% of Qualifying Room and Meeting Revenue. SCH can change these percentages in its sole judgment. Qualifying Full Folio Revenue includes: (a) Qualifying Room Rates (defined below), (b) charges for food and beverage, telephone, laundry and pay-per-view movies, including applicable taxes, when charged to the member's room regardless of whether a Qualifying Room Rate was paid, and (c) at the Hotel's discretion, any other items charged to the member's room not defined in the previous items (a) or (b).
Property management systems certified as compatible by the SCH Information Technology department provide Full Folio Revenue data to the Loyalty Program through an automated interface.
Qualifying Room Rates include, for example: (1) non-discounted rates; (2) standard corporate rates; (3) leisure rates; (4) government rates; (5) Corporate Gold rates and worldwide sales negotiated rates; (6) conference and meeting rates; and (7) individual Hotel contract rates. If discounts on rates (6) and (7) exceed 30% of the Hotel's published rates, the Hotel may exclude the awarding of IHG Rewards points for these discounted room rates. All negotiated group rates for business bookings are Qualifying rates. Guest rooms booked as part of a group, meeting or event block where the individual guest pays their own charges (room and incidentals) will qualify for points.
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, franchisees must participate in the loyalty program, currently known as "IHG One Rewards", for as long as SCH chooses to market such a program. This participation requires franchisees to pay both an Initial Marketing Contribution and a recurring Loyalty Program Contribution to SCH. The Initial Marketing Contribution is only required when the hotel first joins Crowne Plaza's Brand System. SCH has the ability to change both the Initial Marketing and Loyalty Program Contributions.
The Loyalty Program rewards members for frequent stays at Crowne Plaza hotels and other brands within the SCH hotel portfolio. It also includes alliances with airlines and other partner loyalty programs, allowing members to convert points into airline miles or other rewards. SCH's Global Sales & Marketing department establishes marketing relationships with various companies, some of which involve co-branding with IHG One Rewards, potentially generating revenue for SCH without requiring direct purchases from franchisees.
Item 23 further clarifies that the Loyalty Program Contribution, also referred to as the "IHG One Rewards Fee," is a monthly fee based on qualifying room rates and other eligible hotel charges for each night a guest earns IHG One Rewards points or airline miles. The prevailing rate is detailed in Item 5 of Attachment "A." IHG retains the right to modify the amounts or terms and conditions of both the Initial Loyalty Marketing Contribution and the Loyalty Program Contribution at its discretion.
In the fiscal year ended December 31, 2024, the Loyalty Program contributions were used as follows: 78% on award costs, 17% on member communication/promotions, 3% on administrative expenses, and 2% on services from corporate allocations such as Information Technology Data Warehouse, and the Service Center. The audited Statement of Review and Expenses will be prepared each year; however, it is not generally available for review by licensees, and Holiday does not provide periodic accounting reports.