What is included in the definition of 'gross room sales' for a Delta Hotels By Marriott franchise?
Delta_Hotels_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
General:
- 1 "Gross room sales" means all revenues and receipts of every kind that accrue from the rental of guestrooms (with no reduction for charge backs, credit card service charges, or uncollectible amounts).
Gross room sales includes: (i) no-show revenue, early departure fees, late check-out fees, fees for changes to reservations, and other revenues allocable to rooms revenue under the Uniform System of Accounting for the Lodging Industry, Eleventh Revised Edition, 2014, as published by the Hospitality Financial and Technology Professionals, or any later edition, revision, or replacement that we designate (the "Uniform System"); (ii) resort fees, destination fees, and mandatory surcharges for facilities (although inclusion of such fees or surcharges does not constitute approval by us of such fees and surcharges, which may be limited or prohibited); (iii) fees for changes to reservations and attrition or cancellation fees collected from unfulfilled reservations for guestrooms; (iv) the amount of all lost sales due to the non-availability of guestrooms in connection with a casualty event, whether or not you receive business interruption insurance proceeds; and (v) any awards, judgments, or settlements representing payment for loss of room sales.
Gross room sales excludes sales tax, value added tax, or similar taxes on such revenues and receipts.
You must account for gross room sales on an accrual basis.
Source: Item 1 — Fees for Other Services (FDD pages 39–71)
What This Means (2025 FDD)
According to Delta Hotels By Marriott's 2025 Franchise Disclosure Document, 'gross room sales' encompasses all revenues and receipts derived from guestroom rentals, without any deductions for chargebacks, credit card service charges, or uncollectible amounts. This broad definition ensures that the franchise fee calculation is based on the total revenue generated from room rentals before accounting for various deductions.\n\nSpecifically, gross room sales include several revenue streams such as no-show revenue, early departure fees, late check-out fees, and fees for reservation changes. It also incorporates revenues allocated to rooms under the Uniform System of Accounting for the Lodging Industry. Additionally, resort fees, destination fees, and mandatory surcharges for facilities are included in gross room sales, although their inclusion does not imply approval from Delta Hotels By Marriott, as these fees may be limited or prohibited. Furthermore, the definition extends to attrition or cancellation fees from unfulfilled guestroom reservations, lost sales due to guestroom unavailability from casualty events (regardless of business interruption insurance proceeds), and any awards, judgments, or settlements received for loss of room sales.\n\nHowever, gross room sales exclude sales tax, value-added tax, or similar taxes on revenues and receipts. Franchisees must account for gross room sales on an accrual basis, meaning revenue is recognized when earned, regardless of when payment is received. This comprehensive definition of gross room sales is crucial for accurately calculating the fees owed to Delta Hotels By Marriott and ensuring compliance with the franchise agreement.