How does Embassy Suites By Hilton define 'Mandatory Guest Fee'?

According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, a 'Mandatory Guest Fee' is defined as any separate fee charged to a guest in addition to the base room rate. This encompasses various charges, including resort fees, facility fees, destination fees, amenity fees, and urban destination fees, or any other similar fee. These fees are included when calculating the Gross Rooms Revenue, which is used to determine the monthly royalty fee.

However, the definition explicitly excludes certain charges from being classified as Mandatory Guest Fees. These exclusions include employee gratuities, state or local mandatory taxes, and other tax-like fees and assessments levied on a stay. These excluded fees are those that Embassy Suites By Hilton determines are passed through to a third party, such as tourism public improvement district fees, tourism or improvement assessments, and convention center fees.

For a prospective Embassy Suites By Hilton franchisee, understanding this definition is crucial because Mandatory Guest Fees are included in the calculation of Gross Rooms Revenue, which directly impacts the Monthly Royalty Fees owed to the franchisor. It is important to differentiate between fees that are included as Mandatory Guest Fees and those that are excluded, as this affects the overall revenue calculation and the associated royalty payments. Franchisees should also stay informed about any changes to these definitions or the types of fees included, as these are subject to change.