For an Embassy Suites By Hilton, what is included in the definition of 'Gross Rooms Revenue'?
Embassy_Suites_By_Hilton Franchise · 2025 FDDAnswer from 2025 FDD Document
- The Monthly Fees are calculated in accordance with the accounting methods of the thencurrent Uniform System of Accounts for the Lodging Industry, or as specified by us in the Manual. "Gross Rooms Revenue" means all revenues derived from the sale or rental of guest rooms (both transient and permanent) of the hotel, including revenue derived from the redemption of points or rewards under the loyalty programs in which the hotel participates, amounts attributable to breakfast (where the guest room rate includes breakfast), Mandatory Guest Fees, late cancellation fees, and guaranteed no-show revenue and credit transactions, whether or not collected, at the actual rates charged, less allowances for any guest room rebates and overcharges, and will not include taxes collected directly from patrons or guests. Group booking rebates, if any, paid by you or on your behalf to third-party groups for group stays must be included, and not deducted from, the calculation of Gross Rooms Revenue.
"Mandatory Guest Fee" means any separate fee that a patron or guest is charged for in addition to the base room rate for a guest room, including but not limited to resort fees, facility fees, destination fees, amenity fees, urban destination fees, or any other similar fee. Mandatory Guest Fees do not include employee gratuities, state or local mandatory taxes, and other tax-like fees and assessments that are levied on a stay, as determined by us, that are passed through to a third party (such as tourism public improvement district fees, tourism or improvement assessments, and convention center fees).
Source: Item 6 — OTHER FEES (FDD pages 27–41)
What This Means (2025 FDD)
According to Embassy Suites By Hilton's 2025 Franchise Disclosure Document, 'Gross Rooms Revenue' is defined as all revenues from the sale or rental of guest rooms, including both transient and permanent rentals. This encompasses revenue from loyalty program redemptions, amounts tied to breakfast if included in the room rate, mandatory guest fees, late cancellation fees, guaranteed no-show revenue, and credit transactions. These revenues are calculated at the actual rates charged, before allowances for guest room rebates and overcharges, but do not include taxes collected directly from patrons or guests. Additionally, group booking rebates paid to third-party groups for stays must be included in the calculation and not deducted.
Mandatory Guest Fees are defined as any separate fee charged to a guest in addition to the base room rate, including resort fees, facility fees, destination fees, amenity fees, and urban destination fees. However, Mandatory Guest Fees do not include employee gratuities, state or local mandatory taxes, and other tax-like fees and assessments that are levied on a stay and 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 several fees, such as the Monthly Royalty Fee and Monthly Program Fee, are calculated as a percentage of Gross Rooms Revenue. Therefore, accurately tracking and reporting all components of Gross Rooms Revenue is essential for compliance and financial planning. Franchisees should pay close attention to what is included and excluded to ensure accurate calculation of fees owed to Embassy Suites By Hilton.