What is the TMC and Consortia Fees based on for Sonesta Simply Suites?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Fee | Fee | Current Applicable Fees |
|---|---|---|
| (Subject to Change) | ||
| Travel Agency Commission Settlement Fee 4 | Up to $0.85 per transaction | |
| Groups, Meetings, and Events1, 4 | 3% on consumed master folio per group | |
| Direct Connect Fee 4 | $1.75 per transaction | |
| Brand.com 4 | $1.75 per transaction | |
| Internet Distribution System (IDS) Fee 4 | $4.00 per transaction | |
| Voice Reservation Service with Auto Attendant Fee 4 | $4.00 per call | |
| Global Distribution Systems (GDS) Fee 4 | $10.50 per transaction | |
| TMC and Consortia Fees 4 | 3.25% of gross revenue generated from bookings consumed through travel agencies (“Consumed Revenue”) | |
| Ignite Booking Program (Annual Fee) 4 | $500 per year (or $800 per year if integrated with Delphi Sales System), payable on a calendar year basis without proration for partial calendar years | |
| Ignite Booking Program (Monthly Fee) 4 | 7% on consumed master folio per group | |
| Business Pass Booking Program 4 | Not currently charged, but anticipated to be $350 per year, payable on a calendar year basis without proration for partial calendar years |
Source: Item 23 — RECEIPTS (FDD pages 80–246)
What This Means (2025 FDD)
According to Sonesta Simply Suites' 2025 Franchise Disclosure Document, the TMC (Travel Management Company) and Consortia Fees are based on a percentage of revenue generated from bookings through travel agencies. Specifically, the TMC and Consortia Fees are 3.25% of gross revenue generated from bookings consumed through travel agencies, which Sonesta Simply Suites refers to as "Consumed Revenue".
This means that a Sonesta Simply Suites franchisee will pay 3.25% of the revenue derived from guests who booked their stay through travel agencies. This fee covers the costs associated with maintaining relationships with these agencies and participating in consortia programs that drive bookings to the hotel. The fee is directly tied to the revenue generated through these channels, so the amount paid will fluctuate based on the effectiveness of these partnerships in driving business to the franchisee's location.
For a prospective franchisee, understanding this fee structure is crucial for financial planning. It's important to estimate the proportion of bookings expected to come through travel agencies and factor in this 3.25% fee when projecting revenue and expenses. Franchisees should also consider strategies to optimize their relationships with travel agencies to maximize revenue and ensure they are getting a return on this fee. It is also important to note that the fees are subject to change.