Choice charges each of its franchised hotels about 8.5% of their total revenue (regardless of source, even if they don’t refer the business to the hotels) in fees and royalties. In other words, if you operate a Choice-franchised hotel, 8.5% of the money you take in goes straight to them. For most hotels in their system, required purchases and other charges bring the total closer to 12%.
At a Quality Inn that we ran, 12% of our rented rooms are Choice reservations referrals — and half of those originated from online travel agencies.
Any hotel can, with a property management system that costs $1000, give or take, can access a reservation feed from OTAs and GDS (Global Distribution System) sources.
Bottom line: we were paying Choice just under 12% of our revenue, and getting in return only 6% of our business.
