You’ve booked a stay at a hotel, finally arrived at your destination and proceed to check into your room. You immediately notice that the room appears recently updated and remarkably similar in quality, layout and décor to the room at the hotel of the same brand you stayed at a month ago in a different city. You think to yourself, how does the hotel brand ensure consistency across its various locations? Do all rooms receive frequent renovations or did the front desk associate just give me the nicest and newest room available? The answer to this question is far from simple, and lies within what are often called “brand standards” (also known as “system standards”), a supposedly uniform set of guidelines with which hotel brands require hotel owners to comply in connection with the build-out, operation, renovation and upkeep of hotels of a particular brand.

This article explores the tensions that arise between owners, who are usually responsible for solely bearing renovation expenses and thus prefer to upgrade their hotels based on actual hotel conditions and financial considerations, and brands, eager for renovations to occur frequently to implement the brand’s latest initiative, often regardless of hotel-specific needs. Moreover, since hotel brands earn fees based on top line revenues, costly upgrades paid for by owners benefit the brands’ bottom line. But, for owners, the projected return on investment often does not justify renovation costs, especially if the hotel is already performing well. The article focuses on physical brand standards (i.e., the renovations and updates brands periodically direct owners to make) and the rights of brands to demand such renovations and of owners to push back on the renovation demands without running afoul of their contractual obligations to the brands.

Brand Standards, Explained

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