Comfort Inn 2013 Annual Report Download - page 52

Download and view the complete annual report

Please find page 52 of the 2013 Comfort Inn annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

Table of Contents
A summary of the domestic hotels and available rooms at December 31, 2012 and 2011 by brand is as follows:











Comfort Inn 

1,399
109,330
(50)
(3.6)%
(3,859)
(3.5%)
Comfort Suites 

616
47,738
(19)
(3.1)%
(1,693)
(3.5)%
Sleep 

394
28,568
(7)
(1.8)%
(481)
(1.7)%
Quality 

1,047
91,502
105
10.0 %
6,576
7.2%
Clarion 

189
27,527
2
1.1 %
(86)
(0.3%)
Econo Lodge 

797
49,483
20
2.5 %
468
0.9%
Rodeway 

388
21,627
22
5.7 %
1,743
8.1%
MainStay

40
3,093
1
2.5 %
72
2.3%
Suburban

60
7,126
3
5.0 %
165
2.3%
Ascend Hotel Collection 

52
4,617
5
9.6 %
365
7.9%
Cambria Suites 

19
2,215
—
— %
6
0.3%
 

5,001
392,826
82
1.6 %
3,276
0.8 %
Domestic hotels open and operating increased by 82 hotels during the year ended December 31, 2012 compared to an increase of 8 domestic hotels open
and operating during the year ended December 31, 2011. Gross domestic franchise additions increased from 256 for the year ended December 31, 2011 to 308
for the same period in 2012. New construction hotels represented 27 of the gross domestic additions during year ended December 31, 2012 compared to 29
hotels in the same period of the prior year. Gross domestic additions for conversion hotels during the year ended December 31, 2012 increased by 54 from 227
hotels during the year ended December 31, 2011 to 281 hotels. The increase in the number of conversion hotel openings primarily reflects a forty percent
increase in executed franchise agreements driven primarily by a developer incentive established for the Company's Quality, Clarion and Econo Lodge brands
as well as the conversion of 46 hotels previously operated under the Jameson brand to the Company's Comfort (2 hotels), Quality Inn (42 hotels) and Econo
Lodge (2 hotels) brands in December 2012.
Net domestic franchise terminations declined by 22 units from 248 for the year ended December 31, 2011 to 226 for the year ended December 31, 2012.
The decline in net terminations is primarily due to a decline in the number of hotels removed for the non-payment of franchise fees as well as increased
retention efforts implemented by the Company to reduce the number of terminations as the overall industry supply growth continued to be lower than historical
levels. Despite this decline, the Company continued to execute its strategy to replace franchised hotels that do not meet our brand standards or are under-
performing in their market.
International royalties decreased $0.1 million from $25.2 million in the year ended December 31, 2011 to $25.1 million for the same period in 2012
primarily due to the negative impact of foreign currency fluctuations and a slight decline in the number of rooms in the international system. International
available rooms declined by 1,228 rooms to 103,151 as of December 31, 2012 from 104,379 as of December 31, 2011. The total number of international
hotels on-line decreased 17 from 1,177 at December 31, 2011 to 1,160 as of December 31, 2012.
Initial Franchise and Relicensing Fees
During 2012, the Company received 750 applications for new franchise agreements (not including relicensing of existing agreements) compared to 600
in 2011. These applications resulted in 473 new domestic franchise agreements executed during 2012 representing 36,105 rooms compared to 332 agreements
representing 28,685 rooms executed in the same period of 2011. An application received does not always result in an executed franchise agreement during the
year received or at all due to various factors, such as financing and agreement on all contractual terms. During 2012, 86 of the executed agreements were for
new construction hotel franchises, representing 6,414 rooms, compared to 55 contracts, representing 4,712 rooms for 2011. Conversion hotel franchise
executed contracts totaled 387 representing 29,691 rooms for the year ended December 31, 2012 compared to 277 agreements representing 23,973 rooms for
the year ended December 31, 2011. The increase in the number of conversion executed franchise agreements primarily reflects the impact of a developer
incentive established for the Company's Quality, Clarion and Econo Lodge brands as well as the conversion of 46 hotels previously operated under the
Jameson brand to the Company's Comfort (2 hotels), Quality Inn (42 hotels) and Econo Lodge (2 hotels) brands in December 2012. The increase in new
construction franchise agreements primarily reflects a gradual improvement of the lending environment for
52