Comfort Inn 2014 Annual Report Download - page 45

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Table of Contents
A summary of the domestic hotels and available rooms at December 31, 2014 and 2013 by brand is as follows:











Comfort Inn

1,302
101,673
(62)
(4.8)%
(5,811)
(5.7)%
Comfort Suites 

589
45,451
(12)
(2.0)%
(819)
(1.8)%
Sleep 

382
27,623
(11)
(2.9)%
(812)
(2.9)%
Quality

1,223
101,143
61
5.0 %
3,311
3.3 %
Clarion 

190
27,501
(12)
(6.3)%
(2,452)
(8.9)%
Econo Lodge 

830
50,694
26
3.1 %
2,184
4.3 %
Rodeway

438
24,677
36
8.2 %
1,495
6.1 %
MainStay
43
3,331
2
4.7 %
237
7.1 %
Suburban
63
7,167
2
3.2 %
31
0.4 %
Ascend Hotel Collection 
102
9,206
7
6.9 %
189
2.1 %
Cambria
18
2,119
4
22.2 %
523
24.7 %


5,180
400,585
41
0.8 %
(1,924)
(0.5)%
Domestic hotels open and operating increased by 41 hotels during the year ended December 31, 2014 compared to an increase of 97 domestic hotels
open and operating during the year ended December 31, 2013. Gross domestic franchise additions decreased from 340 for the year ended December 31, 2013
to 302 for the same period in 2014. New construction hotels represented 35 of the gross domestic additions during year ended December 31, 2014 compared
to 34 hotels in the same period of the prior year. Gross domestic additions for conversion hotels during the year ended December 31, 2014 decreased by 39
from 306 hotels during the year ended December 31, 2013 to 267 hotels. Conversion hotel openings declined by 39 units primarily due to an 8% decline in
the number of domestic conversion franchise agreements executed in 2014 compared to 2013. Conversion franchise agreements executed and opened during
2013 reflected the impact of a strategic marketing alliance entered into with a timeshare company that added 24 hotels to our Ascend Hotel Collection brand
without similar impact in 2014. The remaining decline reflects the variability in the timing of hotel openings from period to period. The timing of conversion
hotel openings are impacted by various factors including the complexity of the property improvement plans required to be completed prior to opening but
typically open within three to four months after the execution of a franchise agreement. The Company expects the number of new franchise units that will
open during 2015 to increase from 302 hotels in 2014 to 348 hotels. The projected increase in gross openings primarily reflects an additional 20 new
construction openings as well as a 26 unit increase in conversion openings. The increase in new construction openings reflects the improving hotel
development environment which has resulted in an increase in new construction executed franchise agreements since 2012. New construction hotels
typically average 18 to 36 months to open after the franchise agreement is executed.
Net domestic franchise terminations increased by 18 units from 243 for the year ended December 31, 2013 to 261 for the year ended December 31,
2014. The increase in net terminations is primarily related to the removal of hotels for non-compliance with the Company's rules, regulations and standards as
well as non-payment of franchise fees. In addition, terminations reflect an increase in franchisees electing not to renew their franchise agreements at the
contractual window as franchisees may be unwilling or unable to meet the Company's increasing brand standards and property improvement plans. As
industry supply growth continues to improve and return to historical levels, the Company will continue 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 $0.2 million from $24.7 million in the year ended December 31, 2013 to $24.5 million for the same period in 2014
despite a 1.1% increase in the number of rooms available primarily due to declining RevPAR performance in the various countries in which we operate and
the negative impact of foreign currency fluctuations. International available rooms increased by 1,144 rooms to 106,617 as of December 31, 2014 from
105,473 as of December 31, 2013. The total number of international hotels on-line decreased by 2 units from 1,160 at December 31, 2013 to 1,158 at
December 31, 2014.
Initial Franchise and Relicensing Fees
Domestic initial franchise fee revenue, included in the initial franchise and relicensing fees caption above, generated from executed franchise
agreements decreased 3% to $10.8 million for 2014 from $11.0 million for 2013. Initial franchise fee revenue decreased despite a 7% increase in the number
of new executed franchise agreements primarily due to the timing of
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