AAHOA highlights fair franchising's significance in FTC comment
AAHOA's submission documents 69 hotel brand contacts since March 2022
By Vishnu Rageev RJun 28, 2023
AAHOA EXPRESSED CONCERNS about unfair franchising practices to the Federal Trade Commission in response to their request for public comment on franchise agreements and business practices. According to AAHOA, the FTC has a critical role in regulation of the franchise industry, including ensuring adequate protections are in place and that franchisers are operating in compliance with the FTC’s legal requirements – both as they currently exist and are apt for modernization.
“In identifying an array of problematic, unfair practices and provisions within hospitality franchising, AAHOA aspires to advance the interests of its franchisee members and advocate for both enforcement and reform,” states AAHOA’s letter to the FTC.
In response to reports of "unfair and deceptive practices" harming franchisees, the FTC began a process in March to gather comments from business owners regarding the disclosure and contractual terms of franchise relationships, covering their extent, application, and impact. AAHOA's response, driven by more than a year of member advocacy, builds on the momentum for sustainable franchising practices, AAHOA said.
“The association’s submission reflects at least 69 documented contacts with hotel brands and their representatives since March 2022,” AAHOA said.
AAHOA Chairman Bharat Patel on stage at AAHOACON23.
"We look forward to the FTC’s anticipated efforts to identify and rein in certain practices of the hospitality franchisers that take advantage of their extensive market power to the detriment of our members,” said Bharat Patel, chairman of AAHOA. “AAHOA members are ready and willing to assist the FTC in its work to ensure fairness and transparency are hallmarks of the franchise industry."
In the latest edition of Asian Hospitality’s Leadership series, AAHOA’s former and new chairmen emphasized the association’s commitment to serving the needs of its members as its primary purpose. AAHOA members, who own 60 percent of U.S. hotels, contribute approximately $368.4 billion in annual economic output, equivalent to around 1.7 percent of the U.S. GDP, according to Oxford Economics.
Key concerns
AAHOA’s 12 Points of Fair Franchising reflect the current business landscape and the long-term, mutually beneficial relationship between industry franchisors and franchisees.
“These 12 Points are aimed at promoting sustainable practices that acknowledge and protect the contributions of small business owners and entrepreneurs,” AAHOA said.
According to AAHOA, the association’s comments covered various issues, including but not limited to:
The exploitation of market power by franchisers
Rebates and arbitrary mandates that result in increased costs for franchisees
Limited or non-existent negotiation abilities for franchisees, leading to franchisers imposing exploitative terms.
"On behalf of our nearly 20,000 AAHOA members who are responsible for 1.7 percent of the nation’s GDP, we voiced our concerns and highlighted the importance of ensuring fair treatment of Franchisees, because this impacts the U.S. economy,” said Laura Lee Blake, AAHOA president and CEO. “We commend FTC Chair Lina Khan and the rest of the commission for providing this opportunity. It is critical that the FTC use its influence and enforcement powers to ensure a more equitable franchising industry that protects the investments of hard-working small-business owners."
Franchise advocacy principles
Moreover, the association’s comments also highlighted its Four Core Pillars as a focal point. According to AAHOA, Franchise Advocacy, which shapes its advocacy endeavors, focuses on the following principles:
Full disclosure of vendor rebates, derived from Franchisee purchases, amounting to tens of millions of dollars, with the objective of returning them to Franchisees for system improvement.
Fair compensation for hotel owner Franchisees when the brand sells guest loyalty points, ensuring equitable profit sharing.
Encouraging fair pricing and competition by restricting mandated vendors for non-trademarked products and promoting diversity of options.
Prevention of unilaterally imposed and arbitrary Franchise fees without appropriate disclosure and approval processes.
Proponents versus detractors
AAHOA has consistently sought direct discussions with franchisers regarding the franchising relationship. However, some have not seen eye to eye.
“While some franchisers have maintained open and productive dialogue, others chose to disengage from AAHOA due to its exercise of its First Amendment right to support legislation in New Jersey, which aligns with the association's Fair Franchising principles,” AAHOA said. “In a collective action, five national hotel chains withdrew their support for AAHOA and declined to participate in the association's annual convention held in Los Angeles in April. Moreover, several of them organized competing events within close proximity to AAHOA's convention venue.”
Pat Pacious, president and CEO of Choice Hotels, said the conflict between AAHOA and his company is not about fair franchising and that dialogue between the two parties must continue.
Marriott withdrew support for AAHOA in January due to their stance on fair franchising and support for New Jersey Assembly Bill 1958. Choice also followed suit in February. Additionally, companies like IHG Hotels & Resorts and Hilton did not have booths at the AAHOACON show. On the other hand, G6 Hospitality, BWH Hotel Group, and Red Roof have publicly endorsed AAHOA's 12 Points.
In a May edition of the Leadership Series, Choice's President and CEO, Pat Pacious, discussed the ongoing debate. He highlighted Choice Hotels' franchisee-friendly approach and stressed the significance of open dialogue and finding common ground with AAHOA to rebuild a strong partnership and address industry challenges.
“Considering the high stakes involved and the reluctance of certain brands to engage in direct discussions with AAHOA regarding franchising challenges, particularly the specific provisions of the New Jersey legislation, the association has conveyed the concerns of its member hoteliers to the FTC in response to their recent request for comments,” AAHOA said.
Franchiser-franchisee relationship is vital
Amidst ongoing hotel recovery from the pandemic, workforce shortages, and competition from home-based rental apps, a mutually productive relationship between franchisers and franchisees is vital for the hospitality sector and the overall economy. Unfortunately, the positions taken by hotel brands hinder this relationship and impede the overall health and growth of the hospitality sector, AAHOA said.
Meanwhile, AAHOA's May survey revealed that just 5 percent of franchisee respondents find their current franchise agreements to offer fair terms and a balanced relationship with their franchisers. Additionally, a significant 72.6 percent of respondents expressed potential intentions to terminate their franchised businesses within the next year, provided there are no penalties involved.
Global hotel rates are expected to remain stable through 2026, according to AMEX GBT.
New York is a key business travel and meetings destination.
India is likely to be a focus for travel programs during 2026 negotiations.
GLOBAL HOTEL RATES are expected to remain stable through 2026, as geopolitical tensions and potential U.S. tariffs limit demand and constrain price increases, according to American Express Global Business Travel. New York remains a popular destination for business travel and meetings.
AMEX GBT’s Hotel Monitor 2026, an annual forecast of global hotel rates in business travel destinations, identified India as a key market, with hotel rates and occupancy set to rise.
“This year’s forecast reveals a global environment where geopolitical uncertainties are tempering hotel rate increases,” said Dan Beauchamp, Amex GBT’s vice president for consulting. “These insights allow businesses to make more informed travel decisions. Understanding local market conditions will help companies optimize travel budgets and strategies.”
The report also projects continued rate increases for high-end accommodation based on demand.
New York hotel rates are projected to rise 4 percent in 2026. Despite expected softening in inbound U.S. travel from tariff uncertainty, New York remains a leading destination for business travel and meetings. The forecast is based on company data and IMF inflation and GDP projections.
India is expected to see rising hotel rates and occupancy in 2026. Rate growth will be below last year’s levels but above regional and global averages. India is likely to be a focus for many travel programs during 2026 negotiations. Bengaluru, a major technology and AI hub, recorded the country’s highest occupancy and ADR in the first quarter of 2025.
Simon Fishman, Amex GBT’s vice president for global hotels, said data shows news cycles can affect hotel prices in unpredictable ways.
“Amex GBT’s hotel marketplace gives companies access to over two million properties across 180 countries, including more than 45,000 hotels with pre-negotiated discounts and amenities via the Preferred Extras Hotel Program,” he said. “It enables companies of all sizes to adapt to changing business needs while accessing the best rates and traveler experiences.”
A May report by commerce media firm Criteo found that hotel booking values in Asia-Pacific rose 23 percent in early 2025, compared with 2 percent growth in the Americas.
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The Trump administration says it is reviewing more than 55 million visa holders.
Reviews cover a wide range of visas for law enforcement and overstay violations.
The administration also suspended worker visas for foreign commercial truck drivers.
THE TRUMP ADMINISTRATION is reviewing more than 55 million people who hold valid U.S. visas for potential violations. It is expanding a policy of “continuous vetting” that could result in revocation and deportation.
The State Department confirmed all visa holders are subject to ongoing review, which includes checking for overstays, criminal activity, threats to public safety or ties to terrorism. Should violations be found, visas may be revoked, and holders in the U.S. could face deportation, according to the Associated Press.
Officials said the reviews will include monitoring of visa holders’ social media accounts, law enforcement records and immigration files. New rules also require applicants to disable privacy settings on phones and apps during interviews. The department noted visa revocations since President Trump’s return to office have more than doubled compared to the previous year, including nearly four times as many student visas.
The administration also announced an immediate halt on issuing worker visas for foreign commercial truck drivers, with Secretary of State Marco Rubio citing road safety and competition concerns for U.S. truckers.
“The increasing number of foreign drivers operating large tractor-trailer trucks on U.S. roads is endangering American lives and undercutting the livelihoods of American truckers,” Rubio posted on X.
The Transportation Department linked the move to recent enforcement of English-language proficiency requirements for truckers, aimed at improving safety. The State Department later said it was pausing visa processing while it reviewed screening protocols.
Critics, including Edward Alden of the Council on Foreign Relations, warned the actions could have significant economic consequences.
“The goal here is not to target specific classes of workers, but to send the message to American employers that they are at risk if they are employing foreign workers,” Alden wrote, according to AP.
Data from the Department of Homeland Security shows there are 12.8 million green card holders and 3.6 million temporary visa holders in the United States. The 55 million figure under review includes many outside the U.S. with valid multiple-entry tourist visas.
Earlier this week, the State Department reported revoking more than 6,000 student visas for violations since Trump returned to office, including around 200 to 300 for terrorism-related issues.
The vast majority of foreign visitors require visas to enter the U.S., with exceptions granted to citizens of 40 countries under the Visa Waiver Program, primarily in Europe and Asia. Citizens of China, India, Russia and most of Africa remain subject to visa requirements.
A $250 Visa Integrity Fee in President Donald Trump’s Big Beautiful Bill drew criticism from groups that rely on seasonal workers from Latin America and Asia on J-1 and other visas.
Peachtree Group originated a $176.5 million retroactive CPACE loan for a Las Vegas property.
The deal closed in under 60 days and ranks among the largest CPACE financings in the U.S.
The company promotes retroactive CPACE funding for commercial real estate development.
PEACHTREE GROUP ORIGINATED a $176.5 million retroactive Commercial Property Assessed Clean Energy loan for Dreamscape Cos.’s Rio Hotel & Casino in Las Vegas. The deal, completed in under 60 days, is its largest credit transaction and one of the largest CPACE financings in the U.S.
The 2,520-room Rio, now under the Destinations by Hyatt brand, was renovated in 2024 and comprises two hotel towers connected by a casino, restaurants and retail, Peachtree said in a statement.
“This transaction is a milestone for Peachtree Group and a testament to the ecosystem we have built over the past 18 years,” said Greg Friedman, Peachtree's managing principal and CEO. “Through our vertically integrated platform, deep expertise and disciplined approach, we have developed the infrastructure to be a leader in private credit. Our ability to deliver speed, creativity and certainty of execution positions us to provide capital solutions that create value for our investors and partners across market cycles.”
Atlanta-based Peachtree is led by Friedman; Jatin Desai as managing principal and CFO and Mitul Patel as principal.
The CPACE loan retroactively funded the renovations, allowing the owners to pay down their senior loan, the statement said. The property improvement plan included exterior work, upgrades to the central heating and cooling plant, electrical infrastructure improvements and convention center renovations.
Jared Schlosser, Peachtree’s head of originations and CPACE, said the deal marks an inflection point, with major financial institutions consenting to its use for the benefit of the capital stack.
“By closing quickly on a marquee hospitality asset, we were able to strengthen the position of both the owner and its lenders,” he said.
The CPACE market has surpassed $10 billion in U.S. originations in just over a decade, according to the C-PACE Alliance, with growth expected as more institutional owners and lenders adopt it.
“We see significant opportunity for retroactive CPACE and its use in funding new commercial real estate development,” Schlosser said. “It is an alternative to more expensive forms of capital.”
In June, Peachtree named Schlosser head of originations for all real estate and hotel lending and leader of its CPACE program. Peachtree recently launched a $250 million fund to invest in hotel and commercial real estate assets mispriced by capital market illiquidity.
Spark acquired the 120-key Home2 Suites by Hilton Wayne in Wayne, New Jersey.
Hunter Hotel Advisors facilitated the transaction with DC Hospitality Group affiliates.
The 2020-built hotel is near William Paterson University and less than 20 miles from Manhattan.
SPARK GHC RECENTLY acquired the 120-key Home2 Suites by Hilton Wayne in Wayne, New Jersey, from affiliates of DC Hospitality Group. Hunter Hotel Advisors facilitated the deal for an undisclosed amount.
The 2020-built hotel is less than 20 miles from Manhattan in a commercial corridor with major employers including Driscoll Foods, FedEx Group, Advanced Biotech, St. Joseph’s Wayne Hospital, and the Passaic County Administration, Hunter said in a statement. William Paterson University, Willowbrook Mall, and MetLife Stadium are also nearby.
It features an on-site fitness center, business center and indoor pool.
“The Home2 Suites by Hilton Wayne represents the type of asset we target,” said Patel. “Its proximity to major corporate demand generators, higher education institutions, and retail and entertainment venues supports strong performance.”
Hunter’s senior vice presidents, David Perrin and Spencer Davidson, brokered the transaction.
Patel said this is their second transaction with Hunter and praised the process and partnership.
“We look forward to building on the hotel’s recent performance and continuing to deliver guest experiences in the Greater New York City community,” he said.
Northstar Hotels Management recently acquired a 78-key Residence Inn and an 81-key Courtyard near the Jacksonville, Florida, airport.
Global pipeline hit a record 15,871 projects with 2.4 million rooms in Q2.
The U.S. leads with 6,280 projects; Dallas tops cities with 199.
Nearly 2,900 hotels are expected to open worldwide by the end of 2025.
THE GLOBAL HOTEL pipeline reached 15,871 projects, up 3 percent year-over-year, and 2,436,225 rooms, up 2 percent, according to Lodging Econometrics. Most were upper midscale and upscale, LE reported.
The U.S. leads with 6,280 projects and 737,036 rooms, 40 percent of the global total. Dallas leads cities with 199 projects and 24,497 rooms, the highest on record.
LE’s Q2 2025 Hotel Construction Pipeline Trend Report showed 6,257 projects with 1,086,245 rooms under construction worldwide, unchanged in project count and down 3 percent in rooms from last year. Projects scheduled to start in the next 12 months totaled 3,870 with 551,188 rooms, down 3 percent in projects but up 1 percent in rooms. Early planning reached 5,744 projects and 798,792 rooms, up 10 percent in projects and 9 percent in rooms year-over-year.
Upper midscale and upscale hotels accounted for 52 percent of the global pipeline, LE said. Upper midscale stood at 4,463 projects and 567,396 rooms, while upscale reached 3,852 projects and 655,674 rooms. Upper upscale totaled 1,807 projects and 385,396 rooms, and luxury totaled 1,267 projects and 245,665 rooms, up 11 percent year-over-year.
In the first half of 2025, 970 hotels with 138,168 rooms opened worldwide. Another 1,884 hotels with 280,079 rooms are scheduled to open before year-end, for a 2025 total of 2,854 hotels and 418,247 rooms. LE projects 2,531 hotels with 382,942 rooms to open in 2026 and 2,554 hotels with 382,282 rooms to open globally in 2027, the first time a forecast has been issued for that year.