For a modeled 150-room U.S. AC Hotels by Marriott property, the defensible analytical range is approximately $540,000 to $1.42 million in annual manager-run, pre-tax owner earnings before financing and capital reserves. The base scenario is about $928,000. These figures are estimates—not earnings reported by AC Hotels, MIF, L.L.C., or Marriott International, Inc.
This range is an independent analytical scenario, not an Item 19 financial performance representation by the franchisor. It combines identified facts from the 2026 AC Hotels Domestic Franchise Disclosure Document with separately labeled revenue and residual-margin assumptions. Actual results can differ materially because of location, room count, format, sales mix, labor, occupancy, property taxes, insurance, management structure, financing, capital expenditures, owner involvement, and execution.
Legal franchisor: MIF, L.L.C., a subsidiary of Marriott International, Inc. Issuance date: March 31, 2026. Item 19 status: official 2025 ADR, occupancy, RevPAR, RevPAR Index, reservation-channel, and Marriott Bonvoy metrics—but no Gross Sales total, Operating Profit, EBITDA, Net Income, owner compensation, or cash-flow disclosure. Applicable population: mature franchised AC Hotels in the United States and Canada, not a U.S.-only cohort. External benchmark used: U.S. Bureau of Labor Statistics lodging-manager wages for the owner-role adjustment. Date checked: July 14, 2026.
What does the AC Hotels FDD actually disclose?
Officially, Item 19 discloses room-revenue performance, not owner earnings. For calendar 2025, 108 franchised “STR Included Hotels” reported average ADR of $212.78, average occupancy of 74.5%, and average RevPAR of $158.49. The median RevPAR was $154.08. These hotels were open as franchised AC Hotels by Marriott properties for at least two years and met specified renovation and expansion conditions.
RevPAR means guestroom revenue per available room. It does not deduct payroll, housekeeping, food and beverage costs, utilities, insurance, property taxes, management fees, franchise fees, capital reserves, interest, or debt principal. Calling $158.49 “owner income” would therefore be incorrect.
The median and average sit close together, but the observed hotel-level range is very wide.
Interpretation: the central observations were stable across the two cohorts, but the range shows that market and property differences can overwhelm a single average. Source: 2026 AC Hotels FDD, Item 19, pp. 110–111. The FDD states that STR data were not audited or otherwise confirmed by the franchisor.
The 108-hotel STR cohort equals about 80.6% of the 134 franchised hotels identified in Item 19. It excludes newer properties and certain hotels affected by material renovations or expansions. It also combines U.S. and Canadian properties, with Canadian results translated to U.S. dollars. That mixed geography is one reason the earnings estimate receives a Limited confidence label.
How is the annual earnings range calculated?
The estimate converts the official median RevPAR into annual room revenue for a 150-room property, then applies explicitly assumed residual margins. It is a reproducible scenario for the modeled format—not a forecast for a specific site and not a franchisor-endorsed result.
- Revenue anchor: the official $154.08 median RevPAR from the 108-hotel, two-year Item 19 cohort.
- Scenario spread: Conservative, Base, and Upside RevPAR equal 80%, 100%, and 120% of the median—$123.26, $154.08, and $184.90. This spread is analytical, not FDD-reported.
- Residual margins: 8%, 11%, and 14% of room revenue after normal unit-level operating expenses and recurring franchise charges. These are editorial sensitivity assumptions because Item 19 gives no property expense or profit statement.
- Included in the margin assumption: ordinary operating labor, a paid general manager, occupancy-related costs, and disclosed recurring system charges. No FDD fee is subtracted a second time.
- Excluded from owner earnings: depreciation, property-level capital expenditures and replacement reserves, interest, financing principal, and personal income taxes. Ancillary revenue and its directly associated costs are not modeled separately.
Annual pre-tax owner earnings before financing and capital reserves for the modeled 150-room property.
Interpretation: the range is driven by both room-revenue performance and the unknown property-level cost structure. It should be treated as sensitivity analysis, not as low, expected, and high probabilities. Source: RevPAR anchor from 2026 AC Hotels FDD, Item 19, pp. 110–111; room count and residual margins are stated scenario assumptions.
At 150 rooms, every $10 change in annual RevPAR changes room revenue by $547,500. At the 11% base residual margin, that is about $60,225 of annual owner earnings. Separately, a one-percentage-point change in the residual margin changes base-case earnings by about $84,359. Market pricing and cost control are therefore both material.
How much of room revenue is committed to AC Hotels system charges?
Item 6 creates a baseline charge of 9.85% of Gross Room Sales, plus $10,000 per year and $220 per guestroom per year. The 9.85% combines the 6.0% Franchise Fee and the 3.85% Program Services Contribution; the latter includes a 2.5% Marketing Fund contribution. For a 150-room hotel, the fixed portion is $43,000 annually.
6.0% Franchise Fee + 3.85% Program Services Contribution + $43,000 fixed annual charge for 150 rooms.
Interpretation: these are not the hotel’s total operating expenses. They are only the most directly calculable recurring system charges. Source: 2026 AC Hotels FDD, Item 6, p. 31; derived using the three room-revenue scenarios.
The chart excludes charges whose base varies by customer, channel, system usage, or operating choice. Item 6 also identifies a Marriott Bonvoy Loyalty Program charge of 2.2% of qualifying revenue through December 2027, plus 1% of qualifying event revenue for certain events; designated online distribution commissions generally in the 7% to 10% range on qualifying sales; technology and transaction charges; and Revenue Management Advisory Services generally costing $1,265 to $1,400 per month for most hotels, or more in specified circumstances. The scenario residual margins are assumed to absorb these costs where applicable, so they are not subtracted again.
In the base scenario, modeled room revenue is about $8.44 million, while the baseline system charge alone is about $874,000. The remaining difference is not owner profit: it still must support hotel labor, housekeeping, food and beverage operations, utilities, maintenance, insurance, property taxes, management, supplies, and other property expenses.
Does active owner involvement increase the result?
Potentially, but the increase represents compensation for labor rather than passive profit. Item 15 requires the franchisee to operate the hotel or retain a Marriott-approved management company. A general manager who completed the required training must directly supervise the hotel on the premises, and the general manager and other managers must devote full time to operations.
The manager-run scenarios include normal manager compensation in the assumed operating-cost structure. When a qualified owner personally replaces a paid general manager, the analysis adds the BLS median lodging-manager wage of $68,130 as a labor-value proxy. BLS reports that most lodging managers work full time and may work evenings, weekends, holidays, and on-call hours. The wage is a national occupation benchmark, not AC Hotels compensation, and it excludes employer payroll taxes and benefits.
| Base-case owner role | Annual amount | What the figure means |
|---|---|---|
| Manager-run owner earnings | $927,947 | Residual business earnings after assumed normal unit expenses, including a paid manager; before financing and capital reserves. |
| Owner-operator benefit | $996,077 | Manager-run earnings plus $68,130 of estimated labor value when the owner fully replaces the paid general manager. |
Across all three scenarios, estimated owner-operator benefit is approximately $608,000 to $1.49 million. This is not a passive-income range. It combines residual operating earnings with the market value of full-time work performed by the owner. If Marriott requires an approved management company, or the owner chooses one, the management fee and centralized overhead may differ materially from a single-manager wage.
What could move actual owner earnings outside the range?
The largest unresolved variable is the property-level expense structure. Item 19 does not provide hotel EBITDA, Net Income, Gross Operating Profit, payroll ratios, occupancy costs, management fees, property taxes, insurance, capital reserves, or debt service. The 8% to 14% residual-margin band is therefore the model’s most important assumption.
- Estimated pre-tax owner earnings
- Cash modeled as available after normal unit-level operating expenses and recurring franchise fees, but before depreciation, capital expenditures and replacement reserves, interest, financing principal, and personal income taxes.
- Owner-operator benefit
- Estimated pre-tax owner earnings plus the wage value of general-manager work personally performed by a qualified owner.
- Debt service
- Excluded. Interest and principal can reduce or eliminate distributions even when hotel operations are positive.
- Personal taxes
- Excluded. Entity structure, jurisdiction, deductions, depreciation, passive-activity rules, and owner circumstances determine tax outcomes.
Other material uncertainties include the mix of room and food-and-beverage revenue, labor market conditions, the property’s age and renovation cycle, local property taxes and insurance, online travel agency use, Marriott Bonvoy qualifying revenue, approved management-company terms, and the financing package. Item 7’s initial investment ranges are capital requirements, not annualoperating expenses, and are not subtracted from one year of sales.
Item 19 states that 144 AC Hotels were open in the United States and Canada at December 31, 2025, while Item 20 Table 1 totals 142 outlets at 2025 year-end. Both sections identify 134 franchised outlets, and Item 19 explicitly identifies the 108-hotel STR cohort. A buyer should ask MIF, L.L.C. to reconcile the two-hotel total-outlet difference before relying on system population percentages.
What should a prospective owner verify before using this range?
Use the range as a screening tool, then replace every broad assumption with property-specific evidence. The FDD says written substantiation for Item 19 is available on reasonable request, and Item 20 provides contacts for current and former franchisees.
- Request the Item 19 written substantiation and confirm how the 108 STR Included Hotels were selected, including the U.S.-versus-Canada split.
- Ask for comparable U.S. property-level profit-and-loss statements for hotels near the proposed room count, market type, age, and service mix.
- Interview current and former franchisees about Gross Operating Profit, hotel EBITDA, manager or management-company cost, FF&E reserve, insurance, property taxes, debt service, and actual owner distributions.
- Reconcile the proposed hotel’s entire Item 6 fee schedule, including loyalty, reservation, OTA, technology, payment-processing, revenue-management, and required-program charges.
- Model monthly seasonality, not only an annual RevPAR average, and stress-test occupancy, ADR, payroll, insurance, utilities, and renovation downtime.
- Separate operating earnings from financing. Obtain a lender term sheet and calculate interest and principal independently before estimating distributable cash.
What is the strongest defensible earnings takeaway?
The strongest defensible range is approximately $540,000 to $1.42 million per year for a modeled 150-room, manager-run AC Hotels property, before financing and capital reserves. It is a scenario-based estimate anchored to the 2026 FDD’s official 2025 median RevPAR, not an official earnings disclosure. The most important earnings driver is the combination of RevPAR and property-level expense control. The largest unresolved uncertainty is that Item 19 supplies no compatible hotel profit or expense statement. Before proceeding, a buyer should verify the Item 19 substantiation, obtain comparable property P&Ls, reconcile all Item 6 charges, and test the model through current and former franchisee interviews.
FDD references use the printed page numbers: cover; Item 1, pp. 1–2; Item 6, p. 31 and related fee notes; Item 15, p. 99; Item 19, pp. 110–115; and Item 20, pp. 116–122. Historical results do not assure that another hotel will achieve the same sales, revenue, or performance.