For a mature, 107-suite U.S. Home2 Suites by Hilton hotel, a defensible independent scenario produces approximately $1.08 million to $1.93 million of annual property-level pre-tax owner earnings, with a base case near $1.48 million. This is before capital expenditures, owner-level overhead, interest, debt principal, depreciation and personal income taxes.
This range is an independent analytical scenario, not an Item 19 financial performance representation by Hilton Franchise Holding LLC. It combines identified facts from the 2026 Home2 Suites U.S. Franchise Disclosure Document with a separately identified public-hotel operating-margin benchmark and explicit scenario assumptions. Actual results can differ materially by location, hotel format, room rate, occupancy, labor, management structure, occupancy costs, financing, owner involvement and execution.
Legal franchisor: Hilton Franchise Holding LLC
FDD: 2026 Home2 Suites U.S. FDD, issued March 30, 2026
Item 19 status: Reports Room Rate, Occupancy, RevPAR and related operating metrics—not profit or owner compensation
Applicable cohort: 2025 Comparable Hotels, including 559 Franchisee-Managed hotels
External benchmark: Apple Hospitality REIT 2025 Comparable Hotels Adjusted Hotel EBITDA Margin
Date checked: July 21, 2026
What does the 2026 Home2 Suites Item 19 actually measure?
Officially, Item 19 measures hotel demand and room-revenue productivity, not owner earnings. For 2025 Comparable Hotels, the disclosure reports average and median Room Rate, Occupancy, Revenue per Available Room, RevPAR Index and extended-stay metrics. It does not report Gross Sales, Operating Profit, EBITDA, Net Income, Cash Flow, Owner Compensation or distributions.
The strongest central revenue anchor is the $110.67 median RevPAR. RevPAR means Gross Rooms Revenue divided by available guest rooms. It is revenue productivity per available room, not business profit. The 2026 FDD also reports average RevPAR of $112.63 and a range of $54.43 to $249.29 for all Comparable Hotels. Among 559 Franchisee-Managed Comparable Hotels, 279, or 49.9%, met or exceeded the median RevPAR. These figures apply to hotels that had operated for at least one full calendar year and met the FDD's comparability rules. Newly opened hotels and specified disrupted or materially changed hotels were excluded. Source: 2026 Home2 Suites U.S. FDD, Item 19, pp. 81–88.
The cohort is broad for a same-brand operating metric: the U.S. system had 731 Home2 Suites hotels at December 31, 2025, of which 561 qualified as Comparable Hotels. Two were Company-Managed and 559 were Franchisee-Managed. Item 20 separately shows zero company-owned hotels; that is not a contradiction because a Company-Managed hotel can still be franchised. The distinction matters when interpreting who operates a hotel versus who owns it. Source: 2026 Home2 Suites U.S. FDD, Items 19–20, pp. 81–94.
The central same-brand room-revenue anchor for Comparable Hotels.
The relevant franchisee-managed portion of the 2025 comparable cohort.
6.0% royalty plus 3.5% Monthly Program Fee, both based on Gross Rooms Revenue.
Apple Hospitality REIT's 2025 Comparable Hotels Adjusted Hotel EBITDA Margin.
May 2025 BLS national mean annual wage, before employer benefits.
A hotel can post strong RevPAR and still produce weak owner cash flow if labor, utilities, insurance, property taxes, repairs, management fees, renovations or financing costs are high. Item 19's $110.67 median RevPAR is therefore a revenue input, not an owner-income result.
How is the annual Home2 Suites owner-earnings range calculated?
The estimate converts the FDD's median RevPAR into modeled room revenue, then applies a public property-level hotel margin proxy. The base case uses the 107-suite prototype described in Item 7, 365 available days and the $110.67 median RevPAR reported for 2025 Comparable Hotels.
The 34.3% benchmark comes from Apple Hospitality REIT's official 2025 results. Apple reported 216 Comparable Hotels and defined Adjusted Hotel EBITDA as a measure intended to isolate property-level operating performance. Its portfolio is U.S., rooms-focused and includes upscale select-service and extended-stay hotels, but it is not a Home2 Suites franchisee-profit sample. The benchmark is therefore a proxy, not same-brand evidence.
The revenue denominator is also imperfect: the Home2 Suites model starts with Gross Rooms Revenue, while Apple's margin is calculated on total hotel revenue. The model does not add ancillary revenue, and it does not attempt to recreate every line of a hotel income statement. That compatibility limitation is a primary reason the evidence confidence is Limited.
| Scenario | Modeled RevPAR and room revenue | Margin assumption | Estimated pre-tax owner earnings |
|---|---|---|---|
| Conservative | $88.54 RevPAR; $3,457,773 room revenue | 31.3% | $1,082,283 |
| Base | $110.67 RevPAR; $4,322,217 room revenue | 34.3% | $1,482,520 |
| Upside | $132.80 RevPAR; $5,186,660 room revenue | 37.3% | $1,934,624 |
Annual estimated pre-tax owner earnings before capital expenditures, financing and owner-level overhead.
Interpretation: Revenue and margin move together in these analytical scenarios, so the range is a sensitivity band—not a probability forecast or promise of results.
Sources: 2026 Home2 Suites U.S. FDD, Items 7 and 19; Apple Hospitality REIT 2025 full-year results. Calculations use full-precision inputs and are rounded only for display.
What assumptions create the conservative and upside cases?
The revenue spread and margin spread are editorial assumptions, not FDD-reported performance bands. Because Item 19 provides one central median RevPAR but no quartiles, the model applies 80%, 100% and 120% of median RevPAR. Because the external benchmark provides one annual margin, the model uses the benchmark minus 3 percentage points, the benchmark, and the benchmark plus 3 percentage points.
- Revenue: 80%, 100% and 120% of the $110.67 FDD median RevPAR.
- Capacity: 107 suites available for 365 days, matching the FDD prototype.
- Margin: 31.3%, 34.3% and 37.3% as an explicit sensitivity around the Apple benchmark.
- Ancillary revenue: No separate uplift for pet fees, retail, parking or other non-room revenue.
- Excluded cash uses: Capital expenditures, owner-level general and administrative costs, interest, debt principal, depreciation and personal income taxes.
- Maturity: The model is for a stabilized comparable-style hotel, not a newly opened property's ramp-up year.
How does active owner involvement change Home2 Suites earnings?
Direct owner operation may add roughly $78,740 of labor value, but that increment is compensation for work—not passive business profit. Item 15 permits the hotel to be operated by the franchisee or an approved third-party Management Company. An owner who wants to manage directly needs Hilton's prior written approval and must satisfy training and qualification requirements.
The owner-operator scenario adds the May 2025 Bureau of Labor Statistics national mean wage for lodging managers, $78,740, to the manager-run residual. The BLS wage excludes employer benefits and is not a Home2 Suites compensation disclosure. It is used only as a transparent proxy for the market value of management labor that an approved, qualified owner might personally perform.
The owner-operator figure adds $78,740 of labor value to each property-level scenario.
Interpretation: The owner-operated increment is relatively small beside hotel-level operating earnings and represents a full management job. A 24-hour hotel still requires adequate staffing, controls and coverage.
Sources: 2026 Home2 Suites U.S. FDD, Item 15, pp. 68–70; U.S. Bureau of Labor Statistics, May 2025 national occupational wage data.
Do not describe the $78,740 increment as passive profit. It is an estimate of labor compensation for a qualified owner who performs lodging-management work that otherwise would be paid to an employee. It also does not substitute for a full hotel team or automatically eliminate an outside Management Company fee.
Which recurring Home2 Suites fees affect the earnings model?
The clearest recurring FDD burden is 9.5% of Gross Rooms Revenue: a 6% Monthly Royalty Fee plus a 3.5% Monthly Program Fee. At the base modeled room revenue of $4.32 million, those two charges alone equal approximately $410,611 per year. That is a same-FDD derived calculation, not a total estimate of all franchise-related costs.
Item 6 also lists ongoing technology, connectivity, loyalty, reservation, distribution, training and program charges. Some are fixed, some depend on users or rooms, and others depend on bookings, transactions or optional programs. Management fees are established by agreement if Hilton or an affiliate manages the hotel, and an outside Management Company may charge separately. The 9.5% figure therefore should not be treated as the entire fee burden. Source: 2026 Home2 Suites U.S. FDD, Item 6, pp. 21–35.
The scenario does not subtract the 9.5% a second time from Apple's 34.3% margin proxy. Apple's property-level metric is calculated after hotel operating expenses and is intended to capture operator-controlled property performance, so a second deduction would create an obvious double-counting risk. The remaining limitation is that Apple's portfolio has its own franchise and management arrangements, which may not match a Home2 Suites hotel's exact expense structure.
Property-level cash-generating operating benefit after normal hotel operating expenses and recurring franchise or management costs represented by the margin proxy, but before capital expenditures, owner overhead, interest, debt principal, depreciation and personal income taxes.
Estimated pre-tax owner earnings plus the market value of lodging-management labor personally performed by an approved owner. It combines business residual and labor compensation.
Interest and principal payments are excluded from the scenario because financing terms vary by borrower, site, construction cost and capital structure. Each dollar of debt service reduces cash available to the owner by a dollar.
Renovations, replacements and property improvements are excluded. They can materially reduce distributable cash even when property-level EBITDA is strong.
No after-tax estimate is published because tax results depend on ownership entity, jurisdiction, depreciation, deductions and the owner's circumstances.
Why is the evidence confidence limited?
Confidence is Limited because the current same-brand FDD provides a strong revenue-productivity metric but no same-brand expense or earnings measure. The model can reproduce annual room revenue from Item 19 RevPAR and the Item 7 prototype room count, but the operating margin must come from an external public-hotel portfolio.
The largest unresolved uncertainty is the actual Home2 Suites property-level cost structure for a specific market. Labor scheduling, insurance, property taxes, utilities, management-company terms, repairs, franchise programs, local demand and capital reserves can produce large differences between two hotels with similar RevPAR.
- Location economics: Obtain a third-party market study with local ADR, occupancy, demand generators, new supply and seasonality.
- Comparable hotel statements: Request anonymized or permissioned operating statements for mature Home2 Suites hotels with similar suite counts and markets.
- Management structure: Price an approved Management Company and compare its fee structure with a qualified direct-owner plan.
- Full Item 6 burden: Model loyalty, reservation, technology, distribution, training and required-program fees using the proposed hotel's expected booking mix.
- Capital reserve: Build a separate replacement and renovation schedule rather than treating EBITDA as fully distributable cash.
- Financing: Run interest-rate, leverage and amortization cases separately from operating earnings.
What should a prospective owner verify before relying on this range?
A buyer should treat the $1.1 million to $1.9 million range as a screening model and replace its proxy assumptions with property-specific evidence. The most useful next evidence is written Item 19 substantiation, actual records for an existing hotel when applicable, and interviews with current and former franchisees operating comparable properties.
The Federal Trade Commission's franchise-buying guide explains that gross sales do not establish profit, Item 19 claims should disclose their basis and limitations, and a prospective franchisee should request written substantiation. The 2026 Home2 Suites FDD likewise states that written substantiation for its Item 19 representation will be made available on reasonable request.
- Ask for the written substantiation behind the 2025 Room Rate, Occupancy and RevPAR tables.
- Confirm whether the proposed site resembles the 559 Franchisee-Managed Comparable Hotels by age, market type, suite count and demand profile.
- Interview franchisees about total hotel revenue, departmental expenses, undistributed operating expenses, fixed charges, Management Company fees and recurring capital needs.
- Request actual trailing operating statements when considering an existing Home2 Suites hotel; keep per-unit results separate from multi-hotel owner overhead.
- Reconcile the lender's debt-service schedule and required reserves to the operating model before estimating owner distributions.
- Ask which Item 6 programs will be mandatory for this hotel and how those charges are expected to change during the franchise term.
What is the strongest defensible Home2 Suites owner-earnings takeaway?
The strongest defensible screening range is approximately $1.1 million to $1.9 million of annual property-level pre-tax owner earnings for a mature 107-suite hotel, with a base scenario near $1.48 million. It is scenario-based, not an official Home2 Suites profit disclosure.
The most important earnings driver is RevPAR, which combines Room Rate and Occupancy. The largest unresolved uncertainty is the Home2 Suites-specific operating-cost and capital-expenditure profile that Item 19 does not disclose. Before making a decision, a buyer should verify the Item 19 substantiation, obtain market-specific projections and financing terms, and compare this model with actual statements and detailed interviews from franchisees operating similar mature hotels.