For a mature, manager-run 131-suite Homewood Suites hotel, this is the strongest defensible annual hotel EBITDA proxy—not an official owner-income figure. The base scenario is about $1.41 million. The 2026 Franchise Disclosure Document reports 2025 room revenue performance, but it does not disclose business profit, distributions, owner compensation, net income, or cash flow.
This range is an independent analytical scenario, not an Item 19 financial performance representation by Hilton Franchise Holding LLC. It combines identified Homewood Suites FDD facts with separately identified hotel-industry benchmarks and editorial sensitivity assumptions. Actual results can differ materially because of location, suite count, room rate, occupancy, extended-stay mix, labor, occupancy costs, required programs, financing, owner involvement, property condition, and execution.
- Legal franchisor
- Hilton Franchise Holding LLC.
- Disclosure document
- 2026 U.S. Homewood Suites Franchise Disclosure Document, issued March 30, 2026; reviewed with Hilton’s official disclosure-document library.
- Item 19 status
- Official 2025 Room Rate, Occupancy, RevPAR, RevPAR Index, Hilton Honors contribution, and extended-stay measures; no owner-profit or EBITDA disclosure.
- Applicable population
- 417 U.S. Comparable Hotels, including 411 Franchisee-Managed and 6 Company-Managed hotels; the scenario uses the FDD’s 131-suite prototype.
- Benchmark basis
- CoStar/STR 2024 U.S. hotel TRevPAR and EBITDA per available room; BLS 2025 Accommodation-sector lodging-manager wages.
- Date checked
- July 20, 2026.
What does Homewood Suites Item 19 actually measure?
Officially, Item 19 measures hotel room-revenue performance—not owner earnings. For calendar 2025, the strongest central figure is median RevPAR of $119.27 across 417 U.S. Comparable Hotels. RevPAR is Gross Rooms Revenue divided by available guest rooms, so it does not deduct payroll, utilities, breakfast, housekeeping, insurance, property costs, franchise fees, management expense, interest, or capital spending.
| Cohort | Hotels | Median RevPAR | Median occupancy |
|---|---|---|---|
| All Comparable Hotels | 417 | $119.27 | 79.3% |
| New Generation Comparable Hotels opened during or after 2018 | 90 | $126.18 | 81.5% |
The full Comparable Hotel cohort included hotels operating for at least one full calendar year and open on January 1 of the prior year. Hilton excluded properties with ownership or brand changes, large capital projects, substantial room-count changes, major property damage, or business interruption. That makes the cohort useful for mature-property revenue analysis, but it removes some disruption and ramp-up experience that a new owner could face. Source: 2026 Homewood Suites FDD, Item 19, pp. 78–85.
Why is the $5.70 million figure not owner income?
The $5.70 million figure is a derived room-revenue anchor, not earnings. The calculation is $119.27 median RevPAR × 131 available suites × 365 days = $5,702,895 of annual Gross Rooms Revenue. A hotel can produce that revenue and still have materially different EBITDA, cash flow, distributions, or losses depending on its expense structure and financing.
The Federal Trade Commission warns that gross-sales figures do not reveal actual costs or profit. Buyers should examine Item 19 definitions, the represented population, written substantiation, and actual property records where available. See the FTC’s consumer guide to evaluating franchise earnings claims.
How is the $1.0 million–$1.9 million range calculated?
The range is estimated by combining FDD-derived room revenue with a national hotel EBITDA benchmark. Because Item 19 provides one central RevPAR figure but no quartiles for profit, the analysis applies an explicit 80%, 100%, and 120% revenue spread to median RevPAR. It then applies a 2024 U.S. hotel EBITDA-to-total-revenue benchmark of 24.7%, with a minus/plus three-percentage-point sensitivity band.
- Revenue anchorFDD median RevPAR of $119.27 for 2025 Comparable Hotels.
- Revenue spread80%, 100%, and 120% of the median are editorial scenarios, not FDD quartiles or probabilities.
- Margin anchor2024 CoStar/STR EBITDA PAR of $51.88 divided by TRevPAR of $209.67 = 24.7%.
- Margin sensitivity21.7%, 24.7%, and 27.7%; the three-point spread is analytical, not franchisor guidance.
| Scenario | FDD-anchored RevPAR | Annual room revenue | Manager-run EBITDA proxy |
|---|---|---|---|
| Conservative | $95.42 | $4.56M | $0.99M at 21.7% |
| Base | $119.27 | $5.70M | $1.41M at 24.7% |
| Upside | $143.12 | $6.84M | $1.90M at 27.7% |
Hotel EBITDA proxy for a mature 131-suite property; rounded to the nearest $10,000.
Interpretation: revenue and margin move together in this sensitivity model; the midpoint is not presented as the most likely outcome.
Source and formula: 2026 Homewood Suites FDD, Item 19, pp. 78–85; CoStar/STR 2024 U.S. hotel profitability metrics. Annual room revenue = RevPAR × 131 × 365. Earnings proxy = annual room revenue × scenario EBITDA margin.
The STR denominator is total hotel revenue, while Homewood Suites Item 19 discloses Gross Rooms Revenue through RevPAR. Applying the national all-hotel EBITDA ratio to room revenue is potentially conservative when non-room revenue contributes positive EBITDA, but it can still overstate or understate Homewood economics because chain scale, franchise fees, management arrangements, property taxes, insurance, and accounting classifications may differ. CoStar separately reports that extended-stay hotels often produce 40%–50% gross operating profit margins, but GOP is not EBITDA and is not used as owner earnings here. See CoStar’s hotel profitability framework by property type.
How does active owner involvement change the result?
Direct owner operation may add roughly $77,120 of annual labor value if the owner truly replaces a paid lodging-manager position. This is an estimated owner-operator benefit, not pure business profit. The FDD permits an owner to manage the hotel only with Hilton’s prior written approval and completion of required training; Hilton may require an approved Management Company if it considers the owner unqualified.
The owner-operator point adds one BLS lodging-manager wage to the residual operating estimate.
Interpretation: the $77,120 increment compensates the owner for work performed. It should not be described as passive profit, and it disappears if the hotel still pays a comparable manager or management company.
Source: 2026 Homewood Suites FDD, Item 15, pp. 65–67; BLS Accommodation-sector earnings by occupation, 2025 mean annual wage for lodging managers.
- Manager-run estimate
- Residual hotel EBITDA proxy after ordinary hotel operating labor reflected in the benchmark; before property debt, income taxes, depreciation, amortization, principal payments, and capital expenditures.
- Owner-operator benefit
- Manager-run estimate plus the market value of one displaced lodging-manager role. It combines business economics with labor compensation.
- Owner distributions
- Cash actually distributed after entity-level decisions, debt service, reserves, capital projects, and lender restrictions; not disclosed in Item 19 and not estimated here.
How much do the core Homewood Suites fees affect earnings?
For a mature New Development or Conversion hotel, the core royalty and Monthly Program Fee total 8.0% of Gross Rooms Revenue. At the base scenario’s $5.70 million room-revenue level, that equals about $456,000 annually. This amount is not subtracted again from the scenario estimate because the STR EBITDA benchmark is intended to reflect hotel operating expenses; charging the full fee a second time could double count it.
| New Development/Conversion period | Royalty | Monthly Program Fee | Illustrative annual total at $5.70M |
|---|---|---|---|
| Year 1 | 3.5% | 2.5% | $342,000 |
| Year 2 | 4.5% | 2.5% | $399,000 |
| Year 3 and later | 5.5% | 2.5% | $456,000 |
The FDD also lists technology, reservation, loyalty, distribution, quality-assurance, training, revenue-management, procurement, and optional program charges. Many depend on bookings, transactions, suite count, vendor selection, performance, or program participation, so a single annual total cannot be calculated without a property-specific operating plan. Source: 2026 Homewood Suites FDD, Item 6, pp. 20–34.
Item 7 estimates $23.76 million–$34.73 million to begin operating a typical 131-suite hotel, excluding real estate. That initial investment is not subtracted from one year of revenue. Debt interest, principal amortization, depreciation, and future renovation capital can materially reduce cash available to the owner, but they require property-specific financing and asset assumptions.
What could move actual owner earnings outside this range?
The largest unresolved uncertainty is the property-level expense structure. Homewood Suites Item 19 provides a broad same-brand revenue sample, but not payroll, breakfast cost, housekeeping cost, utilities, insurance, property taxes, management fees, repair expense, FF&E reserves, or owner distributions. The margin therefore comes from a broader U.S. hotel benchmark rather than a Homewood-specific profit statement.
- Local RevPARThe FDD’s Comparable Hotel RevPAR ranged from $40.53 to $298.02 in 2025. Market demand and competitive supply can dominate the result.
- Extended-stay mixHomewood reported about 48% of consumed room nights as stays of five or more nights. Longer stays can alter housekeeping frequency, rate, and labor efficiency.
- Labor modelWages, staffing ratios, benefits, overtime, outsourced housekeeping, and management-company fees vary substantially by market.
- Property costsInsurance, property tax, utilities, repairs, and required renovations can differ by millions of dollars across hotel locations and ages.
- FinancingEBITDA is before interest and principal. A heavily financed hotel may distribute far less cash than an unlevered hotel with identical operations.
- Accounting definitionSTR’s EBITDA benchmark and an individual hotel’s P&L may classify franchise, management, reserve, and non-operating costs differently.
The underlying U.S. business classification is NAICS 721110, Hotels (except Casino Hotels) and Motels. Industry evidence should be matched to traveler accommodation rather than restaurant, retail, or service-franchise margins. Broader lodging conditions also remain cost-sensitive; the American Hotel & Lodging Association’s 2026 industry report emphasizes continuing pressure from operating expenses.
What should a prospective owner verify before relying on the range?
A buyer should replace the scenario assumptions with property-specific evidence before making an investment decision. The FDD permits a prospective franchisee to request written substantiation for Item 19, and the FTC recommends comparing the represented population with the intended location and operating model.
- Item 19 substantiationRequest the written support for 2025 RevPAR, occupancy, cohort definitions, exclusions, and New Generation data.
- Comparable franchisee P&LsAsk operators of similarly sized, similarly aged hotels for rooms revenue, total revenue, payroll, franchise fees, GOP, EBITDA, and capital reserves.
- Management-company economicsObtain the base fee, incentive fee, centralized-service charges, staffing obligations, and termination terms.
- Property-level fixed chargesModel insurance, property tax, utilities, licenses, repairs, FF&E reserves, and required renovations for the exact site.
- Financing scheduleSeparate interest and principal from operating earnings and test multiple leverage, rate, and amortization cases.
- Owner-role approvalConfirm in writing whether Hilton will approve direct owner management and which trained positions must remain on payroll.
What is the decision-useful earnings view?
The strongest defensible range is approximately $1.0 million–$1.9 million per year of manager-run hotel EBITDA proxy for a mature 131-suite property, with a $1.41 million base scenario. It is scenario-based, not an official Homewood Suites owner-income disclosure. The most important earnings driver is local RevPAR converted through the property’s actual labor and fixed-cost structure. The largest unresolved uncertainty is the absence of a Homewood-specific expense or profit statement in Item 19. Before relying on the range, a buyer should verify Item 19 substantiation, comparable franchisee P&Ls, management fees, capital reserves, financing, and owner-role requirements through written records and franchisee interviews.