That is an independent, pre-tax scenario range for one illustrative 180-room U.S. Radisson hotel, with a base case near $1.10 million. It is not an earnings figure reported by Choice Hotels International, Inc. Radisson's 2026 Franchise Disclosure Document reports hotel demand and room-revenue metrics—not net income, EBITDA, owner compensation, or distributions.
Evidence status
Official revenue evidence; estimated earnings
Why confidence is limited
The FDD does not disclose room count by sample hotel, total revenue, operating expenses, management-company fees, EBITDA, debt, or owner distributions. A broad U.S. hotel profitability benchmark therefore carries substantial format and accounting uncertainty.
Median RevPAR
OFFICIAL — 2025 franchised Performance Sample; revenue per available room, not owner earnings.
Franchised sample coverage
OFFICIAL — 39 eligible hotels, equal to 97.5% of year-end franchised U.S. outlets.
Core GRR fees
OFFICIAL — royalty plus Marketing and Reservation Fee; channel and loyalty charges can add more.
Planning format
SCENARIO — Item 7's stated hotel size; Item 19 does not say its sample hotels had 180 rooms.
Base EBITDA proxy
DERIVED BENCHMARK — 2024 U.S. hotel EBITDA PAR divided by TRevPAR from CoStar/STR.
Year-end franchised outlets
OFFICIAL — down from 46 at the start of 2025; Item 20 reports two openings and eight ceased/other exits.
Item 19 evidence
What does Radisson's FDD actually say about owner earnings?
It does not report owner earnings. The official 2025 Performance Sample reports Average Occupancy Rate, Average Daily Rate, Revenue per Available Room, Total Choice Proprietary Contribution, Choice Privileges Contribution, and Choice Privileges Average Daily Rate for 39 franchised U.S. hotels. The FDD expressly says the tables omit costs of sales, operating expenses, and other costs needed to determine net income or profit. This is official revenue evidence, not a profit disclosure. Source: 2026 Radisson FDD, Item 19, pp. 69–72.
How wide was the official 2025 RevPAR range?
The median and average were nearly identical, but the low-to-high spread was substantial across the 39-hotel franchised sample.
Interpretation: the central measures were stable, but individual hotel performance varied dramatically. A single system average should not be treated as a typical property's guaranteed result.
Source: 2026 Radisson FDD, Item 19, Table 1, pp. 70–72. Values are official RevPAR measures for the 2025 franchised Performance Sample.
How representative is the Item 19 sample?
The sample is broad but not universal. It includes 39 of the 40 franchised U.S. Radisson hotels open at year-end 2025. Eligible hotels had to be operating by January 1, 2025. The FDD excluded hotels repositioned from another Choice brand during 2025, hotels missing at least 30 days of performance data, and hotels with an operating interruption longer than 30 consecutive days. Six company-owned or company-managed hotels were not part of the franchised sample. Source: 2026 Radisson FDD, Item 19, pp. 69–70.
Scenario model
How is the $700,000 to $1.57 million earnings range calculated?
The range is estimated, not official. It converts the FDD's 2025 median RevPAR into annual room revenue for an illustrative 180-room hotel, estimates total hotel revenue using a current U.S. hotel revenue relationship, applies an all-in EBITDA sensitivity, and then deducts the FDD-required replacement reserve. All calculations are annual and per hotel.
Model assumptions and formula
- Revenue anchor: $58.68 median RevPAR from the 2026 Radisson FDD, with an analytical 80% / 100% / 120% spread because Item 19 provides no quartiles.
- Room count: 180 rooms, matching the format used in Item 7's investment estimate. This is not the disclosed average room count of Item 19 hotels.
- Total-revenue factor: 1.2797 times room revenue, derived from Actabl's 2025 U.S. all-hotel TRevPAR of $151.34 divided by RevPAR of $118.26.
- EBITDA sensitivity: 21.7%, 24.7%, and 27.7%. The center is derived from CoStar/STR's 2024 U.S. EBITDA PAR of $51.88 divided by TRevPAR of $209.67; the lower and upper cases are explicit minus/plus 3-percentage-point assumptions.
- Replacement reserve: 5.0%, 3.25%, and 1.5% of Gross Room Revenues, within the FDD-required 1.5%–5.0% range.
- Formula: estimated owner earnings = estimated total hotel revenue × EBITDA margin − replacement reserve.
| Scenario | RevPAR anchor | Estimated total revenue | Estimated pre-tax owner earnings |
|---|---|---|---|
|
Conservative 80% of median; 21.7% margin; 5% reserve |
$46.94 | $3.95 million | $704,000 |
|
Base Median; 24.7% margin; 3.25% reserve |
$58.68 | $4.93 million | $1.10 million |
|
Upside 120% of median; 27.7% margin; 1.5% reserve |
$70.42 | $5.92 million | $1.57 million |
Estimated annual owner earnings by scenario
Pre-tax, before financing interest and principal, and after the modeled replacement reserve.
Interpretation: revenue performance and operating margin compound. A 20% change in the RevPAR anchor combined with a 3-point margin change produces a much wider earnings spread than either variable alone.
Sources and calculation: 2026 Radisson FDD, Items 6, 8, and 19; Actabl's full-year 2025 U.S. hotel analysis; CoStar/STR's 2024 U.S. hotel profitability release. Figures are rounded after calculation.
What is included—and excluded—from the earnings figure?
The scenario is a pre-tax operating estimate before debt service. It is intended to approximate cash capacity after normal hotel operating costs, management costs, recurring franchise charges, and the modeled replacement reserve. It excludes financing interest and principal, personal income taxes, depreciation, amortization, acquisition price, startup investment, and capital expenditures above the reserve. It also excludes any owner salary or labor-value add-on.
Terms that should not be collapsed
- RevPAR
- Gross room revenue divided by available rooms. It is a revenue-efficiency metric, not profit.
- EBITDA proxy
- An external U.S. hotel profitability benchmark before interest, income tax, depreciation, and amortization; it is not a Radisson result.
- Estimated pre-tax owner earnings
- The modeled EBITDA proxy after the required replacement reserve, before debt service and personal taxes.
- Owner distribution
- Cash actually paid to an owner after the property's financing, liquidity, capital needs, and ownership decisions. The FDD does not disclose it.
Owner role
Can an active owner increase earnings by replacing the general manager?
Not under a conventional owner-operator assumption. The FDD does not require the owner to participate personally, but it requires an approved hotel management company, a certified General Manager who does not manage another hotel, a full-time on-site Director of Sales, and a full-time Director of Food and Beverage. Radisson also identifies a broader minimum management structure. For that reason, this analysis does not add a manager's wage to earnings or present an “owner-operator benefit.” Source: 2026 Radisson FDD, Items 8 and 15, pp. 44–45 and 66–67.
Does “manager-run” mean passive income?
No. A management company and dedicated hotel leadership can handle daily operations, but ownership retains capital, contract, financing, compliance, insurance, reserve, and performance risk. The earnings range is not a passive-income forecast, and it does not compensate the owner for time spent supervising the asset.
Uncertainty
What could move actual earnings outside the modeled range?
Local demand and the below-the-line cost structure are the largest drivers. Item 19's official RevPAR ranged from $9.19 to $154.60, so location, property condition, market position, room count, rate strategy, guest satisfaction, and operating interruptions can overwhelm a national margin benchmark.
| Variable | Why it matters | What the FDD provides | What remains unknown |
|---|---|---|---|
| Demand and rate | Directly determine room revenue and operating leverage. | 2025 occupancy, ADR, and RevPAR distribution. | Future local market performance and target-property history. |
| Ancillary revenue | Food, beverage, meetings, parking, and other departments affect total revenue and margin. | Full-service operating requirements and GRR definition. | Sample hotels' F&B and other revenue mix. |
| Brand and channel costs | Loyalty, travel-agent, GDS, digital distribution, and program charges vary with booking mix. | Royalty, marketing, loyalty, reservation, technology, and program fee schedules. | Each hotel's actual channel mix and effective total burden. |
| Management and labor | Full-service staffing and management-company economics can materially alter EBITDA. | Required management company and leadership roles. | Contract fee, payroll structure, benefits, and local wage rates. |
| Property-level fixed costs | Property tax, insurance, utilities, rent, and repairs differ sharply by asset and market. | Insurance standards and replacement-reserve requirement. | Actual assessments, premiums, leases, and deferred maintenance. |
| Financing | Interest and principal can consume a large share of operating earnings. | Limited and variable financing descriptions in Item 10. | Acquisition price, equity, loan amount, rate, amortization, covenants, and refinance risk. |
How does Item 20 change the interpretation?
It adds system-population risk that the earnings table alone cannot show. Franchised U.S. Radisson outlets declined from 46 at the start of 2025 to 40 at year-end. Item 20 records two openings and eight outlets that ceased operating for “other reason,” with no reported 2025 terminations, non-renewals, or franchisor reacquisitions. The FDD does not establish why each hotel left or whether the exits were related to profitability. Prospective buyers should examine the former-franchisee list and the specific asset history. Source: 2026 Radisson FDD, Item 20, pp. 72–78.
Buyer verification
What should a buyer verify before relying on any earnings estimate?
Rebuild the estimate from property-level records. The FTC explains that gross sales do not reveal actual profit and recommends checking Item 19's data basis, requesting written substantiation, and interviewing current and former franchisees. Radisson's Item 19 says written substantiation will be provided after a written request.
Evidence to request and reconcile
- Item 19 written substantiation, including each hotel's room count and the exact calculations behind occupancy, ADR, RevPAR, and contribution measures.
- Three years of monthly property-level profit-and-loss statements mapped to the Uniform System of Accounts for the Lodging Industry.
- Room, food-and-beverage, meeting, parking, and other revenue by department—not only Gross Room Revenues.
- Actual effective royalty, Marketing and Reservation, loyalty, travel-agent, GDS, OTA, technology, and other program charges.
- The approved management-company agreement, base and incentive fees, payroll allocation, and required leadership compensation.
- Replacement-reserve balance, property-improvement plan, deferred maintenance, insurance, property tax, utility, and capital-spending history.
- Debt terms modeled separately from operating earnings, including interest rate, amortization, maturity, covenants, and required capital contributions.
- Interviews with multiple current and former Radisson franchisees, including owners of hotels near the target market and former outlets listed in Item 20.
Decision synthesis
What is the strongest defensible earnings view?
For an illustrative 180-room U.S. Radisson hotel, the strongest defensible estimate is approximately $700,000 to $1.57 million in annual pre-tax owner earnings before debt service, with a base scenario near $1.10 million. It is a limited-confidence, FDD-anchored scenario—not an official Radisson profit claim. The most important driver is property-level RevPAR combined with operating-margin execution. The largest unresolved uncertainty is the target hotel's actual total-revenue mix and complete expense structure, especially management, labor, brand/channel charges, fixed costs, capital needs, and financing. A buyer should verify Item 19 substantiation, reconstruct the Uniform System of Accounts P&L, and test the result against current and former franchisee interviews before treating any range as decision-ready.