For a modeled 100-suite U.S. Residence Inn by Marriott hotel, this is an independent estimate of manager-run, pre-tax operating owner earnings, with a base scenario of about $829,000. The 2026 Franchise Disclosure Document reports 2025 room-performance metrics—not owner profit—so the range is scenario-based rather than an official Item 19 earnings claim.
This estimate is an independent analytical scenario, not an Item 19 financial performance representation by MIF, L.L.C. It combines identified facts from the 2026 Residence Inn Franchise Disclosure Document with a separately identified hotel-sector margin benchmark and explicit modeling assumptions. Actual results can differ materially by location, suite count, room rates, occupancy, labor, insurance, utilities, property taxes, channel mix, financing, owner involvement, capital spending, and execution.
- Legal franchisor
- MIF, L.L.C., a Delaware limited liability company.
- Current disclosure
- 2026 Residence Inn Domestic Franchise Disclosure Document, issued March 31, 2026.
- Item 19 evidence
- 2025 ADR, occupancy, RevPAR, RevPAR Index, reservations, and loyalty metrics for defined mature franchised hotel cohorts; no owner profit, EBITDA, net income, cash flow, or owner compensation figure.
- Applicable population
- 752 STR Included Hotels in the United States and Canada that were franchised, had operated at least two years, reported STR data, and met stated renovation and expansion conditions.
- External benchmark
- January 2026 U.S. Hotel/Gaming pre-tax unadjusted operating margin from NYU Stern; May 2024 lodging-manager wage from the U.S. Bureau of Labor Statistics.
- Date checked
- July 15, 2026.
What does Residence Inn Item 19 actually measure?
Officially, Item 19 measures room performance, not owner earnings. For calendar 2025, the relevant mature franchised-hotel cohort had average RevPAR of $127.44 and median RevPAR of $117.11. The cohort includes hotels in the United States and Canada, so it is not a U.S.-only earnings sample.
RevPAR means gross room sales divided by available rooms. It combines room rate and occupancy into one operating metric, but it does not deduct payroll, housekeeping, breakfast, utilities, insurance, property taxes, franchise fees, channel commissions, management costs, financing, or capital expenditures. Calling RevPAR “income” would materially overstate what an owner keeps.
| Item 19 metric | Official 2025 result | Statistic | Defined population |
|---|---|---|---|
| Average Daily Room Rate (ADR) | $167.78 | Average | 752 STR Included Hotels |
| Occupancy Rate (OCC) | 76.0% | Average | 752 STR Included Hotels |
| Revenue per Available Room (RevPAR) | $127.44 | Average | 752 STR Included Hotels |
| Revenue per Available Room (RevPAR) | $117.11 | Median | 752 STR Included Hotels |
The FDD-reported RevPAR range was $41.06 to $363.44. That wide dispersion shows why one system average cannot establish what a specific U.S. property will earn. Market, age, renovation status, room count, competition, and operating efficiency remain decisive.
Item 19 central revenue anchor for 752 mature franchised hotels in the U.S. and Canada.
$117.11 × 100 suites × 365 days. This excludes ancillary hotel revenue.
January 2026 U.S. Hotel/Gaming pre-tax unadjusted operating margin; not Residence Inn-specific.
Pre-interest, pre-principal, and pre-personal-tax operating earnings proxy.
6.0% Franchise Fees plus 2.56% Program Services Contribution and $12,500 fixed for 100 suites.
About 91.7% of the 820 franchised hotels open at year-end 2025, subject to Item 19 eligibility rules.
How is the annual owner-earnings range calculated?
The range is estimated by converting median RevPAR into annual room sales for a 100-suite hotel, then applying three operating-margin assumptions. The revenue anchor is official 2025 Item 19 data; the suite count, revenue spread, and margin sensitivity are analytical assumptions.
Base room sales: $117.11 median RevPAR × 100 available suites × 365 days = $4,274,515.
Base earnings proxy: $4,274,515 × 19.39% pre-tax unadjusted operating margin = $828,828, rounded to $829,000.
- Revenue scenarios: 80%, 100%, and 120% of the derived $4.27 million central room-sales figure. The spread is analytical, not FDD-reported.
- Margin scenarios: 16.39%, 19.39%, and 22.39%, using the January 2026 NYU Stern Hotel/Gaming benchmark with a minus/plus three-percentage-point sensitivity.
- Operating-cost treatment: Normal hotel operating expenses, manager payroll, and recurring franchise costs are assumed to be embedded in the all-in operating-margin proxy. FDD fees are not deducted again.
- Excluded from the result: Financing interest, loan principal, personal income taxes, owner distributions, and a property-specific FF&E reserve. Depreciation is embedded in the operating-margin benchmark.
- Revenue limitation: Item 19 supplies room revenue through RevPAR, not total hotel revenue. Ancillary revenue such as food, beverage, parking, or other charges is not modeled.
Estimated annual pre-tax operating owner earnings for a modeled 100-suite hotel.
Interpretation: Revenue and margin move together in this sensitivity model; the base column is a reference scenario, not a forecast or “most likely” result.
Source and method: Residence Inn 2026 FDD, Item 19, pp. 108–113; 100-suite editorial model; NYU Stern U.S. margins by sector, January 2026. Values rounded to the nearest $1,000.
The margin source covers public U.S. Hotel/Gaming companies, not franchised Residence Inn properties. Corporate scale, owned-versus-managed assets, gaming exposure, ancillary revenue, depreciation, and fee structures may differ materially from one extended-stay hotel. The proxy is useful for sensitivity analysis, not as proof of a Residence Inn margin.
How does owner involvement change the result?
Active involvement can add labor value, but it does not turn the property into passive income. Item 15 requires the franchisee to operate the hotel or retain an approved management company, and a trained general manager must directly supervise the business on premises full time. An owner can only replace that role if qualified and accepted under the franchise requirements.
The U.S. Bureau of Labor Statistics reported a May 2024 median annual wage of $68,130 for lodging managers. Adding that wage benchmark to residual operating profit produces an estimated owner-operator benefit, not pure business profit. It compensates the owner for full-time work and excludes bonuses, payroll taxes, benefits, and the potentially broader cost of a third-party management company.
The owner-operator values add $68,130 of lodging-manager labor value to each scenario.
Interpretation: The $68,130 increment is compensation for labor performed. It should not be described as passive profit, and it may be unavailable where an approved third-party management company is required.
Source and method: Residence Inn 2026 FDD, Item 15, pp. 97–98; U.S. Bureau of Labor Statistics, Lodging Managers, May 2024 wage data. Values rounded to the nearest $1,000.
Which franchise fees materially affect owner earnings?
The clearest recurring FDD burden is 6.0% of gross room sales plus a 2.56% Program Services Contribution and fixed annual charges. These are official 2026 Item 6 terms for the hotel format; variable loyalty, distribution, technology, sales, and optional-or-conditionally-required program costs can add more.
| Recurring obligation | Official Item 6 term | Model treatment |
|---|---|---|
| Franchise Fees | 6.0% of gross room sales | Assumed embedded in the all-in operating-margin proxy |
| Program Services Contribution | 2.56% of gross room sales, including 2.5% for the Marketing Fund | Assumed embedded; shown separately only to indicate scale |
| Program Services fixed component | $6,000 per year plus $65 per suite per year | $12,500 annually for the 100-suite model |
| Loyalty Program | 1.2% of qualifying revenue, reduced to 1.1% through December 2027, plus certain event charges | Not separately quantified because qualifying revenue is not disclosed for the modeled hotel |
| Revenue management and channel costs | Fixed, percentage, per-call, per-booking, or variable amounts depending on participation and channel | Not individually modeled; actual property mix must be verified |
At $4.27 million of modeled base room sales, the 6.0% Franchise Fees, 2.56% Program Services Contribution, and $12,500 fixed component total about $378,000 before loyalty and other variable charges. That amount illustrates fee scale; it is not subtracted again from the scenario earnings because the selected operating-margin proxy is treated as all-in.
What could move actual Residence Inn owner earnings outside this range?
The largest unresolved uncertainty is the property-specific operating margin. Item 19 provides a strong room-revenue anchor for a broad mature cohort, but it does not disclose payroll, departmental expenses, insurance, property taxes, management fees, FF&E reserves, debt costs, or bottom-line profitability for franchised hotels.
Revenue variation is also substantial. The 2025 STR Included Hotel RevPAR range was $41.06 to $363.44, and the Item 19 cohort combines U.S. and Canadian properties. A newly opened, recently renovated, urban, airport, suburban, or tertiary-market hotel may not resemble the median property.
- Request Item 19 substantiation: confirm the 2025 source data, hotel counts, exclusions, currency conversion, and whether a U.S.-only cut can be provided.
- Obtain comparable property P&Ls: separate room revenue, ancillary revenue, departmental expenses, undistributed operating expenses, fixed charges, management fees, franchise fees, and FF&E reserves.
- Interview current and former franchisees: ask about normalized GOP, operating profit, insurance, utilities, local wages, property taxes, channel commissions, renovation spending, and owner distributions.
- Verify the management structure: determine whether the buyer may serve as the trained general manager, must hire a full-time general manager, or must retain an approved management company.
- Model financing separately: interest and principal can materially reduce cash available to the owner even when hotel-level operating profit is positive.
- Keep personal taxes separate: entity structure, jurisdiction, depreciation, deductions, and owner circumstances prevent a reliable after-tax take-home estimate.
The strongest defensible annual range for a modeled 100-suite U.S. Residence Inn is $560,000 to $1.15 million in manager-run, pre-tax operating owner earnings, with a $829,000 base scenario. It is a Mode C independent estimate, not an official Item 19 profit result. An approved owner-operator who replaces a paid lodging manager may realize an estimated benefit of roughly $629,000 to $1.22 million, but about $68,000 of that range represents labor value rather than passive profit.
The most important earnings driver is the combination of RevPAR and the hotel’s true all-in operating margin. The largest unresolved uncertainty is that Residence Inn Item 19 does not publish franchised-property profit or expense statements. Before relying on the range, a buyer should reconcile Item 19 substantiation, property-level P&Ls, management requirements, recurring fees, capital reserves, financing, and franchisee interviews.