How Much Does It Cost to Open a Hotel Franchise?

It Cost to Open a Hotel Franchise

Owning a hotel franchise is one of the most ambitious and rewarding ventures in the U.S. franchise ecosystem. With the right location, brand, and operations, a hotel can deliver strong returns and long-term equity. In 2025, as travel continues to rebound globally, hotel franchises are once again attracting interest from investors, developers, and entrepreneurs alike.

The answer varies dramatically based on the brand (economy vs luxury), location, property type (new build vs conversion), and required amenities. In this comprehensive 3,000-word guide, we’ll break down:

Hotel industry trends in 2025
Hotel franchise categories
Startup cost breakdown
Top hotel brands and their franchise costs
Expected revenue and ROI benchmarks
Franchisee qualifications and approval process
Financing options for hotel investors
Risk factors and trends in hospitality
Brand comparison chart
Final insights for future hotel owners

1. Hotel Industry Trends (2025)

U.S. Market Size: $262 billion in 2025
Average Daily Rate (ADR): $156/night
Occupancy Rate: 63% (post-pandemic recovery)
RevPAR (Revenue Per Available Room): $98.28

Key Growth Drivers

Resurgence in business travel and events
Growth in boutique and extended-stay segments
Increasing demand for branded experiences
Hotel conversions and rebranding projects on the rise

2. Hotel Franchise Categories

Economy (e.g., Motel 6, Super 8)
Midscale (e.g., Comfort Inn, La Quinta)
Upper Midscale (e.g., Hampton Inn, Holiday Inn Express)
Upscale (e.g., Hilton Garden Inn, Courtyard by Marriott)
Luxury (e.g., JW Marriott, Waldorf Astoria)
Extended-Stay (e.g., Staybridge Suites, Home2 Suites)

3. Startup Cost Breakdown

Cost Category	Estimated Range
Franchise Fee	$30,000 – $100,000
Land Acquisition	$500,000 – $2M+
Construction/Build-Out	$5M – $25M+ (depends on size)
FF&E (Furnishings, etc.)	$2M – $10M
Pre-Opening Expenses	$200,000 – $500,000
Working Capital	$250,000 – $1M+
Technology & POS Systems	$100,000 – $300,000
Total Range	$8M – $30M+

Note: Smaller economy brands or conversions may start around $3M, while luxury new builds can exceed $50M.

4. Top Hotel Franchise Brands & Their Costs

1. Hilton Hotels & Resorts

Franchise Fee: $75,000 – $150,000
Total Investment: $14M – $28M (varies by brand)
Royalty: 5% of gross room revenue + 4% marketing
Brands: Hampton, Hilton Garden Inn, Homewood Suites, Tru by Hilton

2. Marriott International

Franchise Fee: $50,000 – $125,000
Total Investment: $12M – $25M+
Royalty: 5% + 3% marketing
Brands: Courtyard, Fairfield Inn, Residence Inn, Moxy

3. Choice Hotels

Franchise Fee: $25,000 – $60,000
Total Investment: $4M – $18M
Royalty: 5% + 2% marketing
Brands: Comfort Inn, Sleep Inn, Cambria, Quality Inn

4. Wyndham Hotels

Franchise Fee: $25,000 – $55,000
Total Investment: $3M – $15M
Royalty: 4.5% + 2% marketing
Brands: La Quinta, Days Inn, Super 8, Wyndham Garden

5. IHG Hotels & Resorts

Franchise Fee: $50,000 – $100,000
Total Investment: $6M – $20M+
Royalty: 5% + 3% marketing
Brands: Holiday Inn, Staybridge Suites, EVEN Hotels

5. Profitability & ROI Benchmarks

Brand	ADR	Occupancy	RevPAR	Net Margin	Breakeven
Hampton Inn	$145	67%	$97.15	18–25%	4–7 years
Holiday Inn Express	$135	65%	$87.75	15–22%	4–6 years
La Quinta	$115	63%	$72.45	14–20%	4–6 years
Comfort Suites	$125	64%	$80.00	16–22%	3–5 years
Courtyard Marriott	$160	69%	$110.40	20–28%	5–8 years

6. Franchisee Qualifications

Net Worth: $2M – $10M+
Liquid Assets: $750K – $2M+
Experience: Strong preference for multi-unit operators, developers, or hospitality professionals
Background Check: Required
Approval Time: 3–6 months

7. Financing Options

SBA 504 Loans: Ideal for real estate-heavy projects
CMBS Loans: Fixed-rate, non-recourse options for hotels
Private Equity Partners: Common in large-scale hotel deals
Franchisor Lenders: Some brands offer preferred lending relationships
Construction & Bridge Loans: For phased development

8. Risks & Trends in the Hotel Franchise Space

Risks:

High fixed costs and labor
Susceptibility to market downturns (travel bans, economic slowdowns)
Regulatory and zoning requirements

Trends:

Growth in extended-stay and select-service models
Emphasis on local experiences + loyalty integration
Smart hotels and tech-enabled check-ins
Brand conversions of independent properties

9. Hotel Franchise Comparison Table

Brand	Startup Cost	Franchise Fee	Royalty	Occupancy	Breakeven
Hilton (Tru, Hampton)	$12M – $28M	$75K – $150K	5% + 4%	65–70%	4–7 years
Marriott (Courtyard)	$12M – $25M	$50K – $125K	5% + 3%	65–70%	5–8 years
Choice (Comfort)	$4M – $18M	$25K – $60K	5% + 2%	60–65%	3–5 years
Wyndham (La Quinta)	$3M – $15M	$25K – $55K	4.5% + 2%	60–63%	4–6 years
IHG (Holiday Inn)	$6M – $20M	$50K – $100K	5% + 3%	64–66%	4–6 years

10. Final Thoughts

Opening a hotel franchise is a major investment—but it also offers recurring revenue, brand equity, and long-term appreciation potential. With dozens of strong brands across economy, midscale, and luxury tiers, there’s a model for nearly every qualified investor.

Before you choose a franchise: