The most profitable hotel franchises of 2024
The pandemic has finally receded, and travel is back to pre-2020 levels. With so many people opting to travel for business and recreation, the hotel industry is bouncing back from its long tenure of COVID-era disruptions. Many brands rose to the occasion, creating safe ways for guests to travel while maintaining social distance.
The revival of travel and hospitality means more opportunities than ever for investors looking for a hospitality-focused franchise business. Hotels offer many benefits of investment, and some brands shine above the rest in providing guests with clean, comfortable accommodations and amenities at every price point.
We’re excited to share information on the most profitable hotel franchises to consider for investment in 2024. These brands share features like excellent revenue, many property types, solid systems and technology, and brand recognition.
In this article, we cover:
- What makes a great hotel franchise?
- Benefits of a hotel business
- Top hotel franchises of 2024
What makes a great hotel franchise?
Looking for a hotel franchise partner is kind of like looking for a hotel room: You need a great brand in the right place at the right price point. When researching hotel franchise opportunities, look for the following key elements of a successful business model:
Brand recognition: Whether sifting through options online or looking for a place to turn in while on a road trip, brand recognition is a powerful plus for hotel chains. Many seasoned travelers stay within the same family of hotels to take advantage of loyalty perks and discounts, so building a franchise with a recognizable brand may improve your repeat business and create dependable revenue from loyalty members.
Sales and marketing systems: Successful hotels depend on systematization for booking, check-in, on-site care and maintenance, and rewards programs. Look for a franchise partner that emphasizes and invests in up-to-date technology for booking, scheduling, customer service, and other features. These systems make it easier and more profitable to run a hotel franchise.
New expansion potential: While major travel hubs are spoiled for choice with hotel accommodations, locations a little farther off the beaten path are ripe for expansion and development. Look for a hotel chain that offers territory for future expansion in areas that appeal to travelers or business guests.
Demonstrated growth: Post-pandemic travel is approaching (and in some cases, surpassing) pre-COVID levels. All this renewed interest in travel means opportunities for growth within the hospitality industry. Look for a brand that managed pandemic disruptions successfully and whose numbers show potential for future growth.
Benefits of a hotel business
Owning a hotel within the right franchise network can help investors build stable revenue and long-term success. The hotel business offers benefits like steady, reliable revenue and the ability to specialize in a particular property type. There are many ways to invest in a hotel franchise and numerous benefits – no matter what type of hotel you choose to develop.
Consistent need in the right markets
Hotels in well-placed locations offer consistent revenue from business and leisure travelers. Depending on the location, your hotel might cater to one type of clientele or a mix of customer types. Choosing the right location for a hotel is important for attracting visitors, so consider the type of traveler your business will most likely attract.
Multiple revenue streams
Room stays are only one form of revenue for hotel franchises. Many hotels also accommodate special events, weddings, business conferences, and other services. Hotel owners can diversify the revenue streams of a property by offering these benefits. Weddings, for instance, offer the potential of tapping two income streams at once: event planning and execution of the event, as well as hotel room blocks for family members and guests of the couple.
Price point variety
Hotel properties within a single brand often provide different experiences and price points that attract a certain type of traveler. Options range from no-frills, clean, and quiet nightly stays for travelers passing through to opulent, attentive service at a luxury property. The type of hotel an investor builds depends on the geographic location, proximity to attractions or metropolitan areas, and local competition.
Most profitable hotel franchises of 2024
When choosing a franchise, it’s important to consider a potential franchise brand partner’s financial returns and reputation. Here are five factors to consider when evaluating your options:
Hilton
The Hilton brand of hotels offers property types from basic accommodations to luxury and boutique options. In the Hilton portfolio, you’ll find economy properties like Hampton Inn and Hilton Garden Inn; mid-range options like Tru and Embassy Suites; and high-end properties like The Tapestry Collection and flagship Hilton high-rises. Hilton’s loyalty program (Hilton Honors) offers discounts and premium perks for frequent guests.
Fast facts
Locations: 7,100+
Founded: 1919
Franchised: 2007
Start-up cost: $14M to $113M
Franchise fee: $105K
Marriott
The Marriott Hotel Group is one of the world’s largest hotel chains. It includes lower-priced properties such as SpringHill Suites and The Marriott Courtyard; mid-range properties such as the Sheraton; and luxury properties including the Westin and Le Méridien lines. For travelers who frequent Marriott properties and resorts, the Marriott Bonvoy loyalty program offers benefits similar to those in the Hilton Honors program.
Fast facts
- Locations: 8,700+
- Founded: 1927
- Franchised: 1968
- Start-up cost: $19M to $126M
- Franchise fee: $120K
Wyndham
Wyndham Hotels & Resorts is a franchise-friendly network of hotel properties offering one of the largest portfolios, including the Wyndham Garden, the Luxury Collection, Wingate, La Quinta, Howard Johnson, Super8, and Microtel Inn. The organization features 24 property brands in 93 countries and describes itself as the “largest hotel franchisor in the world.” Wyndham network owners can access the Wyndham Franchisee Association, an independent body that allows franchisees to communicate with the brand and effectively address any issues that come up.
Fast facts
- Locations: 9,200+
- Founded: 1981
- Franchised: 1996
- Start-up cost: $5M to $61M
- Franchise fee: $150K
Extended Stay America
With its all-suites offering, Extended Stay provides alternatives to traditional hotel stays. Its three brands (Suites, Premier Suites, and Select Suites) cater to guests who need temporary accommodations for a certain period of time. Though a smaller brand compared with others, Extended Stay is set to expand, providing ample opportunities for investors looking to move into hotel investment at a reasonable price point with potentially longer-term revenue per room. The franchise also offers an attractive lower franchise fee and investment than alternatives.
Fast facts
- Locations: 650+
- Founded: 1997
- Franchised: 2017
- Start-up cost: $10.5M
- Franchise fee: $50K
Choice Hotels
Choice Hotels offers economical, short-stay properties such as the Rodeway Inn, Comfort Inn, Clarion, and Econolodge brands, all of which focus on the needs of price-conscious business and leisure travelers. The amenities in these properties are well suited to travelers and families who need clean and quiet short-stay accommodations without extra frills or expenses. The group also offers higher price-point properties, including Cambria Hotels, Radisson, and Radisson Blu.
Fast facts
- Locations: 7,000+
- Founded: 1939
- Franchised: 1941
- Start-up cost: $372K to $32M
- Franchise fee: $10K to $60K
Passive franchise investing with FranShares
If you’re an investor who’d like to diversify by adding franchises to your portfolio, consider passive fractional franchise investing with FranShares. Our approach offers high earning potential and diversification in a completely passive investment model. We give both retail and accredited investors access to all the benefits of franchising with low initial capital outlay and zero fees.
To learn more about FranShares and this unique opportunity, sign up for our platform on our home page.
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