How much does a Homewood Suites franchise cost in 2026?
Last updated: By Nate Solomon, Matthews Hotel Markets
Hilton's 2026 Homewood Suites Franchise Disclosure Document, issued March 30, 2026, estimates $23,757,245 to $34,728,465 to open a newly built 131-suite hotel, excluding real estate. The application fee is $100,000. The monthly royalty on a new build or conversion is 3.5 percent of gross rooms revenue in year one, 4.5 percent in year two and 5.5 percent after that, and the program fee is 2.5 percent.[1]
Key takeaways
- Item 7 total: $23,757,245 to $34,728,465 for 131 suites, which is about $181,400 to $265,100 per suite by our arithmetic, before land.[1]
- The royalty steps up on a new development or conversion: 3.5 percent in year one, 4.5 percent in year two, 5.5 percent for the rest of the term. A change of ownership or re-licensing pays 5.5 percent from the start.[1]
- The monthly program fee is 2.5 percent of gross rooms revenue, and Hilton Honors is 1.7 percent of total eligible guest folio.[1]
- A buyer of an existing Homewood Suites pays a $200,000 change of ownership application fee and a $10,000 PIP fee.[1]
- The FDD is Hilton's document and its fees change every year. Get the current FDD from Hilton before relying on these figures.
What does a Homewood Suites franchise cost up front?
A $100,000 franchise application fee for a new build or a conversion, plus $400 for each guest room or suite over 150, under Item 5 of the 2026 Homewood Suites FDD.[1]
Item 5 (pp. 15-16) lists the other initial fees paid to Hilton or its affiliates. A change of ownership application is $200,000 and a re-licensing application is $100,000. The PIP fee, charged to prepare a property improvement plan for a conversion, change of ownership or re-licensing, is $10,000. The OnQ computer system costs $28,296 to $118,424 for hardware, software and installation, other start-up fees are $5,100, training program fees run $5,000 to $17,500, and the opening process services fee is $6,000.[1]
The application fee is refundable, less a $7,500 processing fee, if Hilton denies the application, if the applicant withdraws before approval, or if a change of ownership does not occur (Item 5, Note 1, p. 17).[1]
What are the Homewood Suites royalty and program fees?
On a new development or conversion the monthly royalty fee is 3.5 percent of gross rooms revenue in the first year of operation, 4.5 percent in the second year and 5.5 percent for the remainder of the term. On a change of ownership or re-licensing it is 5.5 percent.[1]
Item 6 (p. 20) sets the monthly program fee at 2.5 percent of gross rooms revenue. Both fees use gross rooms revenue as defined under the Uniform System of Accounts for the Lodging Industry, including loyalty redemption revenue, mandatory guest fees and guaranteed no-show revenue (Note 1, p. 30).[1] Hilton may change the program fee at any time, but the rate will not exceed the current rate plus 1 percent of gross rooms revenue over the term of the agreement (Note 2, p. 31).[1]
Other recurring charges sit on top. Hilton Honors is currently 1.7 percent of total eligible guest folio, waived for stays where the guest enrolls at the property (p. 24). The Hilton Advance fee is 1.35 percent of eligible digital direct revenue, capped at $30 per stay (p. 23).[1] OnQ connectivity is $400 to $600 per month and hardware and software maintenance is $1,321 to $2,714 per month (p. 20).[1] These charges apply to different bases, so they do not add into one percentage.
What does the Item 7 estimate cover, and what is it per suite?
Item 7 of the 2026 Homewood Suites FDD totals $23,757,245 to $34,728,465 for a newly built 131-suite hotel, excluding real estate.[1]
Divided by 131 suites, that is about $181,400 to $265,100 per suite. The division is ours. The FDD does not print a per-suite figure.[1] Construction and leasehold improvements are the largest line at $16,900,000 to $24,500,000, and furniture, fixtures and equipment are $2,480,000 to $3,600,000 (pp. 34-36).[1] The cover page adds that up to $261,924 of the total is paid to Hilton or its affiliates.[1]
Read the exclusions. Item 7 states in capitals that the figures do not include real estate costs, market studies, insurance or interest, and do not separately identify the cost of improvements under a conversion, re-licensing or change of ownership license (p. 36).[1] A buyer of an existing Homewood Suites should expect a PIP scope from Hilton, not an Item 7 number. Per-room pricing is defined at price per key.
What does Hilton report about Homewood Suites performance?
Item 19 of the 2026 Homewood Suites FDD reports a 2025 average room rate of $160.14, average occupancy of 78.9 percent and average RevPAR of $126.35 across 417 comparable U.S. hotels.[1]
Comparable hotels are those open since January 1 of the previous year, excluding hotels that changed brand or ownership type, had large-scale capital projects, or lack comparable results. Of 538 U.S. Homewood Suites hotels at December 31, 2025, 417 were comparable, and 411 of those were franchisee-managed (p. 78).[1] Medians were a $150.02 room rate, 79.3 percent occupancy and $119.27 RevPAR. The ranges were $78.01 to $313.38 for room rate, 40.1 to 96.3 percent for occupancy and $40.53 to $298.02 for RevPAR. Of franchisee-managed hotels, 155, or 37.7 percent, met or exceeded the average RevPAR (pp. 78-79).[1]
The average RevPAR index was 123.8 and the median 124.1, with a range from 76.5 to 227.2, where 100 is a fair share of the competitive set. Hilton cites STR and Hilton as the source (p. 80).[1] Hilton Honors members accounted for an average 81.2 percent of occupied room nights, with a range from 39.2 to 97.7 percent (pp. 80-81).[1] For the 90 comparable hotels opened during or after 2018, the averages were a $166.83 room rate, 79.7 percent occupancy and $132.96 RevPAR (pp. 81-83).[1]
Item 19 reports revenue measures only. It gives no expenses, no profit and no return on investment, and none can be derived from it. Hilton writes: "Some hotels have achieved the results shown above. Your individual results may differ. There is no assurance that your Hotel will achieve the results shown above" (p. 84).[1] The measures are defined at RevPAR and MPI, ARI and RGI.
What does the Homewood Suites FDD say about extended stays?
Item 19 defines an extended stay as a completed guest stay of 5 or more consecutive nights and reports that Homewood Suites had about 6.6 million extended stay nights in 2025, about 48 percent of all consumed room nights.[1]
For comparable hotels in 2025, the average room rate on extended stays was $147.89 and the median was $142.47, with a range from $55 to $706 (p. 83).[1] Extended Stay Per Available Room, which Hilton abbreviates ESPAR, measures the percentage of available guest rooms occupied by extended stays. The average was 38.3 percent and the median 37.6 percent, with a range from 12 to 87 percent (p. 84).[1]
The average length of an extended stay was 13.1 nights and the median 11.7 nights. Extended stays ranged from 6 to 86 nights (p. 84).[1] The same caveat applies: these are results some hotels achieved, with no assurance for any other hotel.[1]
How long is a Homewood Suites franchise agreement, and can I renew it?
Hilton's 2026 Homewood Suites FDD sets the term at generally 22 years from the effective date for new construction and 10 to 20 years from opening for a conversion, with no right to renew.[1]
Item 17 of the 2026 Homewood Suites FDD (p. 69) states that on a change of ownership the term is generally the remaining term under the existing franchise agreement, or another term Hilton approves.[1] The franchisee does not have the right to renew or extend. If Hilton agrees, in its sole discretion, to re-license the hotel, the owner may be asked to sign a contract with materially different terms and must meet any PIP conditions Hilton sets.[1] The re-licensing application fee is $100,000 (Item 6, p. 26).[1]
The franchisee is not authorized to terminate before the term expires. Item 17 treats a unilateral termination without cause as a material breach, and liquidated damages become payable on demand.[1] The contract itself is defined at franchise agreement.
What happens to the Homewood Suites franchise when the hotel is sold?
A sale that changes control of a Homewood Suites is a change of ownership transfer: the seller gives Hilton 60 days' written notice and the buyer applies for a new franchise.[1]
Item 17 of the 2026 Homewood Suites FDD (p. 74) requires the buyer to meet Hilton's then-current requirements for new franchisees, including credit, a background investigation and operations experience. The buyer submits a change of ownership application, pays the franchise application fee ($200,000), signs the then-current form of franchise agreement and agrees to Hilton's requested upgrades, which may include a PIP fee.[1] The seller must not be in default and must pay all amounts due through closing. If the buyer has SBA financing, buyer and seller must agree to escrow Hilton's estimated fees and disburse them at closing.[1]
Permitted transfers are those that do not change control. Transfers of publicly traded equity, and of privately held equity where the transferee holds less than 50 percent afterward, need no notice or consent. Transfers to affiliates, to a family member or trust, or on death need 60 days' written notice, Hilton's consent and a $5,500 processing fee.[1] An owner may mortgage the hotel to a lender that finances its acquisition, development or operation without Hilton's consent if the owner is the sole borrower and the loan is not secured by other hotels or other collateral. A lender comfort letter costs $3,500 (Item 6, p. 26).[1]
Hilton-family hotels on the market are listed at Hilton hotels for sale. The buyer's checklist is at What due diligence do I need before buying a hotel?.
What does it cost to leave Homewood Suites before the term ends?
Hilton's liquidated damages for a Homewood Suites that has been open more than two years are the hotel's average monthly royalty fees multiplied by 60, or by the months remaining in the final 60 months of the term.[1]
Item 6 of the 2026 Homewood Suites FDD (p. 27) sets four cases for a termination by Hilton. Before opening: the system's average monthly royalty fees multiplied by 60. From opening to the second anniversary: the greater of the hotel's average monthly royalty fees multiplied by 60, or the system's average monthly royalty fees multiplied by 60. After the second anniversary and before the final 60 months of the term: the hotel's average monthly royalty fees multiplied by 60. Within the final 60 months: the hotel's average monthly royalty fees multiplied by the number of months remaining.[1]
Note 8 to Item 6 (p. 33) defines the hotel's average as the royalty fees due for the 24 months before the month of termination, divided by 24. The system's average is the average monthly royalty per guest room owed by U.S. Homewood Suites hotels over the prior 12 full calendar months, multiplied by the hotel's approved guest rooms. Fee discounts, ramps and waivers are excluded from the calculation.[1] Opening without Hilton's written authorization costs $5,000 per day.[1] Item 6 states that the monthly royalty fee and liquidated damages are the only fees in the item that are not subject to change.[1]
Does Hilton offer key money on a Homewood Suites?
Hilton may, in its sole discretion, offer a development incentive on a Homewood Suites, and the 2026 FDD calls it a contingent liability, not a loan.[1]
Item 10 of the 2026 Homewood Suites FDD (p. 44) describes an incentive as a financial contribution toward the development or conversion of the hotel, documented by a development incentive note signed with the franchise agreement. It bears no interest and does not have to be repaid unless the franchise terminates before the end of the term or a transfer occurs. The repayable amount falls by an equal share for each year the hotel is open: one-twentieth a year on a 20-year term, in Hilton's example.[1] On a sale, the seller pays the then-current repayable amount unless Hilton permits the buyer to assume the note.[1] The FDD does not publish incentive amounts, and the program can be changed or ended at any time. The term is defined at key money.
How do owners finance Homewood Suites franchise fees, a PIP or a conversion?
Inside the acquisition or construction loan when the costs are part of a purchase or a build, or with a separate renovation loan when they are not.
Lenders size the loan to the hotel's income, and no lender type publishes its leverage limits or spreads. As of September 17, 2026, Prime is 7.00 percent, SOFR is 3.85 percent and the SBA 7(a) maximum allowable rate is 10.00 percent.[2] Item 7 of the Homewood Suites FDD notes that many lenders will require an environmental assessment report.[1] The loan structures are at How do I finance converting my hotel to a new brand? and How do I finance a hotel PIP or renovation?. The wider trade between a flag and independence is at Should I buy a branded or independent hotel?, and the upgrade list itself is defined at PIP.
Whose numbers are these, and how current are they?
Every figure on this page comes from Hilton's 2026 Homewood Suites Franchise Disclosure Document, issued March 30, 2026. It is the franchisor's document, not ours.[1]
The FDD is written by the franchisor, Hilton Franchise Holding LLC, and a prospective franchisee must receive it at least 14 calendar days before signing a binding agreement or paying anything.[1] Hilton reissues it every year and marks most fees "currently", which means they can change. Hilton also reports that it negotiates. It agreed to modify the monthly royalty fee in 47 instances and the monthly program fee in 3 instances during 2025 (Item 6, p. 31), and in 2025 franchisees paid application fees from $0 to $100,000 for new construction or conversion, $20,000 to $200,000 for a change of ownership and $0 to $100,000 for re-licensing (Item 5, p. 17).[1]
Get the current FDD from Hilton, and read the franchise agreement attached to it, before you rely on any number here. This page is a neutral fee guide. It does not rank brands or recommend one. The document type is explained at franchise disclosure document, and the other brand guides are listed at How much does a hotel franchise cost?.
Homewood Suites by Hilton franchise fees, 2026 FDD issued March 30, 2026 (Items 5, 6 and 7)
| Fee | Amount | Where in the FDD |
|---|---|---|
| Application fee, new development or conversion | $100,000 plus $400 per guest room or suite over 150[1] | Item 5, p. 15 |
| Application fee, change of ownership | $200,000[1] | Item 5, p. 15 |
| Application fee, re-licensing | $100,000[1] | Item 5, p. 15 |
| PIP fee | $10,000[1] | Item 5, p. 15 |
| OnQ system: hardware, software, installation | $28,296 to $118,424[1] | Item 5, p. 16 |
| Monthly royalty fee, new development or conversion | 3.5% of gross rooms revenue in year 1, 4.5% in year 2, 5.5% after[1] | Item 6, p. 20 |
| Monthly royalty fee, change of ownership or re-licensing | 5.5% of gross rooms revenue[1] | Item 6, p. 20 |
| Monthly program fee | 2.5% of gross rooms revenue. May change, capped at the current rate plus 1%[1] | Item 6, pp. 20 and 31 |
| Hilton Honors | 1.7% of total eligible guest folio[1] | Item 6, p. 24 |
| Hilton Advance fee | 1.35% of eligible digital direct revenue, up to $30 per stay[1] | Item 6, p. 23 |
| OnQ connectivity, and hardware and software maintenance | $400 to $600 and $1,321 to $2,714 per month[1] | Item 6, p. 20 |
| Permitted transfer processing fee | $5,500[1] | Item 6, p. 26 |
| Lender comfort letter | $3,500, and $1,500 for an assignment[1] | Item 6, p. 26 |
| Liquidated damages, after year 2 | Hotel's average monthly royalty fees x 60, or x months remaining in the final 60 months[1] | Item 6, pp. 27-28 |
| Estimated initial investment, 131 suites | $23,757,245 to $34,728,465, excluding real estate[1] | Item 7, p. 36 |
Worked example
Hypothetical: Homewood Suites brand fees on assumed rooms revenue, by year
Hypothetical. Assume a Homewood Suites earns $3,000,000 of gross rooms revenue in each year, and that $1,200,000 of guest folios are eligible Hilton Honors folios. Both figures are assumptions chosen for round arithmetic. They are not forecasts and they are not from the FDD. A new hotel's revenue would not be flat, so read this as a rate illustration only.
New development or conversion, year one: royalty at 3.5 percent is $105,000 and program fee at 2.5 percent is $75,000, together $180,000.[1]
Year two: royalty at 4.5 percent is $135,000, plus $75,000, together $210,000.[1]
Year three onward, and any change of ownership or re-licensing: royalty at 5.5 percent is $165,000, plus $75,000, together $240,000.[1]
Hilton Honors at 1.7 percent of eligible folio adds $1,200,000 x 0.017 = $20,400, and OnQ connectivity plus hardware and software maintenance add $20,652 to $39,768 a year.[1] At the 5.5 percent royalty, these four lines total $281,052 to $300,168. Hilton Advance fees, reservation charges, commissions and training are extra. The example shows fees only. It says nothing about profit.
Frequently asked
- What is the Homewood Suites royalty fee?
- Under the 2026 FDD, a new development or conversion pays 3.5 percent of gross rooms revenue in year one, 4.5 percent in year two and 5.5 percent after. A change of ownership or re-licensing pays 5.5 percent. The program fee is 2.5 percent.[1]
- How much does it cost to build a Homewood Suites?
- Hilton's 2026 FDD, issued March 30, 2026, estimates $23,757,245 to $34,728,465 for a newly built 131-suite hotel, excluding real estate, market studies, insurance and interest. Up to $261,924 of that is paid to Hilton or its affiliates.[1]
- I'm buying an existing Homewood Suites. Do I get the lower starting royalty?
- No. The stepped royalty applies to new development and conversion. Item 6 lists 5.5 percent for a change of ownership, plus a $200,000 application fee and a $10,000 PIP fee. In 2025 buyers paid application fees of $20,000 to $200,000.[1]
- How long does a Homewood Suites franchise last?
- Generally 22 years from the effective date for new construction and 10 to 20 years from opening for a conversion. A buyer generally takes the remaining term or another term Hilton approves. There is no right to renew.[1]
- How much does a Homewood Suites owner make?
- The FDD does not say. Item 19 reports room rate, occupancy, RevPAR, RevPAR index, Hilton Honors contribution and extended-stay measures for comparable hotels. It reports no expenses or profit, and Hilton states there is no assurance any hotel will achieve the results shown.[1]
- How much of Homewood Suites business is extended stay?
- Hilton reports about 6.6 million extended stay nights in 2025, about 48 percent of all consumed room nights, counting stays of 5 or more consecutive nights. The average extended stay at comparable hotels was 13.1 nights.[1]
- What does it cost to terminate a Homewood Suites franchise early?
- After the second anniversary of opening, liquidated damages are the hotel's average monthly royalty fees multiplied by 60, or by the months remaining in the final 60 months. Fee ramps are excluded when the average is calculated.[1]
Who wrote this
Hospitality Associate, Matthews Hotel Markets
(512) 839-6999nate.solomon@matthews.comLinkedIn
Reviewed by Luke Thompson, VP & Director, Capital Markets.
Sources
- 2026 Homewood Suites by Hilton Franchise Disclosure Document (issued March 30, 2026): cover page; Item 5, pp. 15-19; Item 6, pp. 20-34; Item 7, pp. 34-38; Item 10, pp. 44-45; Item 17, pp. 68-77; Item 19, pp. 78-85 · Hilton Franchise Holding LLC · accessed September 18, 2026
- Matthews Hotel Markets September 2026 rate sheet · Matthews Hotel Markets · accessed September 18, 2026
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Terms defined in the glossary
Our own data
Matthews Hotel Markets sells and finances franchised hotels, so we read these disclosure documents alongside owners and buyers.