What are hotel chain scales and classes?
Last updated: By Nate Solomon, Matthews Hotel Markets
Chain scales are price tiers for hotel brands: luxury, upper upscale, upscale, upper midscale, midscale and economy, with independent hotels grouped separately. STR has said it assigns them by grouping branded hotels on average room rates.[1] The tier matters: CBRE's midyear 2026 outlook has luxury RevPAR growing 5.2 percent this year and economy falling 0.6 percent.[5]
Key takeaways
- The six tiers, top to bottom: luxury, upper upscale, upscale, upper midscale, midscale, economy. Choice Hotels' fiscal 2025 10-K uses the same six to describe the industry.[3]
- The basis is price, not amenities. STR has said it groups branded hotels by average room rates and puts all independents in a separate category.[1]
- Class is the version that includes independents: an independent hotel gets a class based on its room rate relative to nearby chain hotels.[2]
- Select-service, focused service and full service are service labels, not chain scales. Marriott and Hilton each use their own tier names in their 10-Ks.[4][7]
- New supply is concentrated in two tiers. Upper midscale and upscale were 3,507 of the 5,975 projects in the U.S. pipeline at mid-2026, per Lodging Econometrics.[6]
What are the hotel chain scales?
The hotel chain scales are six price tiers for branded hotels, which run luxury, upper upscale, upscale, upper midscale, midscale and economy, plus a separate group for independent hotels.
The system belongs to STR, the benchmarking firm that is now part of CoStar. Nearly every lender, appraiser, broker and brand in the United States uses its vocabulary, which is why you will see the tiers in a 10-K, a construction pipeline report and a forecast without anyone stopping to define them. Choice Hotels' fiscal 2025 10-K lays the six tiers out in a table to describe the lodging industry.[3] Lodging Econometrics reports the construction pipeline by the same tiers.[6]
The names have changed over time. An STR guide from December 2008 lists seven scale groups: luxury, upper upscale, upscale, midscale with food and beverage, midscale without food and beverage, economy and independent.[2] The two midscale groups have since become upper midscale and midscale, which is the wording in current filings.[3]
How does STR decide which chain scale a brand belongs to?
STR decides a brand's chain scale by price: it has said it determines chain scales by grouping branded hotels based on average room rates.[1]
Two things follow from that. First, the scale is about what guests pay, not about what the hotel offers. A brand with no restaurant can sit above a brand with one if it commands a higher rate. Second, the scale attaches to the brand, so every hotel in the brand carries the same scale whether it is the best or the worst in the system. STR has also said that all independent, non-branded hotels are categorized in a single, separate chain scale category.[1]
The STR statement we cite is from 2009, and we could not open STR's current methodology page or its current brand list, which sit on CoStar's site. The documents we did read give no rate cutoffs between tiers, so we publish none.
What is the difference between chain scale and class?
Chain scale sorts brands, and class sorts every hotel, including independents, into the same six tiers.
STR's guide to its STAR report defines class as an industry categorization that includes chain-affiliated and independent hotels. The class for a chain-affiliated hotel is the same as its chain scale. An independent hotel is assigned a class based on its room rate, relative to that of the chain hotels in its geographic proximity.[2]
So a boutique independent that charges what the nearby upper-upscale flags charge is an upper-upscale class hotel, even though its chain scale is simply independent. This matters when you read a benchmarking report, because a hotel is compared against its market class as well as against its own comp set. The same STR guide says a competitive set must include at least three hotels other than the subject, with four preferred.[2]
Is select-service a chain scale?
No. Select-service, limited service, focused service, full service and extended stay describe what a hotel offers, while chain scale describes what it charges.
The two systems overlap but are not the same, and the brand companies do not use STR's names for their own portfolios. Marriott's 10-K for fiscal 2025 sorts its brands into luxury, premium, select and midscale, and puts Courtyard, Fairfield, Residence Inn, SpringHill Suites and TownePlace Suites in select.[4] Hilton's 10-K describes its brands by positioning: luxury, lifestyle, full service, focused service and all-suites.[7] Hilton's franchise disclosure describes Hampton as offering high quality at moderate prices.[8]
On this site, select-service means a rooms-focused branded hotel, which in practice sits in the upscale or upper midscale tier. The investment difference between the service models is covered at What is the difference between select-service and full-service hotel investment?.
Which hotel brands are in which chain scale?
STR's full brand-by-scale list is a licensed product that we do not reproduce, but public 10-K filings give examples for each tier.
Choice Hotels' fiscal 2025 10-K gives brand examples for every tier. It places Hampton by Hilton, Holiday Inn Express, Fairfield Inn and its own Comfort Inn in upper midscale. It places Courtyard, Hilton Garden Inn, Hyatt Place and its own Cambria Hotels in upscale, and Super 8, Motel 6, Red Roof Inn and its own Econo Lodge in economy.[3] Those are one franchisor's examples in an SEC filing. They are not STR's current list, and because the tier follows average rate, a brand's tier can change over time.
If you need the scale for a specific flag, the franchisor's development team or your STR report will state it. For an underwriting conversation it is usually enough to know the tier and the two on either side of it.
How are the chain scales performing in 2026?
In 2026 the top of the market is growing and the bottom is not, according to every public forecast we read.
CBRE's midyear 2026 outlook forecasts national RevPAR growth of 2.5 percent for the year, with luxury at 5.2 percent, midscale at 0.7 percent and economy at minus 0.6 percent.[5] CoStar and Tourism Economics made the same point in February 2026, when they said upper-tier segments were showing signs of demand recovery while select-service and economy hotels faced downward pressure on average daily rates.[9]
Company results show the distance between tiers in dollars. For 2025, Choice Hotels reported system RevPAR of $52.85, Apple Hospitality REIT reported $117.95 at its comparable select-service hotels, and Host Hotels & Resorts reported $229.24 at its comparable luxury and upper-upscale hotels.[3][10][11] Definitions of the metric are at What are RevPAR, ADR and occupancy, and what is a good number?, and the forecasts are compared at What is the outlook for hotels in 2026 and 2027?.
Which chain scales are getting the most new hotels?
Upper midscale and upscale are getting the most new hotels, with 2,225 and 1,282 projects in the U.S. pipeline at the end of the second quarter of 2026, according to Lodging Econometrics.[6]
The total pipeline was 5,975 projects with 703,001 rooms, so those two tiers were 59 percent of projects by our arithmetic. Upper midscale alone accounted for 214,027 rooms and upscale for 159,252. Upper upscale stood at 367 projects with 65,021 rooms and luxury at 103 projects with 25,496 rooms, which Lodging Econometrics called record highs for both.[6] The release was dated July 23, 2026.
For an owner of an upper midscale or upscale hotel, the pipeline is the competitor that has not opened yet. A new-build flag in your tier, in your submarket, affects both your RevPAR index and what a buyer will assume about it.
Why does chain scale matter for value and financing?
Chain scale matters because buyers and lenders use it as shorthand for how volatile a hotel's income is and how deep the pool of buyers and lenders will be.
Cap rates differ by segment within the same city. The Matthews Hotel Index for Q1 2026 shows stabilized select-service cap rates of 7.5 to 8.25 percent in Austin, against 7.0 to 8.0 percent for full-service and 6.5 to 7.75 percent for resort and lifestyle hotels.[12] Lenders sort the same way, though none publishes its terms by tier. For how the tier feeds a price, see What is a good cap rate for a hotel in 2026? and How much is my branded select-service hotel worth?. For the loan, see What do lenders require for a hotel loan?.
The hotel chain scales, how each is defined, and a dated public data point for each
| Tier | How it is defined | A public data point |
|---|---|---|
| Luxury | Highest average room rates among branded hotels[1] | CBRE forecasts 2026 RevPAR growth of 5.2%.[5] Pipeline: 103 projects, 25,496 rooms at Q2 2026[6] |
| Upper upscale | Second tier by average room rate[1] | Pipeline: 367 projects, 65,021 rooms at Q2 2026[6] |
| Upscale | Third tier by average room rate[1] | Pipeline: 1,282 projects, 159,252 rooms at Q2 2026[6] |
| Upper midscale | Fourth tier by average room rate[1] | Largest pipeline: 2,225 projects, 214,027 rooms at Q2 2026[6] |
| Midscale | Fifth tier by average room rate[1] | CBRE forecasts 2026 RevPAR growth of 0.7%[5] |
| Economy | Lowest average room rates among branded hotels[1] | CBRE forecasts 2026 RevPAR change of minus 0.6%[5] |
| Independent | All non-branded hotels, grouped separately.[1] Each gets a class from its rate relative to nearby chain hotels[2] | AHLA says 57% of U.S. hotels are franchised, so 43% are not[13] |
Worked example
Hypothetical: how an independent hotel ends up with a class
Hypothetical. The hotel, its rate and its neighbors are invented to show the logic. The documents we read give no rate cutoffs, so the dollar figures below are illustration only.
A 60-room independent inn in a downtown district runs an average rate of $182 for the year. It has no flag, so its chain scale is independent.[1]
Its class depends on the chain hotels near it.[2] Suppose the branded upscale hotels in the same area average $175 and the branded upper midscale hotels average $140.
The inn's $182 sits with the upscale group, so its class is upscale. In a benchmarking report it would be compared with upscale class hotels in its market and submarket, as well as with whatever competitive set its management selected, which needs at least three hotels besides the inn itself.[2]
Move the same inn to a resort town where upscale flags average $260 and its $182 would place it a tier or two lower. The building did not change. The neighbors did. That is the practical difference between a chain scale, which follows the brand everywhere, and a class, which is local.
Frequently asked
- What chain scale is a Hampton Inn?
- Upper midscale, according to the brand examples in Choice Hotels' fiscal 2025 10-K, which lists Hampton by Hilton alongside Holiday Inn Express, Fairfield Inn and Comfort Inn.[3] STR's own current list is licensed and we do not reproduce it.
- What is the difference between upscale and upper upscale?
- Average room rate. Both are STR tiers for branded hotels, and upper upscale is the higher-priced of the two.[1] Choice Hotels' 10-K gives Courtyard and Hilton Garden Inn as upscale examples and Marriott, Hilton, Hyatt and Sheraton as upper upscale examples.[3]
- Is chain scale based on amenities or star rating?
- Neither. STR has said it determines chain scales by grouping branded hotels based on average room rates.[1] Star and diamond ratings come from other organizations and measure different things.
- What chain scale is an independent hotel?
- Independent is its own chain scale category. For benchmarking, an independent hotel is also assigned a class based on its room rate relative to nearby chain hotels.[1][2]
- Which hotel segment is performing best in 2026?
- Luxury, in CBRE's midyear 2026 outlook: RevPAR growth of 5.2 percent against 2.5 percent nationally, with economy at minus 0.6 percent.[5]
Who wrote this
Hospitality Associate, Matthews Hotel Markets
Sources
- Luxury chain scale shows pricing disparity (June 19, 2009), which states how STR assigns chain scales · STR, republished by Hospitality Net · accessed September 18, 2026
- How to use the STAR report (PDF dated December 1, 2008): definitions of class, market scale and competitive set · STR, hosted by HSMAI · accessed September 18, 2026
- Choice Hotels International, Inc. Form 10-K for fiscal year 2025, Item 1, Business: The Lodging Industry · U.S. Securities and Exchange Commission, EDGAR · accessed September 18, 2026
- Marriott International, Inc. Form 10-K for fiscal year 2025 (filed February 10, 2026), Item 1, Business · U.S. Securities and Exchange Commission, EDGAR · accessed September 18, 2026
- U.S. Real Estate Market Outlook Midyear Review 2026, Hotels · CBRE · accessed September 18, 2026
- U.S. hotel construction pipeline, second quarter 2026 (July 23, 2026) · Lodging Econometrics · accessed September 18, 2026
- Hilton Worldwide Holdings Inc. Form 10-K for fiscal year 2025 (filed February 11, 2026), Item 1, Business · U.S. Securities and Exchange Commission, EDGAR · accessed September 18, 2026
- 2025 Hampton Franchise Disclosure Document (issued March 30, 2025), Items 5, 6, 15, 17 and 19 · Hilton Franchise Holding LLC · accessed September 18, 2026
- 2026 forecast shows modest RevPAR growth amid lingering industry headwinds (February 10, 2026) · Hotel Online, citing STR and Tourism Economics (CoStar Group) · accessed September 18, 2026
- Apple Hospitality REIT Reports Results of Operations for Fourth Quarter and Full Year 2025 (February 23, 2026) · Apple Hospitality REIT, Inc. · accessed September 18, 2026
- Host Hotels & Resorts, Inc. Reports Results for 2025 (February 18, 2026), consolidated statements of operations and comparable hotel results · Host Hotels & Resorts, Inc., via GlobeNewswire · accessed September 18, 2026
- Matthews Hotel Index, Q1 2026 · Matthews Hotel Markets (first-party) · accessed September 18, 2026
- Franchising: hotel franchising facts · American Hotel & Lodging Association · accessed September 18, 2026
Related
Other questions in this guide
Terms defined in the glossary
Matthews Hotel Markets publishes cap-rate ranges by segment in the Matthews Hotel Index, because the tier a hotel sits in changes its price.