Guide to Buying a Homewood Suites Franchise

If you have experience or success in the hotel industry, owning a Homewood Suites franchise might be a good investment. But before you dive in, there are several factors to consider when starting a franchise, including whether you can afford the initial investment and have the time to devote to the management of a hotel.

Homewood Suites is an American residential hotel chain featuring accommodations with full kitchens, separate living and sleeping areas, and other features.

Fransmart is the leading franchise development company for emerging brands and offers prospective franchisees the latest franchising information. This blog post provides an informative and complete guide to Homewood Suites — taken from their updated FDD — to decide if this is the right choice for you. You will learn about franchise fees and liquid capital requirements, how much profit you can make and more.

Highlights:

  • Homewood Suites was founded in 1988.
  • It focuses on providing extended-stay options for business and leisure travellers.
  • The company operates about 500 franchises in the United States and 23 outside the country.
  • The Homewood Suites by Hilton is a mid-scale hotel chain.
  • With a franchise fee of up to $75,000, Homewood Suites by Hilton has a total initial investment range of $12,337,700 to $25,972,000.

Financial Requirement to Buy Homewood Suites Franchise

Guide to buying homewood suites franchise

The financial requirements to buy a Homewood suites franchise will vary depending on the property prices of the location. It can easily cost upwards of $25,972,000

to buy a Homewood Suites franchise from Hilton Worldwide. The exact amount will depend on the size of the hotel.

  • Initial Franchise Fee —-$75,000
  • Initial Investment —-$12,337,700 to $25,972,000
  • Veteran Incentives —–Varies
  • Royalty Fee —–3.5-5.5%
  • Ad Royalty Fee ——3.5%
  • Term of Agreement ——-22 years
  • Is Franchise Term Renewable?——Yes

How much Profit can Homewood Suites franchise owners earn?

To calculate how much profit a hotel franchise owner can make, we divide the total revenue from all reservations by the number of room nights sold. The average occupancy rate for Homewood Suites is 80%, but room rates keep fluctuating. Due to seasonality in room rates, calculating an accurate approximation of average profit would require more in-depth analysis with monthly or quarterly data. Moreover, the Homewood Suites franchise owner profits are also influenced by labour costs, lease rates, hours worked, and other factors.

What do Existing Franchise Owners Have to Say About the Homewood Suites franchise?

“Hotel ownership can be rewarding, but it is also tricky. It requires financial investment and commitment, leaving many owners vulnerable to annual operating costs. “

“From Marriott and Hilton Homewood Suites to small locally-owned chains, hotel brands worldwide face a crisis. While their business models stayed the same, prices dropped by nearly 50 %, and occupancy rates remained low.”

“Homewood Suites is well known for its ability to deliver quality accommodations and excellent customer service.”

Is it a good decision to buy a Homewood Suites Franchise?

Like most industries, hotel franchising has been affected by the ubiquity of technology. With the increasing availability of apps, websites, social media pages, online booking engines, and other tools, hotel guests aren’t loyal to one hotel. This has caused occupancy rates and revenue to decline.

Alternative Franchises

The hotel industry is tough. There is a lot of competition, third-party reduced price booking and a slow post-pandemic recovery. For investors looking to build wealth through franchising, there are less expensive, easier options. Fransmart has a strong portfolio of emerging brands that offer franchisees top territories, low start-up costs compared to Homewood Suites and strong returns. If you’re interested in exploring if another avenue in franchising is a better fit for your financial goals, the brands below are a good place to start:

If you’re looking for expert guidance entering the franchise arena, Fransmart can help you find the ideal franchise for your goals.

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