ECONOMY STUDIOOn an average night in 2025, 37.7 of every 100 U.S. hotel rooms went unsold1. Yet Marriott collected $5,438 million in gross fee revenue that year2.
The explanation is that the name on the sign is rarely the owner. Marriott owns or leases less than one percent of its system2, and Hilton owns or leases 46 of its 9,158 hotels3.
Who owns the hotel
Hilton’s annual report counts 8,239 franchised and licensed properties, 873 managed hotels and only 46 in its ownership segment3. That is 0.5%, about 1 hotel in 200, owned or leased; the other 99.5% are franchised or managed for someone else4.
In a franchise, an investor builds the hotel and pays the brand for the name, the booking system and the points program. In a management deal, an owner pays the brand to run the place. Either way, the owner keeps the building and the debt3. Marriott counts 9,805 properties and 1,779,936 rooms in 145 countries, of which 7,644 properties are franchised, licensed or other2.
What the brand earns
Marriott’s gross fee revenue was $5,438 million in 2025, up from $5,170 million: franchise fees of $3,325 million, base management fees of $1,322 million and incentive management fees of $791 million2. Of every $100 of it, $61 is franchise fees, $24 is base management fees and $15 is incentive fees5.
A franchise fee is a share of room revenue, not profit. Marriott says its royalties typically range from four to seven percent of room revenues, plus up to four percent of food and beverage revenues at certain brands2.
Hilton works the same way: a royalty on monthly gross room revenue, plus program fees for marketing, reservations technology and quality assurance charged on the hotel’s sales3. A CBRE survey of 1,587 hotels, now old, found that franchise-related fees together took 7.2 percent of rooms revenue in 20166. Applied to the 2025 average room rate of $160.54, that is about $11 a night, an illustration rather than a measured 2025 figure7,8.
Only one fee follows profit. Marriott’s incentive fees were $791 million in 20252, a share of what managed hotels earn after costs2.
Empty rooms
The average U.S. hotel was 62.3% occupied in 2025, with an average daily rate of $160.54 and revenue per available room of $100.028. That is the owner’s report card. An empty room pays the brand nothing, but the brand never depends on one room: Marriott has over 10,000 properties9.
In Marriott’s second quarter of 2026, worldwide revenue per available room rose 3.4%, while gross fee revenue rose 13% to $1.58 billion and franchise fees rose 19% to about $1.02 billion9. The rooms did not get that much busier. Marriott attributes the rise in franchise fees to higher co-branded credit card fees, rooms growth and higher revenue per room9.
The credit card money
Marriott’s co-branded credit card fees were about $716 million in 2025, and the company expects them to rise about 35% in 2026, according to secondary summaries of its earnings calls10. Its finance chief said card payments account for more than half of the funding of the Bonvoy points program10.
Bonvoy passed 295 million members in the second quarter of 2026, and Hilton Honors had 243 million at the end of 202511. Marriott’s balance sheet carried a loyalty liability of $7,992 million at the end of 2025, the value of points members had earned and not yet used2.
A points stay is not free. The owner supplies the room, the staff and the utilities. In June 2026, the Wall Street Journal reported that 51 hotel owners representing nearly 1,000 Marriott hotels asked Marriott’s leadership for a larger share of the card income and clearer information on how points payments work12. InterContinental Hotels Group says its own new U.S. card agreements will significantly increase its fees too13.
What an owner keeps
Of every $100 a U.S. hotel took in during 2025, $65.20 went to run the hotel, leaving $34.80 of gross operating profit14. Fees, rent, property taxes, insurance and other ownership costs took $12.00 more, leaving $22.80 before the owner’s mortgage14.
The owner’s EBITDA margin slipped from 23.3% to 22.8% in 202515. Property taxes rose 2.4%, and insurance costs about double their 2019 level15.
That is why hotels write attrition clauses into group contracts. A group that books 200 room nights, must use at least 160 and uses 140 owes a fee for the 20-room shortfall: $2,700 at $150 a night and a 90% fee16. The Professional Convention Management Association says only about 40% of event registrants book inside the room block16. Many contracts include a resale credit that reduces the fee if the hotel sells those rooms to someone else16.
Another way to fill the day is day-use booking. Dayuse, which launched in 2010, says it sells rooms by the hour window at up to 70% less than the overnight price; that is the company’s own claim17.
Why owners sign anyway
Because the brand fills rooms. Marriott says members accounted for 75% of room nights in the U.S. and Canada at the end of 202511.
The brands also keep growing on other people’s buildings. Marriott’s pipeline holds about 629,000 rooms and Hilton’s holds 541,30018,19. More than one third of Marriott’s first-half signings were conversions of existing hotels18.
Hilton’s fee revenue rose 6.4% in the second quarter, and it added 21,600 net rooms19. In Marriott’s second quarter, revenue per room rose 5.0% in the U.S. and Canada9.
What changes for you
Behind one price sit four parties: the guest, the owner, the brand and the bank. The owner takes the risk, the brand takes a slice of every sale, and the bank pays the brand for your spending. None of it is secret; it is in the filings.
One rule is worth knowing. Since May 12, 2025, hotels and other short-term lodging must show the total price, including mandatory fees such as resort fees, up front. The rule does not ban any fee or set its amount20.
Marriott reports third-quarter results on November 2, 202621. Fee income, franchise fees and revenue per room are the lines that tell the story.
So the puzzle has an answer. Marriott owns or leases less than one percent of its system and still collected $5,438 million in fees2. The brand is paid on every sale and every swipe. The owner pays for every empty room.
