Hotel Ownership Models: Find Your Path to Higher Profit
Your choice of ownership is the biggest decision for your hotel. It decides how much control you have, how much money you need, and how you will make a profit.
This guide explains the main types of hotel ownership in simple words. We will also show how modern tools—like a good hotel booking system—help you make more money, whatever ownership model you use.
The Four Main Ways to Own a Hotel
Most hotels fit into one of these four structures. Each has good and bad points.
1. Franchised Hotels
You pay a big brand (like Marriott or Hilton) to use their name. You get their marketing, their booking system, and their loyal guests.
- Bad Side: High fees (initial and ongoing), must follow strict brand rules, less freedom.
- Good Side: Strong brand name, marketing help, proven systems, access to many guests.
2. Independent Hotels
You own the hotel and the brand. You are not part of any big chain. You have full freedom but must work harder to get guests.
- Bad Side: No help with marketing or bookings, harder to get guests, you are responsible for everything.
- Good Side: Full control, no brand fees to pay, you keep all the profit, can create a unique hotel.
3. Management Contract
You own the building, but you hire a professional company to manage the hotel for you. You are the investor; they are the operator.
- Bad Side: High management fees, you have less control over guest experience, goals may not always match.
- Good Side: Run by experts, you don’t need to manage day-to-day, often has performance bonuses.
4. Owner-Operator Model
You own the hotel and you also manage it yourself. This is common for small or boutique hotels.
- Bad Side: You need to be an expert in everything, it takes a lot of your time, hard to grow.
- Good Side: You make all decisions, close to your staff and guests, you save management fees.
Ownership vs. Management: The Bottom Line
The main question is: do you want to run the hotel yourself or have someone else do it?
The real key to making money is not just the model you pick. It is using the right tools to work smarter. Good technology helps every type of hotel owner make more money and understand their business better.
The Numbers Behind Hotel Ownership
Let's get real about what you're facing as a hotel owner in today's market:
- Franchise contracts represent a dominant 66.52% of the North America luxury hotels market in 2024, validating the asset-light expansion model.
- Loyalty programs have become massive drivers of direct bookings: Marriott Bonvoy (237M members), Hilton Honors (215M members), and Wyndham Rewards (110M members) - these programs help properties avoid OTA commissions of 15-25%.
- Startup costs vary dramatically: Hilton franchise investments range from $29 million to $112 million depending on brand and market, with initial franchise fees between $75,000 to $105,000, plus ongoing fees of 5% gross room revenue royalty and 4% marketing fee.
- Soft-branded inventory reached 101,452 rooms across 601 U.S. hotels in 2024, with luxury accounting for 8% of the total - and these properties enjoy higher EBITDA margins than unaffiliated independents while preserving their unique identity.
How Technology Increases Your Profit
No matter how you own your hotel, you make money by selling rooms. How well you manage this process decides your profit.
1. Your Booking Engine: Your Direct Sales Tool
Your website is your best sales channel. A strong booking engine like AxisRooms helps you:
- Save Money: Every direct booking saves you the high commission paid to sites like Booking.com.
- Build Your Brand: For independent hotels, this is your shop window.
- Get Direct Bookings: Offers guests a smooth, fast booking experience.
2. Your Channel Manager: Your Distribution Hub
Your channel manager is essential. It updates your room availability and prices on your website, on all OTAs (like Expedia), and other channels instantly.
- More Visibility: Makes your hotel available everywhere guests are looking.
- Smart Pricing: Lets you change prices on all sites at once.
- No Overbookings: Avoids the problem of selling the same room twice.
3. Your Revenue Management System (RMS): Your Smart Advisor
An RMS is better than using guesswork or spreadsheets. It looks at market demand, competitor prices, and past data to suggest the best prices for you.
- Better Decisions: Gives you clear reports on what is profitable. This is especially important for independent hotels to build a smart revenue strategy.
- Increases RevPAR: Helps you find the perfect price to maximize your revenue per room.
AxisRooms: One System for Every Owner
- For Owner-Operators: Let the system handle pricing and distribution. This saves you time so you can focus on your guests.
- For Owners with a Management Company: See clear data on how your hotel is performing. Have better conversations with your management company.
- For Independent Hotels: Get the same powerful technology as big chains. This helps you compete and build a strong revenue strategy.
- For Franchised Hotels: Get better data and control to improve your profits beyond the brand's basic systems.
Conclusion: Your Model + Good Tools = Success
Your choice of hotel ownership model sets up your business. But your long-term profit comes from using smart tools.
Today, technology is not a cost—it is your partner for making money. A system like AxisRooms, with strong PMS Integrations and a reliable Channel Manager, helps you get more direct bookings, manage your rates smarter, and see your true profit.
See how the right technology can increase your hotel's profit. Explore AxisRooms' solutions made for every hotel owner.
Simple Questions & Answers
Q1-Which ownership model makes the most money?
A-There is no single best model. Franchises have built-in demand but have high fees. Independents keep all profit but must find their own guests. The real profit comes from using good software to manage your rates and bookings efficiently, no matter which model you choose.
Q2- Is it too risky to be an independent hotel?
A-It can be riskier because you have to build your own name. But today, technology makes it easier. A good channel manager gets your rooms on all booking sites, and a booking engine helps you get direct bookings. This helps you compete and keep all your profit.
Q3- How do I know if my management company is doing a good job?
A-Your contract should link their success to your profit, not just your revenue. Ask for clear reports on your GOPPAR (your profit after all operating expenses). Good software gives you this data, so you can see the true performance of your hotel.