Hotel franchise accounting Accounting for Hilton franchisees. Royalty and program fee on gross rooms revenue, property by property.
Hilton franchise agreements charge a royalty and a program fee as percentages of gross rooms revenue, and the rates differ by brand and by agreement. Hampton Inns pay 6% plus a 4% program fee in one owner’s 2025 filing, while its Hilton Garden Inns pay 5.5% plus 4% to 4.3%. The books have to carry each property’s own rates, on the gross. Kite keeps those rules for Hilton operators.
Operators of this brand run their back office on Kite
What the Hilton agreement charges
| Fee | Amount | Charged on | When |
|---|---|---|---|
| Hampton Inn (2 properties) | 6.0% + 4.0%[1] | Royalty + program fee, gross room revenue | Per the agreement |
| Hilton Garden Inn (3 properties) | 5.5% + 4.0–4.3%[1] | Royalty + program fee, gross room revenue | Per the agreement |
| Embassy Suites (1 property) | 5.5% + 4.0%[1] | Royalty + program fee, gross room revenue | Per the agreement |
| Homewood Suites (2 properties) | 4.0% + 3.5–4.0%[1] | Royalty + program fee, gross room revenue | Per the agreement |
| Home2 Suites (2 properties) | 4.0–5.0% + 3.0–3.5%[1] | Royalty + program fee, gross room revenue | Per the agreement |
The rules that change the books
The rate belongs to the property
The same owner holds Home2 Suites agreements at 4.0% and 5.0% royalty, and Hilton Garden Inns at 4.0% and 4.3% program fee[1]. The rate is set by each agreement’s date and terms, so a portfolio cannot be run on one percentage.
Gross rooms revenue, as defined
The fees are specified percentages of the hotel’s gross room revenue[1]. What that includes — no-show and cancellation revenue, resort fees, the gross price of an OTA night — is in your license agreement’s definition, which is the one to quote beside every fee.
Where Hilton books go wrong
Fees on the net rate
A merchant-model OTA remits the net rate. Report that and the brand fees are short on every night it sold — a gap the brand’s revenue audit is designed to find.
Advance deposits booked as revenue
A deposit taken at booking is a liability until the guest stays. Booked as revenue, the month of the booking is overstated and the month of the stay is not.
Loyalty and reservation charges unmatched
Program, loyalty and reservation charges arrive on the brand’s monthly statement. Unmatched to the stays and bookings they claim, a charge on a cancelled reservation goes unnoticed.
Questions
Questions Hilton operators ask.
Do you reconcile OTA remittances?
Yes, from the statements the OTAs issue. Each remittance is matched to its deposit with the commission booked as its own expense, and the fee basis is whatever your license agreement defines, quoted beside the fee.
Do you handle occupancy tax?
It is accrued by property and jurisdiction from rooms revenue every month, so the return starts from a balance rather than a project. Filing it stays with you or your CPA.
Can we start with a few properties?
Yes. Two to five properties through one full month-end close, beside your current accountant, at the same price per property.
Sources
- [1]Chatham Lodging Trust annual report for 2025, note on franchise agreements (fees in force at 31 December 2025) — U.S. Securities and Exchange Commission · the franchisor’s or a filer’s own document
Start with a few properties.
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