Residence Inn by Marriott

Residence Inn Franchise Formats Offered

The standard Residence Inn by Marriott hotel is 60 to 150 rooms and typically features these common amenities: complimentary buffet breakfast; nighttime social and networking activities; a pantry area selling food, beverages, and sundries (branded as "The Market"); meeting facilities; semi-private buffet area; guest laundry facilities; and guest storage. Residence Inn rooms are a mix of studios, 1-bedroom suites, and 2-bedroom suites. Suites are large, with delineated areas for rest, living, and eating.

Residence Inn Franchise Opportunities - History

The first Residence Inn was launched in 1975 by Jack DeBoer in Wichita, Kansas. At the time, DeBoer’s professional experience dealt with the development and management of apartment buildings, but when a dip in the market occurred, he decided to partner up with a hotel group to see if the hotel model could fit extended-stay guests. The first-of-its-kind model was a success, and in 1987 the Residence Inn brand was bought by Marriott, which changed the name to Residence Inn by Marriott. Since then, the brand's footprint has grown to more than 1,000 Residence Inns, and the brand is looking to expand in emerging markets like Africa and the Middle East.

What Does A Residence Inn Franchise Cost?

Initial Investment

The estimated initial investment required to build and open a Residence Inn hotel depends on the size of the desired property. It costs approximately $10.3 million to $22.5 million for an 80-110 suite Residence Inn franchise and approximately $14.7 million to $28.7 million for a 120-150 suite Residence Inn franchise.  These estimated investment ranges exclude the cost of procuring the underlying real estate and associated expenses.

Franchise Application Fees

Opening a new Residence Inn hotel or converting an existing hotel into the Residence Inn system requires an upfront application fee of $75,000 or $500 per suite (whichever is greater). The application fee for transferring ownership of an existing Residence Inn requires an application fee of $175,000 or $500 per suite (whichever is greater). The fees are typically refunded if these applications are not approved (less than $10,000 plus the franchisor's costs).

Ongoing Royalties and Program Contributions

Residence Inn hotel franchisees must pay an ongoing 6% monthly royalty fee on gross room sales. Franchisees must also contribute 2.5% of monthly gross room sales to the franchisor's marketing fund. In addition, they must pay a monthly program services fee equal to 0.05% - 0.56% of gross room sales, plus a flat $6,000 - $7,200 per year, and another $90- $108 per suite per year. 

Residence Inn Franchise System Size and Composition

There are over 1,000 Residence Inn franchises, including approximately 800 in operation (constituting nearly 100,000 open rooms) and another 250 or so in development (accounting for over 30,000 rooms). Some 85% of the locations are franchised and the vast majority are based in the United States. The chain produces an estimated $3.9 billion in total sales.

Residence Inn is one of many brands owned by Marriott International. Some of the notable sister brands within the Marriott portfolio include:

• "Luxury" chains St. Regis Hotels & Resorts, Ritz-Carlton, JW Marriott, Edition, The Luxury Collection, W Hotels, and Bulgari Hotels & Resorts. 
• "Upper Upscale" chains Marriott, Delta Hotels, Sheraton ("Classic" designation), Marriott Executive Apartments, Autograph Collection Hotels, Le Meridien, Tribute Portfolio, Westin Hotels & Resorts, Renaissance Hotels, and Gaylord Hotels.
• "Upscale" chains Courtyard by Marriott, Four Points by Sheraton, Springhill Suites, AC Hotels, Aloft Hotels, and Element. Residence Inn itself falls into this band within the portfolio.
• "Upper Midscale" chains Protea Hotels, Fairfield by Marriott, TTownePlaceSuites, and Moxy Hotels.

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