What a hotel operator actually costs
Ask three operators what they charge and you will get three headline numbers and zero comparable totals. The headline royalty is never the real cost; the surcharges are. Here is the all-in picture across every operator model, so you can compare like with like.
The four models, compared honestly
"Operator" covers four very different deals. Each charges differently, so headline rates mislead.
- Hard franchise (Marriott, Hilton, IHG). Royalty 5-6% plus a marketing/programme levy of 2-3.5% plus reservation, loyalty and IT surcharges. All-in commonly 9-12% of room revenue, on 15-20 year terms. You take the brand standards wholesale.
- Soft brand (Autograph, Curio, MGallery). A lower royalty and lighter standards, but the same stacking habit. All-in typically 6-9%, on 10-15 years. You keep your name; the chain keeps the guest.
- Third-party management (Aimbridge, Highgate and the like). A base management fee of 2-3.5% of revenue plus an incentive fee of 5-12% of gross operating profit, usually behind an owner-priority return. They run the hotel; you carry the brand decision separately.
- Technology-first platform (YMME). Either a flat subscription that is not a percentage at all (Solo), or 4% (Duet) / 6% plus a small equity stake (Ensemble) - one transparent line, no separate marketing levy, and you can leave if targets are missed.
The surcharges that do the damage
The gap between the headline and the total is almost always made of fees that are technically optional but practically mandatory:
- Marketing / brand fund - 1-3% of room revenue, spent at the chain's discretion.
- Reservation and channel fees - per booking, on top of OTA commissions.
- Loyalty programme charges - you fund the points a guest earns on the chain's currency.
- Technology and IT - mandated systems billed per room or per month.
The honest comparison is not royalty vs royalty. It is total cost of ownership vs total cost of ownership.
Why one transparent line matters
A single fee does two things a stack cannot. It lets a CFO model the deal in one number, and it aligns the operator with the owner - if the operator only earns when revenue grows, there is no incentive to bury cost in surcharges. That is the principle behind YMME's pricing: one line, owner-priority before any upside, and the contract itself written so your return comes first. The full structure is on the economics page, and you can model it on your own numbers in the calculator.
What to ask any operator
- What is the all-in percentage, including marketing, reservation, loyalty and IT?
- What is the term, and what does it cost to leave?
- Who owns the guest data and the loyalty relationship at the end?
- Is any fee charged on revenue regardless of profit?