My Take on Skift's The Squeeze: Inside the Crisis Crushing America's Hotel Owners

Sarah Kopit and the Skift team published a great piece a few weeks back called The Squeeze: Inside the Crisis Crushing America's Hotel Owners. It's worth your time. The reporting is rigorous, the central characters are humanized in a way industry coverage rarely achieves, and the Hilton-vs-Park Hotels chart alone tells a story that every hotel owner should understand. Read it before you read this.

First, I have deep empathy and passion for hotel owners. I spent eight years as CEO of Remington Hospitality, scaling the company from one owner to 150-plus hotels, roughly $1.6B in revenue under management, and 10,000 team members. I sat across the table from owners every week — Indian American families with one franchise hotel, mid-market private equity sponsors, REITs, institutional capital, sovereigns. I watched what COVID, then the rate cycle, then inflation did to their P&Ls. The pain Sarah captured in The Squeeze is not theoretical to me. Nayana Patel in Corpus Christi could be any of the AAHOA members. Her exhaustion is real. Her math is real. Her question — who are we doing it for? — is the question every overlevered, undercapitalized owner in this country is asking right now.

So let me say this clearly: the Skift article highlights a major problem. The asset-light franchise model has produced a structural divergence between brand profitability and owner profitability, and that divergence is widening. CMBS delinquencies for limited-service hotels doubling from 3.48% to 8.35% since 2022 isn't noise — it's a flashing red light. Anyone who says otherwise hasn't sat with an owner whose loan matures next year.

But the Skift frame — that the brands are villains, owners are victims, and the franchise model is broken — is wrong on all three counts. The brands are not villains. They are publicly traded companies executing a strategy in plain view, on contracts that owners signed with their eyes open, in twenty-year increments. Calling them villains lets owners off the hook for the part of this they can actually control — and it ignores the leakage that has nothing to do with the brand at all.

Here's the fuller picture.

The system is self-correcting. That's the point.

When I had Chris Silcock, President of Global Brands and Commercial Services at Hilton, on Not Done in early 2026, I asked him about the explosion of new brands. His answer was clean: brand proliferation is self-regulating. If a brand doesn't resonate, it won't attract owners or perform with guests. He didn't try to defend every flag in the portfolio. He acknowledged the market does the sorting.

Teague Hunter, who runs Hunter Hotel Advisors and brokered more transactions in the last cycle than almost anyone in the country, told me the same thing in different language on his recent Not Done episode. Hilton launched Spark to cannibalize tired Hampton Inns. Marriott launched AC and City Express to push Courtyards and Fairfields down a tier. The brands intentionally cannibalize their own aging product because if they don't, somebody else will — exactly what happened when Hampton and Holiday Inn Express ate Holiday Inn alive in the 80s and 90s. That isn't predatory. That's how every product company with a 70-year horizon stays alive.

The Hilton-versus-Park Hotels stock chart is the same phenomenon. Hilton up nearly 5x, Park down 22% since the 2017 spin. That's not a moral failing. It's the market correctly pricing two very different businesses — a high-margin licensing engine versus a capital-intensive real estate portfolio that has to actually maintain the buildings. Tony Capuano said it himself on Marriott's Q4 call: the owner and franchise community is at a different stage in their recovery. He wasn't dodging. He was telling the truth.

Owners signed 20-year agreements with LDs. With their eyes open albeit they only underwrite the first 5 years.

This is the part nobody at AAHOA wants to say out loud, but it's the actual root cause.

The standard hotel franchise agreement runs 20 years. Per AAHOA's own materials, terminating early typically costs 36 months of royalty fees, and at some brands it's 60. On a midscale hotel doing $4M in room revenue, a Hilton 5% royalty plus 4% program fee is roughly $360,000 a year. Walking away costs $1M to $1.8M before you've factored in the rebrand, the loyalty hit, or the appraisal damage. Total franchise fees often run 10-12% of room revenue once you stack royalty, marketing, loyalty, and program fees. That's one of the longest, most expensive irrevocable commitments in commercial real estate.

Twenty years. Locked in. With a contract that lets the franchisor change the PIP, alter brand standards, sell the company, launch competing brands next door, and proliferate fees mid-term. And owners signed it. Generation after generation.

The brands aren't going to volunteer concessions. Owners have to stop signing 20-year contracts that don't include them. Why would Hilton & Marriott stop when their NUG growth is 5-7% and supply growth is sub 1%?

Software & Distribution is the second royalty. This is missed by many & Skift’s piece.

Here's what Skift completely missed: the software stack has become a parallel royalty system, and almost nobody is talking about it.

A typical branded hotel today runs 10 to 15 SaaS subscriptions: PMS, RMS, channel manager, CRS, booking engine, CRM, guest messaging, reputation management, housekeeping, accounting, time and attendance, payment processing, business intelligence, sales and catering. Each charges per room per month. Industry data puts technology spend at 1.4% to 4.5% of total operating revenue and rising fast. On that same $4M midscale, that's $56,000 to $180,000 a year on top of what the brand already takes.

Then there's payment processing. Modern PMS vendors like Mews and Cloudbeds embed payment rails that charge 1-3% per transaction plus $0.15-$0.30 per swipe. A 100-room hotel processing $2M in card volume pays $20,000-$60,000 a year in fees that didn't exist in the on-premise era. When I had Richard Valtr on Not Done, he was honest about the model — Mews has 12,500-plus properties across 85 countries and just raised $300M at a $2.5B valuation. That's a fantastic business. Built on owner P&Ls.

Then the OTAs. Booking.com averages 15% commission. Expedia 15-25%. Independents pay closer to 30%. For owners who can't drive direct bookings — most midscale and economy operators — the OTA stack functions as a third royalty on top of brand and software.

Stack it: brand ~10%, software ~2%, OTA-weighted distribution 4-7%. That's 16-19% of gross room revenue gone before a single dollar reaches labor, utilities, debt service, or the owner's draw.

Skift profiled three of those leakage points and ignored the other two entirely.

The squeeze isn't all the brand's fault.

Teague Hunter, CEO of Hunter Hotels, (our Collab publishes later this month) made a point on Not Done that deserves its own paragraph: the worst expense creep over the last three years has been the uncontrollable line items. Taxes and insurance. He gave the example of a property whose taxes went from $100,000 to $400,000 — apply a 10 cap to that and you've vaporized $3M of asset value with zero brand involvement. Insurance has run the same playbook in coastal and wildfire markets.

Then there's policy. Half the hotels in downtown LA aren't equity-positive right now — not because of Hilton or Marriott, but because of the work rules, minimum wage trajectory, and tax structure the city has imposed. They're hanging on for World Cup and the Olympics and praying. Minnesota and Chicago are similar. Owners in those markets are getting squeezed by the political ecosystem they operate in, not the brand on the door.

Financial discipline is the actual moat.

When I had Nate Tyrrell, Chief Investment Officer of Host Hotels & Resorts, on Not Done, I asked him what metric every owner should obsess over. No hesitation: EBITDA per key. Not RevPAR. Not TRevPAR. Profit per key. Host has an investment-grade balance sheet, a 14-year average employee tenure, and an in-house analytics team that was working with IBM Watson before most of the industry could spell AI. Result: they buy at 13.6x EBITDA and sell at 16.7x. Marriott's Transformational Capital Program targeted 3 to 5 points of RevPAR index improvement at Host's properties and delivered 8.7. None of that is luck. That's discipline.

A few rules every owner should be running today: keep leverage at 60% or less of stabilized value, hold a 12-month debt service reserve, fund FF&E reserves at the full 4% of revenue (not the 2% your lender lets you skate on), underwrite refinances at 200 basis points above current rates, and never let a single asset represent more than 25% of net worth.

Most of the owners getting squeezed today violated three or four of those rules during the cheap-money era of 2011 - 2019. That's a planning failure, not a brand failure.

What actually fixes this.

Three things will:

First, owners need to stop signing 20-year agreements without Change of Control protection, performance guarantees on marketing fund deployment, and shorter renewal windows. The brands will change when enough owners walk.

Second, the operators who consolidate the software stack and compress G&A through automation & AI will absorb the squeeze and emerge with margin. Software & AI won't replace the brand (yet).

Third, financial discipline beats brand prestige every cycle. Host's playbook works at any size. Underwrite conservatively, reserve aggressively, build optionality, and never own an asset you can't hold for ten years.

Hotels are hard. Teague Hunter said it three times in our conversation, and he's right. But hard doesn't mean broken. The squeeze is real. The villain frame is wrong. And the answer is operating, not litigating.

The good news is Hotel Values have been dropping since Summer of 2022 but it does feel like we are hitting bottom on values in 2026, and let’s be honest, we need a Major Value Reset for the industry.

Rachel Moniz, COO of HEI Hotels & Resorts.

100+ hotels. 30+ capital partners. 25% gender parity at the GM level. AHLA Foundation Paving the Way honoree. We've run in the same circles for 15 years and somehow had never sat down. Worth the wait.

• "I came with the building." Rachel was GM of the Liberty in Boston when HEI bought it. Day one, they were going to fire her. The minority owner wrote her protection into the deal docs.
• HEI thinks they have ~4 real competitors. Not arrogance. Math. The owner-operator lens changes everything.
• HEI Loves. 15,000 employees. Still operates like 6.
• AI take: helpful, not magic. The CEO gets replaced before the housekeeper.
• Hardest call of her career: laying off her entire team in COVID. Then rebuilding it one rehire at a time.
• On hiring GMs: "I like the prickly ones."
• On bias: men raise their hand at 40% ready, women wait until 100%. That's the whole game.
• Dream dinner: not a CEO. Bob Dylan.

She's not done with learning. Neither am I. OUT TOMORROW.

Cheers,
Sloan