Brands & segments
Upper midscale
What Upper midscale means
Upper midscale is a Chain Scale tier defined by STR that sits between midscale and upscale properties, featuring full-service attributes like complimentary breakfast, premium bedding, and limited food and beverage options, targeting cost-conscious business travelers and families seeking elevated comfort.
How it is used
Operators and investors monitor upper midscale performance to assess market demand for core select-service products. Brands like Hampton by Hilton, Marriott's Fairfield, and Holiday Inn Express dominate this segment. Development decisions hinge on its lower construction and labor costs relative to upscale hotels, yielding strong operating margins. Revenue managers focus on driving rate during peak corporate midweek travel while using leisure packages to maintain weekend occupancy, making it a highly resilient asset class during economic downturns.
Worked example
A developer evaluates a 120-room Holiday Inn Express project with a projected $140 ADR and 75% occupancy. Generating $3,832,500 in annual room revenue with a 42% GOP margin, the asset yields $1,609,650 in operating profit. Lower overhead costs allow the owner to achieve debt service coverage faster than a full-service upscale property in the same submarket.
Common mistake
Misclassifying midscale hotels as upper midscale can lead to flawed competitive set benchmarking, overestimating achievable ADR, and unrealistic underwriting assumptions.
Related terms
Upper midscale in our reporting
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