HOTELS GUIDE
How to Build a Hotel Financial Model
A hotel model links rooms, ADR, occupancy and ancillary revenue to operating profit, financing, valuation and equity returns.
In this guideWhat the analysis measuresCalculation frameworkUnderwriting reviewHow to use the result
What the analysis measures
Build available room nights, occupied rooms and ADR before room revenue. Add F&B and other revenue separately because their margins and seasonality differ.
Calculation framework
Move from departmental profit through undistributed costs, management and franchise fees, fixed charges and FF&E reserve to a clearly defined NOI.
Underwriting review
Separate development or acquisition capital from operating cash flow. Debt service, refinancing and sale proceeds belong below property-level cash flow.
How to use the result
Test ADR, occupancy, opening delay, payroll, margin and exit cap rate. Show cost per key, RevPAR, GOPPAR, NOI, DSCR, IRR and equity multiple on the dashboard.