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Hotel Income Proforma Calculator
Underwrite a hotel by ADR, occupancy, and keys. Calculates RevPAR, room revenue, NOI, value per key, and lender DSCR.
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How to use this calculator
- Enter the room-revenue drivers. Type the key (room) count, your average daily rate (ADR), and projected occupancy. RevPAR and annual room revenue are computed automatically.
- Layer in other revenue. Add F&B, parking, telecom, and resort fees as a percentage of room revenue. Limited-service is typically 10–20%; full-service can reach 50–80%.
- Enter departmental + undistributed expenses. Bundle rooms department, F&B cost of goods, sales & marketing, A&G, and franchise fees into the OpEx panel. Don't forget the FF&E reserve.
- Pick a hotel cap rate. Use comparable hotel sales (limited-service typically 8–10%, full-service 7–9%). Value is NOI ÷ cap rate.
- (Optional) Add financing. Open Financing & returns to model LTV, interest rate, and amortization. Hotel lenders typically require 1.40×–1.50× DSCR.
- Read the results. Review NOI, value, value per key, DSCR, and cash-on-cash. Use the export button for a lender-ready PDF.
Tips
- RevPAR = ADR × Occupancy %. It's the single best snapshot of hotel performance.
- Hotel FF&E reserve is typically 4% of total revenue.
- Construction or repositioning hotel loans rarely exceed 55% LTV.
Room revenue drivers
Operating expenses (annual)
Valuation
AI explanation
Free: 3 explanations per day. Or use your own AI key — your key stays in your browser.
DSCR analysis
StrongComfortable agency / CMBS coverage. Room for vacancy or rate stress without breaching covenants.
- Debt service+11.1%Cut loan 10% (~$2,499,895 less debt) → 1.78x DSCR.
- NOI+10.0%Each 10% NOI lift → +$354,152/yr → 1.76x DSCR.
- Interest rate+9.4%Drop rate 100 bps to 6.50% → 1.75x DSCR.
- Amortization+5.7%Extend to 30 years → 1.69x DSCR.
Proforma summary
| Gross potential income | $5,203,440 |
| Less: vacancy & credit loss | ($0) |
| Plus: other income | $780,516 |
| Effective gross income | $5,983,956 |
| Less: management fee | ($209,438) |
| Less: other operating expenses | ($2,233,000) |
| Net operating income | $3,541,518 |
| ÷ Cap rate | 8.5% |
| Estimated property value | $41,664,912 |
Built for hotel brokers, appraisers, and lenders. Enter ADR, occupancy, and key count to model RevPAR and room revenue. Layer in F&B and other departmental income, OpEx, and a market cap rate to see value per key and levered returns.
ADR × Occupancy × Keys × 365
Room revenue is the foundation of every hotel proforma. We compute it directly so changing any of the three drivers updates RevPAR, gross revenue, NOI, and value in real time. Other revenue (F&B, parking, telecom, resort fees) is modeled as a percentage of room revenue — typical industry ratios are 10–20% for limited-service and 50–80% for full-service hotels.
What lenders look for
Hotel lenders typically require 1.40x–1.50x DSCR (vs. 1.25x for multifamily) due to revenue volatility, plus a 4% FF&E reserve and franchise PIP underwriting. Loan-to-value rarely exceeds 65% for stabilized hotels and 55% for construction or repositioning deals.
Seasonality, revenue management, and scenario planning
Hotel revenue is not linear across the year. Shoulder seasons, compression events, and local demand generators — conventions, sports tournaments, university graduations — can push ADR 40–100% above baseline. A thorough proforma models at least three scenarios: base case, peak, and trough. RevPAR indexes against the competitive set (STR report) are the industry standard benchmark; aim for a RevPAR index above 100 to show the asset is capturing its fair market share. Underwrite with a higher cap rate for hotels with heavy seasonality or single-demand-driver risk, and stress-test the debt service coverage in the trough month, not just the annual average.
Frequently asked questions
What is RevPAR?
Revenue per available room: ADR × occupancy %. It's the single best indicator of hotel performance because it blends rate and demand into one number.
How is value per key calculated?
Estimated value ÷ number of keys (rooms). Limited-service interior-corridor hotels in secondary markets often trade $80,000–$140,000/key; full-service urban hotels can exceed $400,000/key.
Why are hotel cap rates higher than multifamily?
Hotel income is daily and operationally intensive — higher business risk earns a higher required return. Cap rates for limited-service hotels typically run 8–10%, full-service 7–9%.
Are departmental expenses included?
Yes — bundle rooms department, F&B cost of goods, and undistributed expenses (sales & marketing, A&G, franchise fees) into 'Other expenses'. The result is house profit / NOI before reserves.
Before you act on this result
This calculator is general education, not advice. Before you sign, file, offer, or fund anything, walk through this quick checklist:
- Confirm every input (price, rate, taxes, insurance, HOA, fees) against a real document — a Loan Estimate, purchase contract, tax bill, or HOA statement — not a guess.
- Verify the local rules where the property sits: closing customs, transfer taxes, disclosure requirements, and title practices differ by state and county.
- Talk to a licensed professional in that jurisdiction — a local real estate broker, closing attorney or title company, CPA, state-licensed appraiser, or mortgage loan officer.
- Remember Larius is licensed as a real estate broker in North Carolina only. Anything outside NC needs a locally licensed pro.
- Get material assumptions in writing (rate lock, insurance quote, tax cap, rent comps) before you commit money or sign.
Read our Editorial FAQ for the full education-vs-advice breakdown, or let us know if a number here looks wrong.
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