Hotel ROI Calculator

Inputs

Use realistic operating assumptions for best estimates.

Number of rooms

Total keys available for sale.

Average daily rate (ADR)

Room price per occupied night.

Occupancy (%)

Share of available room nights sold.

Other revenue (annual)

Food, events, parking, spa, etc.

Variable cost (% of revenue)

Housekeeping, supplies, franchise fees, etc.

Fixed operating costs (annual)

Payroll, utilities, insurance, admin.

Reserve for replacement (%)

Commonly 3–5% for FF&E reserves.

Purchase price

Asset price excluding improvements.

One-time improvement budget

Renovation, systems, soft goods, etc.

Closing costs (%)

Legal, due diligence, lender fees, etc.

Land allocation (%)

Used to estimate building depreciation.

Tax rate (%)

For an estimated after-tax cash flow.

Financing (optional)

Use a loan

Loan-to-value (LTV %)

Applied to purchase price.

Interest rate (%)

Nominal annual rate.

Loan term (years)

Amortizing term length.

Interest-only period (years)

Optional IO years before amortization.

Projection (optional)

Used for sale estimate and NPV over your hold period.

Revenue growth (%)

Cost growth (%)

Hold period (years)

Exit cap rate (%)

Discount rate (%)

Example Data Table

Scenario	Rooms	ADR	Occupancy	Other Rev	Fixed Costs	Price	Loan LTV
Midscale city hotel	80	$120	68%	$150,000	$420,000	$6,500,000	65%
Seasonal resort	60	$165	58%	$240,000	$480,000	$7,800,000	55%
Airport hotel	110	$105	73%	$190,000	$610,000	$8,900,000	70%

Use “Load Example” to fill the first scenario.

Formula Used

Room Nights Sold = Rooms × 365 × Occupancy
Room Revenue = Room Nights Sold × ADR
Gross Revenue = Room Revenue + Other Revenue
NOI = Gross Revenue − Variable Costs − Fixed Costs − Reserve
Cap Rate = NOI ÷ Purchase Price
Loan Amount = Purchase Price × LTV
Cash-on-Cash = (NOI − Debt Service) ÷ Equity
Terminal Value ≈ Last-Year NOI ÷ Exit Cap Rate
NPV = Σ(CF ÷ (1 + Discount)^year) − Equity

How to Use This Calculator

Enter rooms, ADR, and occupancy to estimate room revenue.
Add other annual revenue from food, events, and services.
Set variable and fixed operating costs, plus reserves.
Enter price, improvement budget, and closing costs.
Enable financing to model debt service and DSCR.
Adjust growth, hold period, and exit cap for NPV.

Notes

Outputs are estimates for planning. Real results vary with seasonality, staffing, property condition, and market dynamics.

Related Calculators