Financial Model for Hotel Investment Analysis

I love building new, unique, and useful financial modeling frameworks. For this template, I used the original hotel model as a base and added more flexible debt and equity options, two ancillary revenue streams, and an option to construct and sell residential units. See below for the full feature list and updates that improved cash flow planning and investment analysis.



$75.00 USD

After purchase, the template will be immediately available to download. It is also included in the real estate models bundle, hospitality models bundle, and the Super Smart Bundle.

luxury hotel building

Template Features:

  • Works for new construction, acquisitions, or a combination.
  • Model for up to 120 months (10 years) with a dynamic end month option.
  • Project-level returns (IRR / equity multiple and minimum equity required).
  • Joint venture configuration for LP/GP type structures with an IRR hurdle waterfall.
  • Full assumption configuration for acquisitions or new development or a combination.
  • 3-phase construction schedule, two construction loan options (i/o period with permanent switch).
  • Acquisition loan (option for interest-only period and switch to permanent loan).
  • Option to REFI all debt at a defined month in the future.
  • Exit cap rate defines sale amount.
  • 4 revenue stream configurations: 
    • Bookings with seasonality via adjustable ADR for each month of the year, annual growth rate of ADRs, and a separate area to define occupancy over a 12-month period and annualized improvement with a defined max occupancy for stabilization. Up to 20 room types with a dynamic start month and key count (room count).
    • Residence Sales - based on three unit types, average sales price, selling costs, and a schedule to define when cash is collected from these sales for more granular cash flow planning.
    • Food and Beverage based on a defined annual revenue amount, food and beverage OPEX expenses defined as a percentage of booking revenue, follows room rate growth for revenue increase over time. This has its own seasonality configuration as well for the percentage of the expected annual revenue that is earned in each month of a given year.
    • Events Revenue based on a defined annual revenue amount, seasonality for when it is earned throughout the year, defined growth rate, and defined margin earned on events.
  • Visualizations and KPIs including DSCR, average occupancy over time, RevPAR (revenue per available room), NOI, and more.
  • Monthly and annual pro forma detail (shows all components that drive down to cash flow per period).
  • Equity investments can happen over time or all up front, the user defines this per month. Distributions can be defined manually as well as have an automatic component where the user picks the month distributions start and the minimum cash to keep in the operating account.
  • Robust OPEX schedule for fixed costs.
  • Robust staffing cost schedule (fixed and dynamic assumptions). The dynamic staffing costs are based off active rooms over time (active keys).
  • Detailed Sources and Uses as well as a roll-up summary view of Sources and Uses.
  • Executive Summary of the primary line items and cash flow.
  • Sensitivity table (relevant for acquisitions).
I had a breakthrough with the sources and uses component that was extremely beneficial to how I plan to model this for things in the future. For business simulations that involve initial costs that don't all happen in the initial period, for example having construction costs for the first 6 to 24 months or more, there needs to be a way to account for all the costs that play a part in the minimum equity required. Things like NOI or initial burn, GP fees, developer fees, and constructing and selling residential units all play a part in how much money needs to be raised at minimum. In this model, I built a formula to dynamically calculate the month # that the minimum cash position occurs in and then for sources and uses, all the partial uses / sources that may happen over time are summed up as long as they happen prior to the minimum cash position being reached. This worked out great and is robust in being able to handle arbitrary variations in strategic planning for hotel building.

Overall, I am pleased to put this out to the public and anyone that is underwriting or planning to build / acquire or invest in new hotel projects can pull value out of this template.

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