Hotel and hospitality
Keys, occupancy, and ADR
A hotel re-leases every night, so occupancy and ADR drive rooms revenue through RevPAR. Departmental costs, management fees, and the FF&E reserve come out on the way to NOI.
Rooms revenue, department by department
Occupancy and average daily rate build RevPAR and rooms revenue. Departmental profit, management and franchise fees, fixed charges, and the FF&E reserve then resolve to NOI.
- Keys, occupancy, and ADR to RevPAR
- Departmental profit and management or franchise fees
- FF&E reserve and fixed charges to NOI
RevPAR
$142
GOP margin
38%
Going-in cap
8.2%
Renovation and repositioning
A brand-mandated PIP takes rooms out of service. The model carries the displacement and the ramp back to stabilized occupancy, so year one is never assumed clean.
- PIP or renovation with room displacement
- Ramp back to stabilized occupancy and ADR
- Exit on the stabilized, post-renovation NOI
OccupancyADRDepartmental P&LManagement feeFF&E reservePIP displacement
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