Hotel Underwriting Calculator
Convert ADR and occupancy into RevPAR, revenue, stabilized NOI, hotel value, maximum loan proceeds, and equity including the PIP budget.
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Use this estimate to prepare, or request a financing review when you are ready to share the property, requested proceeds, and timeline.
Build a stabilized hotel underwriting estimate from rooms, average daily rate, occupancy, and other revenue. Maximum loan proceeds use the lower of the selected DSCR and loan to value limits.
Hotel Operations
Acquisition and PIP
Loan Assumptions
RevPAR
$105.00
Occupied Room Nights
25,550
Annual Room Revenue
$3,832,500.00
Total Hotel Revenue
$4,582,500.00
Operating Expenses
$3,207,750.00
Stabilized NOI
$1,374,750.00
Indicated Hotel Value
$15,275,000.00
Total Cost Including PIP
$11,000,000.00
Maximum Loan Sizing
Maximum by DSCR
$11,234,990.03
Maximum by Loan to Value
$6,500,000.00
Maximum Loan
$6,500,000.00
Estimated Equity Including PIP
$4,500,000.00
Annual Debt Service
$589,156.43
Resulting DSCR
2.33x
Binding Constraint
Loan to value
Loan to Total Cost
59.09%
This is a stabilized planning estimate. Hotel lenders may underwrite departmental expenses, undistributed expenses, management fees, franchise fees, furniture fixtures and equipment reserves, taxes, insurance, seasonality, trailing performance, and PIP funding separately. The capitalization rate estimate does not replace an appraisal.
Ready to review a hotel financing scenario?
Send your underwriting estimate to CapitalAx for a financing review based on hotel performance, property value, PIP scope, and requested loan structure.
How the Hotel Underwriting Calculator Works
The calculator multiplies average daily rate by occupancy to produce revenue per available room. Annual room revenue applies RevPAR to every available room night, then adds other hotel revenue. The selected operating expense ratio is deducted to estimate stabilized net operating income.
How Maximum Hotel Loan Proceeds Are Sized
The calculator estimates hotel value by capitalizing stabilized NOI, then compares the purchase price with the indicated value for loan to value sizing. It separately converts NOI and the target DSCR into maximum annual debt service. Maximum loan proceeds are the lower of the DSCR and loan to value results.
How the PIP Budget Affects Equity
A property improvement plan can materially increase the cash required for a hotel acquisition. This calculator adds the PIP budget to the purchase price when estimating total project cost and borrower equity. Actual lenders may finance part of an approved PIP, require the borrower to fund it, establish completion reserves, or release funds through construction draws.
Hotel Underwriting Worked Example
A 100 room hotel with a $150 average daily rate and 70 percent occupancy produces $105 RevPAR and about $3,832,500 of annual room revenue. Adding $750,000 of other revenue and applying a 70 percent expense ratio produces about $1,374,750 of stabilized NOI before loan sizing.
Choosing Hotel Inputs and Reading the Result
Use trailing performance for an as is scenario and support any stabilized ADR or occupancy with market evidence. Include food, beverage, parking, meeting, resort, and other income in other revenue only when the property actually earns it. The PIP belongs in total project cost, while the operating expense ratio should capture the recurring costs needed to produce stabilized NOI.