Hotel Valuation Template

Start with the Assumptions sheet. Enter your hotel's current ADR, occupancy rate, number of available rooms, and revenue split by department. If you're valuing a property you own, pull these figures from your most recent full year of operations. If you're valuing an acquisition target, use the trailing 12-month (T-12) financials from the offering memorandum, or build a stabilized projection if the property is underperforming. Set your cap rate based on current market data for your property class and market — the sheet includes a reference table of typical cap rate ranges by hotel category as a starting point.

Once the assumptions are in place, move through each valuation tab. The Income Approach sheet will auto-populate from your inputs — review the NOI figure and make sure it reflects normalized operations (strip out one-time items, owner expenses, and non-recurring revenue). On the Market Approach sheet, enter your comparable sales data. Even three or four solid comps give you a defensible range. The Asset-Based sheet requires a few additional inputs around construction cost estimates and FF&E value — check with a local contractor or appraiser if you don't have current replacement cost data.

The Valuation Summary brings everything together. Adjust the method weights to reflect data quality and property circumstances, then review the implied metrics: price per room, cap rate, and RevPAR multiple. If any of these is significantly outside the range you'd expect for the market, go back and check the underlying inputs before finalizing. The summary is designed to be printable — useful for presenting a value conclusion to investors, lenders, partners, or buyers without exposing all the underlying mechanics.

Valuing a hotel is more complicated than valuing most commercial real estate because the business component is inseparable from the physical asset. A vacant office building has a clear replacement cost; a hotel with a strong management team, a loyal corporate account base, and optimized RevPAR is worth significantly more than the same building with poor operations. That's why hotel appraisals always use at least two — and usually three — valuation approaches, and why the income approach typically carries the most weight: the property's value is fundamentally a function of what it earns, not just what it's built from.

The income approach for hotels centers on Net Operating Income (NOI), which differs from EBITDA in that it includes a reserve for FF&E replacement — typically 3–5% of total revenue — and is calculated after management fees. Stabilized NOI is what a competently managed property would generate in a normal year, stripped of one-time disruptions. Cap rates for hotels vary widely: luxury full-service properties in major markets trade at 7–8%, upper-midscale select-service assets in secondary markets at 9–10%, and budget or economy properties at 10–12% or higher. RevPAR multiples — where price is expressed as a multiple of annual RevPAR times the number of rooms — typically range from 6–10x depending on market and property quality. These benchmarks shift with interest rates and the broader transaction market, so always verify against recent comp sales.

In practice, most hotel buyers and lenders want to see all three approaches, even if one clearly dominates. A lender will use the income approach to size a loan; a buyer will use the market approach to check whether they're overpaying relative to the comp set; and the asset-based approach is the floor — a sanity check against replacement cost. Running all three and reconciling them into a weighted conclusion is not just good practice — it makes your valuation defensible. This template is built around that workflow: enter your operating data once, let the model run all three approaches simultaneously, and use the summary to produce a clear, cross-checked value conclusion.