Hotel Valuation Template

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 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.