Hotel Financial Model

This Hotel Financial Model Template has been built for use by any company founder or executive in the Hotel space, Investors or Analysts looking at researching Hotel businesses or Students looking to study how a Hotel Business operates and the key variables underpinning it. Featuring specific Hotel metrics you can track (Average Occupancy Rate, Average Daily Rate, Revenue Per Available Room (RevPAR) per month, Gross Operating Profit Per Available Room (GOPPAR) per month, Average Length Of Stay (ALOS), Cost Per Occupied Room (CPOR) per month, and more), users will easily be able to navigate the model with all input fields highlighted in Blue font. These models are designed to be the perfect financial tool for business owners to use to make decisions for their company and also to provide to investors to give a snapshot of how the business is currently performing and what the forecasts look like.

General Assumptions

Starts with basic model questions on start date of the model, tax rate assumption, working capital assumptions and funding assumptions.

Revenue Assumptions

Revenue assumptions are the anticipated factors that drive a company’s income generation over a specific period. These assumptions form the basis for financial projections and are crucial for planning and decision-making. In our model we have included detailed inputs on Number of Rooms by category, Maximum Capacity Per Room, Rates Per Day Charged, Estimated Occupancy By Room Type, Food and Drinks Revenue, Average Room Spend, Other Revenue Streams in the Hotel (Event and Conference, Spa and Wellness, Retail and Gift, and others).

Operating Expenses Assumptions

Operating expense assumptions are typically based on historical data, industry benchmarks, market trends, and management’s judgment. They are crucial for estimating the total cost of running the business and for determining profitability. Like revenue assumptions, it’s important to regularly review and adjust operating expense assumptions to reflect changes in the business environment and ensure the accuracy of financial forecasts. In our model we have included detailed inputs on Hotel Staff Costs (General Manager, Front Office Manager, Housekeeping, Food and Beverage Manager, Sales and Marketing, Event Coordinator, Guest Services Agent, Other), Typical Hotel related Operational Expenditure items, however, you can add any other expenses you think may be relevant to your business in this sheet. 

Capex Assumptions

Capital expenditure (Capex) assumptions refer to the anticipated investments a company plans to make in long-term assets, such as property, plant, equipment, and technology, over a specific period. These assumptions are crucial for financial planning, budgeting, and forecasting, as they impact the company’s cash flow, profitability, and growth prospects. We have included a Fixed asset cost assumption schedule here for the main items likely to be on a company’s capex sheet and also a Use Of Funds assumption list with corresponding pie chart. 

Monthly Projections

We have broken down projections on a Month by Month basis when projecting Income Statement, Balance Sheet and Cash Flow Statement items. The monthly projections are provided over a 5 year time frame. This is particularly useful for businesses looking at month-on-month trends and insights in the business, which leads to better decision making and also better budgeting should there be a need to either raise more capital, pursue growth opportunities from excess capital or pay down interest bearing debt. Monthly projections also help a business ascertain what performance may be seasonal in nature when looking at growth projections on a month-over-previous-year’s-month basis.  

Annual Projections

The model has Annualized Financial Projections of Income Statement, Balance Sheet and Cash Flow Statement over a 5 year time frame. Annual projections provide an excellent overview of expected revenues, expenses, profits, cash flow, and other key financial metrics for the upcoming year. Annual projections are essential for strategic planning, budgeting, fundraising, and performance evaluation for any company at any stage of their business cycle. 

Hotel Metrics & Ratios

Hotel specific metrics (Average Occupancy Rate, Average Daily Rate, Revenue Per Available Room (RevPAR) per month, Gross Operating Profit Per Available Room (GOPPAR) per month, Average Length Of Stay (ALOS), Cost Per Occupied Room (CPOR) per month), Profitability Ratios, Liquidity Ratios, Asset Turnover Ratios provided. 

Summary of Financial Statements

Summarized Financial Statements over a 5 year time frame helps for better snapshots of financial performance. Income Statement, Balance Sheet and Cash Flow Statement all provided. 

Charts

Hotel specific Charts available including Revenue vs Direct Costs, Revenue Streams, Cashflow Summary and Profitability Analysis.

DCF Valuation

We have included a Discounted Cash Flow (DCF) Valuation model showing the Net Present Value (NPV) of the Business based on a series of growth rates and assumptions. Weighted Average Cost of Capital Assumptions also provided including Risk Free rate, Beta, Risk Premium and Equity Risk Premium. A DCF valuation is a method used to estimate the value of an investment, business, or asset by discounting its expected future cash flows to present value. It is based on the principle that the value of an investment is determined by the present value of its future cash flows. The DCF valuation technique is widely used in finance, investment analysis, and corporate finance for making investment decisions, determining the fair value of securities, and evaluating the worth of businesses.

Depreciation Schedule

Detailed Depreciation Schedule shows additions / disposals to the Fixed Asset Register of the business. Sections included for Computer Equipment, Furniture & Fittings, Others. 

Debt Schedule

Debt schedule provided with interest rate assumptions and payback period assumptions included. 

Equity Schedule

Equity schedule provided with assumptions on all investments into the business by investors or owners.