HOTELS GUIDE
From RevPAR to Hotel NOI
RevPAR is the starting point for room revenue, but hotel value depends on the full bridge to sustainable NOI.
In this guideWhat the analysis measuresCalculation frameworkUnderwriting reviewHow to use the result
What the analysis measures
Multiply RevPAR by available room nights for room revenue. Add F&B, meetings, parking and other revenue using their own drivers.
Calculation framework
Deduct departmental expenses, undistributed costs, management and franchise fees, fixed charges and an appropriate FF&E reserve.
Underwriting review
Normalize seasonality, ramp, one-off expenses and owner-specific items. Keep GOP, EBITDA and NOI definitions visible and separate.
How to use the result
Capitalize sustainable NOI or discount cash flow to value the hotel. A strong RevPAR can still produce weak NOI when the cost structure is inefficient.