How Underwrite handles Hotel.
Hotel income is modeled per room. Review the room count, daily rate, occupancy and revenue per available room. The revenue input is monthly income per room; check the occupancy treatment to avoid counting vacancy twice.
The Hotel example opens with Underwrite Core. The worked example, Cayuga Commons, is free with no sign-in.
What the model covers
The operating summary shows these measures for a Hotel deal:
- Keys. Room count.
- ADR (estimated). Average Daily Rate, computed as monthlyPerKey / 30.
- Occupancy. 1 minus vacancy. Note: when ADR x occupancy is baked into monthlyPerKey, set vacancy to 0 to avoid double-counting.
- RevPAR. Revenue per Available Room = ADR x Occupancy. The canonical hotel KPI.
- Cost / Key. Purchase price divided by key count. Compares directly to industry benchmarks ($150-500K/key for typical full-service, $80-200K for limited-service).
Checks for this property type
The validation guards use these tighter bands for Hotel instead of the generic defaults:
- Property management % of EGI: 5-15%. Hotel property management includes brand royalty, marketing fund, central reservation, loyalty, and franchise fees. Real hotels often run 10-12%, vs 2-6% for most other asset classes.
- Reserves % of EGI: Hotels can legitimately run 4%. FF&E reserve requirements written into franchise / management agreements.
Stress scenarios
The desk offers these stress scenarios when Hotel is the property type:
- Hotel Demand Shock. Occupancy -10pp, ADR -10%, exit cap +75bps. Models a recession or post-event demand collapse on hotel revenue per key.
- All four generic stress scenarios (Base, Recession, Rate Spike, Aggressive) are also available on Hotel deals.
Example deal: Pioneer Square Boutique Hotel
The Hotel pre-built example computes to the headline values below. With Underwrite Core, open it in the tool to edit any input and watch the model update, or open its investment committee memo.
Current model boundaries for this asset class
These Hotel features are simplified or left out of the model, and stay with the analyst. The full list across all asset classes is at /methodology/beyond-phase-1.
- FF&E reserves are folded into the generic reserves line rather than a dedicated 4-5% capex stream.
- Brand and management fees are aggregated into property management instead of split into royalty, marketing fund, central reservation, loyalty, and management fees.
- F&B revenue is rolled into other-income instead of split rooms / food-beverage / banquet / parking / ancillary.
- Group vs transient mix is not modeled; ADR and occupancy are aggregate inputs.
- Seasonality is annualized; real hotels run monthly RevPAR with seasonality indices.