Hotels Financial Modelling Help - Building a model first time

Hi all,

I was wondering if anyone can help me with my first hotels model. I have had little steer from seniors but need to get this done asap. Also I have no financials/assumptions it is from scratch and I was told we will get information later.

1)  Clarification of Order: 

I go from Revenue > EBITDARM (Rent & Management Fee) > Less Management Fee > EBITDAR > Less Rent  > EBITDA 

At this stage I am unsure whether to put in  'FF&E' to get to NOI or does this come after? I am also unsure where Acq. Capex goes -  but think this goes after NOI right?

2) How do I proceed to Free Cash Flows - I  need to highlight  this and ultimately input debt assumptions and then get to an exit multiple 

3)  Capital Structure - ownership i.e.  debt/repayment/refi/acq./capex - I need to model this.  So any 'structure' or methodology would be super helpful.

Thanks guys -  I really appreciate any help!

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Comments (2)

Most Helpful
Oct 14, 2021 - 2:31pm

I'll chime in here:

  • Total Revenue
    • Room Revenue
    • F&B Revenue
    • Other Revenue
    • Misc. Revenue
  • Operating Department Expenses
    • Room Expenses
    • F&B Expenses
    • Other Expenses
    • Misc. Expenses

This gets you to Gross operating income.

  • Undistributed Expenses
    • Admin & General
    • Advertising & Promotion
    • Maintenance
    • Utilities
    • Information & Telecommunications
    • Franchise Fees
    • Can sometimes include a 3% Management fee in here or below GOP

This gets you to Gross Operating Profit

GOP less fixed expenses (property tax, insurance) gets you to EBITDA, then less a 4% FF&E reserve gets you to NOI.

3) capital structure really depends. Usually 65% LTV and perhaps 2nd tranche to fund the PIP.

You can PM me for more details.

Oct 15, 2021 - 6:48am

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