Hotel Valuation Calculator

Net Operating Income is a hotel's annual income after all operating expenses have been paid, but before deducting taxes, depreciation, and financing costs (like loan interest). It's calculated as: Gross Revenue - Operating Expenses.

The Cap Rate is the rate of return an investor would expect to receive on a property. It is determined by the market and depends on factors like property type, location, and economic conditions. A hotel in a prime, stable market will have a lower cap rate than a hotel in a more volatile location.

Finding a precise Cap Rate requires market research. You can look at recent sales of comparable hotels in your area (comps), consult with commercial real estate brokers, or subscribe to industry reports that publish market data.

No, the Cap Rate method is just one approach. Other common methods include the 'Discounted Cash Flow (DCF)' analysis, which projects future income, and the 'Sales Comparison' approach, which looks at the price per room of recently sold comparable hotels.