by a searcher
from Northern Illinois University
in Chicago, IL, USA
9mos ago
Multiples for a hotel?
I am evaluating a standalone hotel. What are typical multiples for a non-branded hotel? Seller is looking at a multiple of revenue, which I thought was strange.
Thanks
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by a professional
9mos ago
from Southern Oregon University
in Portland, OR, USA
There are a good number of deals you can review for multiples on a non-branded hotel in DealStats Transactions that Searchfunder provides. I came up with 85 deals for NAICSredactedClick on the individual row to open up the full financial details including deal terms, notes, multiples and more.
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by a searcher
9mos ago
from University of Pennsylvania
Hard to say without more detail, but hotels generally trade for 6-10% cap rates or ~3-6x rooms revenue. Math changes a bit with F&B revenue or if the asset isn't stabilized.
Revenue multiples can be helpful to cut through the noise of the seller's expenses.
If you're targeting a 10% proforma yield: pay 3x revenue and you only have to hit a 30% margin, pay 4x and you have to hit a 40% margin, pay 5x and you have to hit a 50% margin.