Hotel Valuation - Real Estate Development Model

The Hotel Financial Model provides a framework to forecast the Income, cash flows and sensitivity analysis.

by Jair Almeida
Business Controller and FreelancerFollow 26

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Description
This template is a very detailed financial model that takes into account the specifics of the real-estate niche that is the hotel industry.

This is a tool for modeling a new hotel, including the development costs, refinance, operational projections and eventual sale. The template is monthly in nature), and it is a 100% unlocked Excel file with fully transparent formulas that can be further tailored to suit your particular needs.

The development expenses are modeled following an s-curve (normal distribution), meaning that construction expenses are projected in a way that you have few expenses in the beginning, and then they quickly ramp up to your full project costs, which is closer to the reality of a construction project.

Taking into account key assumptions as occupancy rates, the average check per different room types, and the combination of fixed and variable costs, this tool provides a framework to project a monthly and annual hotel cash flow pro-forma, and thus reckoning the unique attributes of the segment. The model also forecasts the expected Income, Balance sheet and Cash Flow statement on a monthly and annual basis; however for financial modeling, valuation, and investment analysis, the users should focus on the pro-forma CF.

The template also contains a standard 4-tier IRR hurdle waterfall model to distribute proceeds between the general partner and limited partner. The user has the ability to adjust the equity share for GP and LP as well as the hurdle rate in each tier.

The model also allows the user to develop scenarios based on the variation of key metrics, namely occupancy rate, COGS, supplies costs, and changing in average check per guest. After modeling the scenarios, the user can make the comparison between them side-by-side.

Model Structure:

Intermediate Sheets:
• Revenue & COGS Projections: Sales Breakdown by different menu items and by Department/Group of sales (room rent, Food, Beverage and others);
• Expenses & WKC: Projection for Wages, COGS, Overhead expenses and the working capital requirement;
• Financing: Modeling of the construction and permanent loans, taking into account factors as capitalized interest period, interest only period, term, refinance and loan payoff;
• Depreciation: Calculation of the depreciation, according to the Capex for each year.
• Working Capital: Calculation of the working capital requirement by using the collection, payment and duration of storage period assumptions.
Outputs:
• Executive Summary: Summary of the main KPIs, main drivers and Dynamic Charts
• Cases Overview: In this sheet the user can analyze all the scenarios side-by-side (the user must run the macro to update the scenarios)
• Hotel pro forma annual cash flow
• Hotel pro forma monthly cash flow
• Yearly Financial Statements: Yearly profit and loss account, Balance sheet and cash flow
• Monthly Financial Statements: Monthly profit and loss account, Balance sheet and cash flow
• Equity waterfall
• Cases Overview: In this sheet the user can analyze all the scenarios side-by-side (the user must run the macro to update the scenarios)


Should you have any questions, please feel free to contact.

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1 Excel Template