A pro forma is a financial projection that estimates a hotel's future performance over a specific period. It's an essential tool for investors, lenders, and hotel operators to evaluate the financial viability and potential return on investment of a hotel property.
Our Hotel Pro Forma Builder helps you create professional financial projections by inputting key assumptions about your property and automatically calculating detailed revenue, expense, and profitability forecasts.
Definition: The average revenue earned per occupied room per day.
Formula: Total Room Revenue ÷ Number of Occupied Rooms
Why it matters: ADR indicates pricing power and market positioning. Higher ADR suggests premium positioning or strong demand.
Definition: The total revenue generated per available room, whether occupied or not.
Formula: ADR × Occupancy Rate
Why it matters: RevPAR is the industry's key performance indicator, combining both occupancy and rate performance into a single metric.
Definition: The income generated from hotel operations after operating expenses, but before debt service and taxes.
Formula: Total Revenue - Operating Expenses
Why it matters: NOI determines the property's ability to generate cash flow and service debt. It's the primary metric lenders use to evaluate loan capacity.
Definition: The percentage of available rooms that are occupied during a given period.
Formula: (Occupied Rooms ÷ Total Available Rooms) × 100
Why it matters: Occupancy rate indicates demand levels and market penetration. Higher occupancy suggests strong market demand or competitive pricing.
Shows how your hotel's total revenue is projected to grow over time, including:
Tracks your hotel's profitability over the projection period, showing:
Displays the relationship between your key performance metrics:
Illustrates how operating costs are distributed across different categories:
Evaluate potential returns, assess risk levels, and compare different hotel investment opportunities with standardized financial projections.
Present professional financial projections to banks and lenders to secure financing with clear, data-driven business plans.
Plan staffing levels, budget for maintenance, and set realistic revenue targets based on market conditions and property characteristics.
Track actual performance against projections to identify trends, adjust strategies, and optimize operations for better results.
Start creating professional financial projections for your hotel investment today.
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