Hotel as an Investment – The 5 most important metrics for your purchase decision

Buying a hotel can be an attractive way for investors to generate strong returns. For a hotel property to deliver long-term success, it is not enough to consider only location and facilities. The most important factor is understanding the financial performance. Key metrics reveal how profitable a hotel really is and whether the purchase will pay off. 

The occupancy rate shows how well the hotel is booked throughout the year. A consistently high rate indicates stable demand. The Average Daily Rate (ADR) measures the average price per room per night and is essential for calculating revenue. When combined with occupancy, it produces the Revenue per Available Room (RevPAR), which reflects the revenue per available room and is a useful benchmark for comparing different hotels. 

Another critical figure is the Gross Operating Profit per Available Room (GOPPAR), which measures operating profit per room. This helps investors assess the property’s real profitability. For long-term projections, the Net Operating Income (NOI) is vital, as it shows the net profit after all operating expenses. 

Anyone planning to buy a hotel as an investment should carefully examine these metrics and compare them with similar properties on the market. They are the key to understanding both opportunities and risks and to realistically calculating potential returns. 

Would you like to know which hotel projects currently offer the best performance indicators? Contact us. As specialists in the worldwide sale of exclusive hotel properties, we support you in selecting and evaluating the right investment opportunities. 

DIANIUM COMMERCIAL, your partner for the brokerage of hand-picked hotel properties, is at your side in every area of the hotel industry.