Tool built 22 Aug 2026
Hospitality Revenue & ROI Calculator
See exactly what return your hotel, B&B, guest house or holiday let will generate — cap rate, cash flow, break-even occupancy and 5-year growth, in real time.
AI Investment Analysis
Selecting a type pre-fills typical industry values. Adjust all figures to match your specific property.
Annual revenue from food, beverages, events, and other income streams
Includes staff, utilities, maintenance, insurance, marketing, and management fees
Key Results
Cap Rate
27.7%
NOI ÷ Price
Cash-on-Cash
66.5%
Cash Flow ÷ Cash Invested
Overall ROI (Yr 1)
75.8%
Inc. appreciation
Break-Even Occ.
50.0%
To cover opex
Investment Summary
- Loan Amount
- £650,000
- Annual Debt Service
- £52,666
- Total Cash Invested
- £275,000
- Annual Appreciation
- £25,500
- Payback Period
- 1.5 years
5-Year Projection
| Year | Property Value | Cum. Cash Flow | Total Equity |
|---|---|---|---|
| 1 | £875,500 | £182,954 | £408,454 |
| 2 | £901,765 | £365,908 | £617,673 |
| 3 | £928,818 | £548,862 | £827,679 |
| 4 | £956,682 | £731,815 | £1,038,498 |
| 5 | £985,383 | £914,769 | £1,250,152 |
This calculator provides indicative figures only and does not constitute financial advice. Actual returns depend on market conditions, operational efficiency, and many other factors. Consult a hospitality property specialist for a detailed investment appraisal.
How to Interpret Your Results
Cap Rate
Net Operating Income divided by the purchase price — your unlevered return if you bought in cash. Compare it to the market mean below: 8%+ signals a strong deal, below 5% suggests overpricing or untapped value-add potential.
Cash-on-Cash Return
Annual cash flow divided by the actual cash you invested (deposit + closing + renovation costs). This is calculated after financing costs, so it shows the real return on the money that left your bank account.
Payback Period
How many years of cash flow it takes to recover your invested capital. The shorter the payback, the lower your exposure to market downturns — a critical figure for weighing one investment against another.
Why Occupancy Rate is the Key to Hospitality Growth
Most hospitality investors obsess over the nightly rate — but occupancy rate is the metric that quietly determines whether a property thrives or fails. A guest house charging £150 a night at 45% occupancy earns less than one charging £110 at 75%, and the second business also enjoys steadier cash flow, better staff utilisation and stronger word-of-mouth. Occupancy compounds: every filled room generates ancillary revenue from food, drinks and extras that an empty room never can.
Occupancy also drives the two numbers lenders and buyers scrutinise most: RevPAR (revenue per available room) and break-even occupancy. If your break-even sits at 50% and you trade at 72%, you have a 22-point safety cushion — small seasonal dips will not push you into a loss. If break-even and actual occupancy sit within a few points of each other, the business is fragile no matter how impressive the headline rate looks.
When you review your calculator results, look at the gap between your projected occupancy and your break-even figure first. Widening that gap — through better photography, sharper listings, dynamic pricing and direct-booking strategies — is usually cheaper and faster than physical refurbishment, and it improves every downstream metric: cash flow, cap rate, payback period and ultimately the resale value of the business itself.
Average Success Rates in Britain & Europe
| Metric | UK Average | European Average |
|---|---|---|
| Hotel occupancy rate | 75–78% | 70–73% |
| Average daily rate (ADR) | £115–£130 | €100–€120 |
| Cap rate (hospitality) | 5.5–8.5% | 5.0–8.0% |
| Operating expenses (% of revenue) | 55–70% | 50–65% |
| Break-even occupancy | 45–55% | 45–55% |
Indicative industry averages — use these to benchmark your calculator results against the market mean.
How to Use the ROI Calculator
Input Your Property Data
Enter purchase price, room count, ADR, occupancy and operating expenses for your property type.
Adjust Your Variables
Fine-tune financing terms, renovation budget and growth assumptions to match your goals.
View Projected Growth
Review cap rate, cash-on-cash return, break-even occupancy and a full 5-year equity projection.
Benchmark & Plan
Compare your figures against the UK and European averages and build them into your business plan.
Investment Video Guides
Free Hospitality ROI Calculator App | Calculate Hotel, Restaurant & Hospitality Investment Returns
Use the free Hospitality ROI Calculator App to estimate return on investment for hotels, restaurants, guest houses, holiday lets, pubs, holiday parks, and other hospitality businesses. Compare scenarios, evaluate profitability, and make more informed investment decisions before buying, selling, or expanding.
Who is this Calculation For?
Short-term Rental Owners
Model seasonal occupancy fluctuations and see how rate and occupancy changes affect your annual return.
Property Managers
Produce clear, data-backed projections for reporting to landlords and investors.
Hotel Owners
Analyse the cost-benefit of room upgrades, extensions and refinancing before committing capital.
Frequently Asked Questions about the Hospitality ROI Calculator
Turn Your Results Into Action
Photos hurting your ROI?
Low occupancy usually starts with weak imagery. Virtually furnish and style your rooms to lift click-through rates and bookings.
Try AI Virtual StagingResults suggest high vacancy?
Cluttered listing photos make rooms look smaller and cheaper. Clean them up with AI in seconds.
Use the AI Photo CleanupNumbers look investable?
Turn your projections into a professional, investor-ready business plan in minutes.
Generate a Business PlanReady to buy?
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Open toolDisclaimer: All figures produced by this tool are for estimation and guidance purposes only and do not constitute financial, investment or valuation advice. Results are based on the data you provide and indicative industry benchmarks; actual performance will vary. Always seek advice from a qualified accountant, surveyor or specialist hospitality agent before making investment decisions.