Hotel Feasibility Study Template

What should a hotel feasibility study template include?

A hotel feasibility study template tests whether a specific hotel can create value above its development cost. Build it around eight connected modules: area and neighborhood, site, proposed concept, market, occupancy and ADR, financial projections, valuation, and value compared with total project cost.

This structure follows the hotel feasibility methodology published by H&L Advisors. Its approach uses demographics and demand generators, a site review, competitive hotel performance, supply-and-demand projections, operating projections, and discounted cash flow or direct capitalization.

Copy this report structure

• Executive decision: proposed location, room count, segment, opening date, assumptions, and go, revise, or no-go conclusion.
• Site and trade area: address, parcel constraints, access, visibility, utilities, zoning, and demand generators within a defined drive-time radius.
• Hotel market feasibility study report: existing supply, pipeline supply, competitive occupancy, ADR, RevPAR, segmentation, and seasonality.
• Proposed concept: brand or independent positioning, room count, room mix, amenities, food and beverage, meeting space, parking, and staffing.
• Performance forecast: annual occupied room nights, occupancy, ADR, RevPAR, other revenue, and market-penetration assumptions.
• Financial feasibility: departmental expenses, undistributed expenses, fixed charges, NOI before debt service, financing inputs, and sensitivity cases.
• Value and decision: stabilized NOI, capitalization or discounted-cash-flow value, development cost, and projected value-cost gap.
• Evidence register: source, retrieval date, market boundary, definition, and whether each input is observed, quoted, or assumed.

How do you build a hotel market feasibility study report?

Define the hotel’s realistic trade area first, then measure demand, existing rooms, future rooms, and direct competitors within that boundary. Explain why each comparable hotel is included and how its performance translates into the proposed hotel’s achievable occupancy and ADR.

H&L Advisors identifies STR market reports, interviews with competitive hotel management, and current supply-and-demand analysis as market-research inputs. If licensed hotel-performance data are unavailable, state the substitute source, coverage period, and limitation rather than treating public online rates as achieved performance.

Complete the market workbook in this order

• Map demand generators: employers, hospitals, universities, industrial parks, venues, attractions, airports, and road corridors. Capture distance, annual activity where published, peak periods, and guest segment.
• Build the competitive set: capture keys, segment, opening year, brand, amenities, meeting space, occupancy, ADR, RevPAR, reporting period, and source.
• Count pipeline supply: separate opened, under construction, final planning, and announced rooms. State which pipeline stages enter the base case.
• Segment room demand: allocate expected occupied rooms across corporate transient, leisure transient, group, contract, airline, extended stay, or relevant local segments.
• Forecast the subject: start with comparable performance, then state adjustments for location, brand, amenities, room mix, new-hotel ramp-up, and pipeline competition.

What formulas belong in a hotel feasibility study template?

The core model links rooms available to occupied rooms, occupied rooms to revenue, revenue to NOI, and NOI to value. Put every formula in visible spreadsheet cells or report notes so an investor, lender, or owner can recalculate the case from the assumptions page.

Worked 90-room hotel feasibility study example

Illustrative assumptions only, not market data: a 90-room select-service hotel reaches 72.0% stabilized occupancy at USD 160.00 ADR. RevPAR equals USD 115.20, and annual room revenue equals 90 x 365 x 72.0% x USD 160.00 = USD 3,784,320. Add other revenue equal to 10.0% of room revenue, or USD 378,432, for total revenue of USD 4,162,752.

If operating expenses are USD 2,580,000, illustrative NOI before debt service is USD 1,582,752. At an 8.5% direct capitalization rate, indicative stabilized value is USD 18,620,612. These numbers demonstrate the calculation only; occupancy, ADR, expenses, and cap rate must be supported by local evidence and investment assumptions.

How do you compare hotel development cost with hotel value?

A project becomes financially feasible only when projected value, after testing realistic costs and risk, supports the required investment. Compare a detailed project budget with income value, then test whether a performance decline, cost increase, or delayed opening changes the conclusion.

For a current U.S. reasonableness benchmark, HVS reported a USD 213,000 median development cost per room across surveyed hotel projects proposed or under construction during calendar year 2025; the survey was published in July 2026. HVS reported approximate segment figures of USD 200,000 per room for select-service, USD 265,000 for upscale extended-stay, USD 467,000 for full-service, and over USD 1.6 million for luxury.

In this worked example, the median-cost benchmark exceeds direct-cap value by USD 549,388 before project-specific adjustments. That does not prove the hotel fails: land cost, incentives, brand contribution, a higher ADR, lower construction cost, or a different valuation method may change the result. It does prove that the report should not call the project feasible without documenting those adjustments.

Run three sensitivity cases

• Downside: reduce ADR by 5.0%, reduce occupancy by 5.0 percentage points, increase total development cost by 10.0%, and delay opening by one year.
• Base case: use the most supportable market, cost, and opening assumptions with sources and dates.
• Upside: increase ADR or occupancy only where a specific demand generator, brand advantage, or supply constraint supports the improvement.

What does a hotel feasibility study example look like?

A useful hotel feasibility study example makes the recommendation traceable: it identifies the market, specifies the proposed property, shows comparable and pipeline supply, forecasts performance, and explains the value-cost conclusion. The strongest examples clearly separate historic evidence from forward-looking assumptions.

A real 2024 comprehensive study for Hiawatha, Iowa illustrates a practical report format. Its stated objective was to assess whether the city could support a new hotel and assist in attracting one. Its recommendation described an upper-midscale hotel with 80 to 90 guestrooms and a mix of king and double-queen rooms.

The Hiawatha report included community overview, executive summary, economic overview, lodging demand, lodging supply, lodging and competitive data, regional data, room-share overview, economic impact, and conclusion. Use this as a chapter-level example, but rebuild every market table and performance forecast for your own location and decision date.

What data do you need before using a hotel feasibility study template?

Collect site, market, concept, cost, and operating inputs before forecasting. A template becomes credible when its assumptions tab identifies the source, as-of date, unit, and owner of every number that affects occupancy, ADR, development cost, or value.

Quality-control checks before sharing the report

• Confirm rooms available equals room count multiplied by 365, adjusted only for documented closures or leap-year treatment.
• Confirm ADR, occupancy, RevPAR, and room revenue reconcile exactly in every forecast year.
• Confirm every competitor uses the same market boundary and reporting period.
• Confirm pipeline rooms are not double-counted across development stages.
• Confirm NOI is before debt service if it is used for income capitalization.
• Confirm the decision statement reflects the downside case, not only the base case.

How can AnyGen create a hotel feasibility study template?

Use AnyGen to turn site facts, competitive-set exports, cost estimates, and operating assumptions into an editable hotel feasibility study template with a consistent executive summary, market report, five-year model, sensitivity table, and source log. It helps structure the work; it does not replace local market verification or professional underwriting.

Give AnyGen these six inputs

• Site address, proposed opening date, room count, hotel segment, and planned amenities.
• Competitor table with property, keys, segment, occupancy, ADR, RevPAR, period, and source.
• Pipeline table with project, rooms, stage, expected opening, and confidence note.
• Demand-generator facts with source dates, including employers, venues, transport, and seasonality.
• Development budget with line items, currency, date, and contingency treatment.
• Five-year occupancy, ADR, expense, capitalization-rate, and financing assumptions marked as assumptions.

Ask for calculations to remain visible: RevPAR = ADR x occupancy; room revenue = rooms x 365 x occupancy x ADR; value = stabilized NOI divided by cap rate. Review the output against the source log, replace unverified assumptions, and have qualified local, tax, legal, construction, and finance advisers review decision materials.

Frequently asked questions