How Much Do Hotels Usually Sell For?

Are you considering buying or selling a hotel or motel and wondering how much they usually sell for? Understanding the valuation multiples for a hotel or motel is crucial in determining its market value. In this blog post, we will explore the different valuation multiples such as REV, EBITDA, and SDE to give you a better idea of what to expect when buying or selling a hotel or motel.

Valuation Multiples for a Hotel or Motel

Valuation multiples are commonly used in the hospitality industry to determine the value of a hotel or motel. These multiples are based on financial metrics and provide a benchmark for buyers and sellers to assess the worth of a property. Let's take a closer look at the three main valuation multiples:

REV Multiples for a Hotel or Motel

REV, or Revenue Multiple, is a valuation metric that compares the selling price of a hotel or motel to its annual revenue. This multiple is often used to gauge the property's income-generating potential. A higher REV multiple indicates a higher expected return on investment.