How do i calculate break even for a hotel?

Question

I want to calculate the Break even for a newly build Five Star Hotel in Shanghai which has got 440 rooms, 3 Restaurant and Three Meeting Rooms.

Answer 1

annual revenue equals annual costs

Answer 2

break even is the point where profit equals overheads - leaving nil net profit

Answer 3

In order to calculate a break-even revenue stream of a hotel, you should have some basic knowledge of the underwriting of such an asset. As the hotel is new construction, you should try to get some market understanding of what the expenses are for the market. Additionally, you should find out occupancy levels for the sub-market and the asset type (three stars), this will help you determine what the RevPAR or revenue per available room should be for the new hotel. Once you know projected expenses for the new hotel. and the RevPAR, you'll be able to determine the break-even level.

Answer 4

Hire a firm that will estimate you expenses and the actual expected influx of customers and their spending, plus area room prices, etc.