How Underwrite handles Hotel.
Hotels are a revenue-management asset class. The engine handles them as a per-key business: revenue is monthly-revenue-per-key (which the AI parser computes from ADR x 30 x occupancy when the source breaks them out separately), and the property-type lens surfaces ADR, Occupancy, RevPAR, and Cost per Key in the Operating Snapshot instead of generic 'units' and 'rents'. Property management runs higher (5-15%) because of brand fees, OTA commissions, and active management.
What the engine surfaces natively
On any Hoteldeal, the in-tool Operating Snapshot replaces generic schema labels with the asset class's native vocabulary:
- Keys. Room count. Stored in the residentialUnits schema slot by convention.
- ADR (estimated). Average Daily Rate, computed as monthlyPerKey / 30.
- Occupancy. 1 minus vacancy. Note: when ADR x occupancy is baked into monthlyPerKey, set vacancy to 0 to avoid double-counting.
- RevPAR. Revenue per Available Room = ADR x Occupancy. The canonical hotel KPI.
- Cost / Key. Purchase price divided by key count. Compares directly to industry benchmarks ($150-500K/key for typical full-service, $80-200K for limited-service).
Property-type-aware validation bands
Validation guards in lib/engine/validation.ts use these tighter bands for Hotel instead of the generic defaults:
- Property management % of EGI: 5-15%. Hotel property management includes brand royalty, marketing fund, central reservation, loyalty, and franchise fees. Real hotels often run 10-12%, vs 2-6% for most other asset classes.
- Reserves % of EGI: Hotels can legitimately run 4%. FF&E reserve requirements written into franchise / management agreements.
Asset-class stress scenarios
The ScenarioBar surfaces these stress overlays when Hotel is the current property type:
- Hotel Demand Shock. Occupancy -10pp, ADR -10%, exit cap +75bps. Models a recession or post-event demand collapse on hotel revenue per key.
- All four generic stress scenarios (Base, Recession, Rate Spike, Aggressive) are also available on Hotel deals.
Example deal: Pioneer Square Boutique Hotel
The Hotel pre-built example computes to the headline values below. Click into the tool to edit any input and watch the engine recompute live, or open the IC memo to see the full deterministic output.
Current model boundaries for this asset class
These are the Hotel-specific institutional features Underwrite deliberately routes to analyst review today. The full list across all asset classes is at /methodology/beyond-phase-1.
- FF&E reserves are folded into the generic reserves line rather than a dedicated 4-5% capex stream.
- Brand and management fees are aggregated into property management instead of split into royalty, marketing fund, central reservation, loyalty, and management fees.
- F&B revenue is rolled into other-income instead of split rooms / food-beverage / banquet / parking / ancillary.
- Group vs transient mix is not modeled; ADR and occupancy are aggregate inputs.
- Seasonality is annualized; real hotels run monthly RevPAR with seasonality indices.