Hotel Loans

Price Per Key in Commercial Real Estate

Price Per Key in Commercial Real Estate

In hotel construction and acquisition, price per key is a metric that compares the amount of money spent on building or aquiring the hotel with the amount of rooms, or keys, in the hotel. To determine price per key, simply use the formula below: 

Total Hotel Construction or Acquisition Cost/Total Number of Rooms (Keys) = Price Per Key 

RevPar: Revenue Per Available Room in Commercial Real Estate

RevPar: Revenue Per Available Room in Commercial Real Estate

RevPar, or revenue per available room, is a measure of a hotel's financial performance, which can be calculated by dividing a hotel's total room revenue by the amount of available rooms. Another easy way to calculate RevPar is to multiply a hotel property's ADR (average daily rate) by its occupancy rate

ADR: Average Daily Rate in Commercial Real Estate

ADR: Average Daily Rate in Commercial Real Estate

Average Daily Rate, or ADR, is one of the most important metrics that hotels use in order to determine the income and profitability of a property. ADR can be determined by dividing the entire rental income for a day by the number of occupied rooms on a property. For example, if a hotel made $50,000 in one day, as a result of 100 rooms being rented, their ADR for that day would be $500.