Feasibility model · Free, no signup
Hotel feasibility
Planning a hotel or resort and need the numbers for a bank loan? Pick a hotel like yours, see what it costs to build, when it pays back, and whether it can carry the loan. Then change any number to match your plan.
- Starts from typical Indian numbers. Change any of them.
- Download a spreadsheet, print it, or share a link
- A planning check on your numbers, not a bank’s decision
Total investmentEverything it takes to open: land and stamp duty, construction, furniture and equipment, pre-opening costs, a buffer for surprises, and loan interest during construction.
₹50.3 Cr
Project return (IRR)The yearly return of the hotel itself, before any loan and including the sale at the end. Compare it with the return you need (your hurdle rate).
10.3%
Return on your moneyEquity IRR: the yearly return on the money you put in yourself, after loan repayments. Borrowing makes it swing more, both ways.
11.8%
Pick a starting point or set the six key numbers, read the result, then fine-tune anything below. Download, print or share a link to this exact model.
With 60 rooms, this hotel costs ₹50.3 Cr to build (₹83.9 L a room), keeps a 36% operating margin, pays back in 12.2 years and returns 11.8% a year on your own money. The detail is below.
A planning check on the numbers entered, not a lender’s decision. Banks run their own appraisal.
Your project
Start from a hotel like yours, then set the six numbers that drive everything: how many rooms, the room rate, how full the hotel runs, how much food and banquets add, the construction cost and how much you borrow. Everything else (land, operator fees, tax, the sale at the end) starts at a typical Indian figure you can change further down.
Pick a starting point. Each one is an illustration built from typical Indian numbers, not a recommendation and not ClarWorks data. Change anything after.
State tourism policies can change this picture: capital subsidies, industrial power tariffs and cheaper infrastructure loans all improve returns.Several states (including UP, MP, Rajasthan and Gujarat) give hotels industry status under their tourism policies: industrial power tariffs plus 15–30% capital subsidies. The 2025–26 Budget also added hotels in the top 50 tourist destinations to the infrastructure lending list, which means cheaper, longer loans. Revenue per available room (RevPAR) at these settings, once busy: ₹3,850 a night.
What it costs and what it returns
These update as soon as you change any number. The “usual” ranges are rough planning ranges from public sources, not ClarWorks data and not a promise.
Building this 60-room midscale hotel costs ₹50.3 Cr all in, or ₹69.8 L a room before land (within the usual ₹65 L–₹75 L for a midscale hotel). Once it is busy (around year 3) it earns ₹13 Cr a year and keeps ₹4.66 Cr as operating profit, a 36% margin (the usual range for Indian hotels is 30–40%). It pays back in 12.2 yr (usual range 8–12 years) and returns 10.3% a year on the whole project and 11.8% a year on your own money over 15 years, including selling the hotel at the end. That is ₹3.56 Cr short of the 11% a year you set as your minimum return.
Bottom line: Tight: it works, with little room for error
Total investmentEverything it takes to open: land and stamp duty, construction, furniture and equipment, pre-opening costs, a buffer for surprises and loan interest during construction.
₹50.3 Cr
₹69.8 L a room before land
Inside the usual ₹65 L–₹75 L a room
Yearly revenue, once busyWhat the hotel bills in a year once occupancy settles: rooms plus food and banquets. This is the top line, not take-home. RevPAR is room revenue per available room a night (for context, the all-India average room rate for branded hotels is about ₹8,624).
₹13 Cr
RevPAR ₹3,850
Operating profit a yearEBITDA: profit from running the hotel, before loan interest, depreciation and tax, in a settled year.
₹4.66 Cr
36% margin
Inside the usual 30–40%
PaybackYears of operation until the cash earned covers what went in, before any loan.
12.2 yr
Above the usual 8–12 yr
Project return (IRR)The yearly return of the hotel itself, before any loan and including the sale at the end. Compare it with the minimum return you want (your hurdle rate).
10.3%
Return on your moneyEquity IRR: the yearly return on the money you put in yourself, after loan repayments. Borrowing makes it swing more, both ways.
11.8%
Value above your hurdle (NPV)Net present value: all future cash in today’s money, minus the investment, at your minimum return. Above zero means the project beats it.
-₹3.56 Cr
Your money at peakThe most of your own money that is in the project at any point before the hotel starts paying you back: the cheque you must be able to write.
₹25.2 Cr
Lowest loan cover (DSCR)Debt service coverage ratio in the worst year: cash available ÷ loan repayment. Indian banks usually look for 1.3× or more; below 1.0 the hotel can’t pay its EMIs from its own cash.
1.23×
Money back per ₹1 you put inEquity multiple: total cash returned to you for every rupee of your own money, over the years modelled.
4.94×
Sale value at the endTerminal value: what the hotel could sell for at the end of year 15, the last year’s operating profit ÷ a 8% exit yield (cap rate). For hotels this is a big share of the return.
₹105 Cr
Break-even occupancyHow full the hotel must be, in a settled year, just to earn your minimum return. The closer this is to your expected occupancy, the thinner the cushion.
75%
Cash position over time
How full the hotel gets
Fine-tune the assumptions
Each section below opens to show the detail. Change any number and the result above updates straight away.
Set-up cost (CapEx)
₹50.3 Cr in total · ₹69.8 L a room before land · land ₹8 Cr plus 6% stamp duty. Open to change land, construction and each cost line.
Running costs (OpEx)
Running costs 55% of revenue · operator fees 2% of revenue plus 7% of gross operating profit · 36% operating margin once busy. Open to change costs, fees and yearly increases.
Loan, tax and the year-by-year P&L
50% loan at 10.5% over 14 years · sold at a 8% exit yield · 11.8% a year on your money. Open for the ramp-up, loan terms, tax and the profit and loss for every year.
Rooms sold, energy and carbon
15,330 room-nights sold a year once busy · 6,13,200 kWh of power · 435.4 tonnes of CO₂ a year. Open for rooms, rates, power, water and carbon.
Charts
Where the money goes, when it pays back, profit over time, revenue against running costs, how full the hotel gets, and loan cover.
Stress test
What breaks the case first? Move one number (room rate, occupancy, costs and more), see which matters most, change two at once, or work back from the return you want.
Compare scenarios
Save the numbers you have now as a scenario, change them, save again, and compare side by side. Saved scenarios stay in this browser tab only.
Advisory · Project report and bank finance
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