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Hotel Feasibility
Pick a typical Indian hotel — budget, midscale, upscale or resort — and get a plain-language verdict with 2025-26 Indian benchmarks: CapEx per key, RevPAR, EBITDA, IRR, payback. Every number is yours to change.
Live model
Total CapExEverything it takes to build — land, stamp duty, construction, FF&E, contingency and construction-period interest.
₹50.3 Cr
Project IRRAnnual return of the hotel itself, before any loan — compare to your hurdle rate.
10.3%
Equity IRRAnnual return on the money you put in, after paying the bank.
11.8%
Pick a preset or set the six decisions, read the verdict — then fine-tune any assumption below. Export or share a live link to this exact model.
A 60-key hotel at ₹50.3 Cr (₹83.9 L/key) runs a 36% EBITDA margin and pays back in 12.2 yr at 11.8% equity IRR. Full breakdown below.
Your project
Start from a typical Indian hotel, then adjust the six decisions that drive the whole model: how many rooms, what they sell for, how full the hotel runs, how much food & banquets add, what it costs to build, and how it's funded. Everything else — land, fees, tax, exit — has sensible Indian-market defaults you can fine-tune below.
State tourism policies can change this picture — capital subsidies, industry-status power tariffs and infrastructure-list lending all improve returns.Several states (UP, MP, Rajasthan, Gujarat) grant hotels 'industry' status — industrial power tariffs plus 15–30% capital subsidies under their tourism policies. Budget 2025-26 also put hotels in the top-50 tourist destinations on the infrastructure lending list (cheaper, longer loans). Stabilized RevPAR at these settings: ₹3,850/room/night.
What it costs & what it returns
Live results — every number updates instantly as you change anything, here or in the fine-tune sections below.
Building this 60-key midscale hotel costs ₹50.3 Cr all-in (₹69.8 L per key excluding land — within the typical ₹65 L–₹75 L for midscale). Once established (around year 3) it earns ₹13 Cr a year and keeps ₹4.66 Cr as operating profit (36% EBITDA margin — Indian chains run 30–40%). The investment pays back in 12.2 yr and returns 10.3% on the project / 11.8% on your equity over 15 years (including the sale at exit) — falling ₹3.56 Cr short of your 11% hurdle rate.
Bottom line: Marginal — works, but with little cushion
Total investmentEverything it takes to build — land, stamp duty, construction, FF&E, pre-opening, contingency and interest paid during construction.
₹50.3 Cr
₹69.8 L / key ex-land
Within typical ₹65 L–₹75 L/key
Revenue / yr (established)Annual billing once occupancy stabilizes — rooms plus F&B/banquets. RevPAR is room revenue per available room per night (all-India branded ADR for context: ₹8,624).
₹13 Cr
RevPAR ₹3,850
EBITDA / yrOperating profit before loan interest, depreciation and tax, at stabilized occupancy.
₹4.66 Cr
36% margin
Within typical 30–40%
PaybackYears until the project's cumulative cash flow covers the investment (before financing).
12.2 yr
Above typical 8–12 yr
Project IRRAnnual return of the hotel itself, before any loan — compare it to your hurdle rate. Includes the sale at exit.
10.3%
Equity IRRAnnual return on the money you put in, after paying the bank. Borrowing amplifies this — both ways.
11.8%
NPVToday's value of all future cash flows minus the investment, at your hurdle rate. Positive = the project creates value.
-₹3.56 Cr
Peak equity neededThe largest cheque your own capital must cover before the hotel starts paying it back.
₹25.2 Cr
Min DSCRWorst-year cash cover on loan payments (cash earned ÷ amount owed the bank that year). Indian lenders want ≥ 1.3×.
1.23×
Equity multipleTotal cash returned per rupee of equity invested, over the whole hold.
4.94×
Terminal value (exit)Sale value at the end of year 15: final-year EBITDA ÷ 8% cap rate. Hotels are terminal-value-driven — this is a big share of the return.
₹105 Cr
Break-even occupancyOccupancy below which the project destroys value (NPV < 0).
75%
Cumulative cash flow — payback
Occupancy ramp to stabilization
Fine-tune
Every assumption below is editable — the verdict updates live.
Build cost (CapEx)
₹50.3 Cr all-in · ₹69.8 L/key ex-land · land ₹8 Cr + 6% stamp duty
Running cost (OpEx)
55% of revenue + 2% base / 7% incentive fees → 36% stabilized EBITDA margin
Revenue & financing
50% debt @ 10.5% · 14-yr loan · exit @ 8% cap → equity IRR 11.8%
Operations, energy & ESG
15,330 room-nights/yr · 6,13,200 kWh · 435.4 t CO₂e/yr
Charts
CapEx mix · payback curve · earnings trend · occupancy ramp · DSCR — six charts
Stress test
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Hotel model summary