Use an integrated monthly operating, capital and financing model—not a revenue forecast with a sale value attached. Our recommended structure separates assumptions from calculations and reconciles every distribution to actual available cash.
HVS identifies market performance, physical condition, management, contracts and future potential as distinct acquisition-review areas. The model should preserve those distinctions rather than bury them in a single growth assumption. (website.hvshotelmanagement.com)
Recommended workbook structure
- Source register: document, date, page or cell, owner and confidence.
- Historical reconciliation: reported accounts mapped to a consistent chart of accounts.
- Room revenue: monthly inventory, out-of-order rooms, occupancy, ADR and customer/channel mix.
- Other departments: separate food and beverage, parking, spa, events and other activities.
- Staffing and operating costs: fixed positions, variable hours, wage assumptions and supplier costs.
- Contractual charges: management, affiliation, central services and escalation provisions.
- Capital schedule: payments, room outages, reopening and revenue ramp.
- Financing: draws, interest, amortization, fees, reserves and maturity.
- Cash and distributions: restricted versus unrestricted balances and minimum operating cash.
- Exit and sensitivities: sale costs, debt repayment and alternative outcomes.
Build explicit checks for room-night capacity, sources equaling uses, reserve-account movements and the debt balance at sale.
The most useful model test: change the reopening date by three months. If financing costs, room availability, staffing, working capital and distributions do not all respond, the model is not sufficiently integrated.