Reading a Hotel Balance Sheet

[Matthew Sampallo]

Hello All,

I was recently offered an opportunity to become part owner on a hotel property in the states. I need to review BS and PL but I’m  wondering if there is anything in particular I should be looking for on the financials, particularly on the BS as I don’t have experience in the hotel industry. Any help is appreciated! 

[Shiv Patel]

GP meaning Gross Profit? So it really depends on the deal and sponsor. Typically we'd like to be at 35% NOI margins on our hotels. However, we focus on the limited service space. If your in full-service/resort properties, the margins will be around 25% or so because of the increase in overhead in F&B.