Hotel Hold vs Sell Decision Model: sell the hotel now or hold it 3, 5 or 7 more years
Full description
For owners, asset managers, general managers and financial controllers who have an offer on a hotel and must decide whether to take it. The workbook turns the broker offer into net proceeds today after selling costs, prepayment penalty, debt repayment and capital gains tax at an editable rate. It then builds the equity cash flows of holding for 3, 5 or 7 more years: NOI with growth, required capex, debt service, and a later sale at forward NOI over the exit cap for that horizon, net of costs, debt, penalty and tax on the gain. Because holding means leaving today's proceeds in the hotel, those proceeds are the Year-0 outflow of every hold option. The model reports NPV vs selling at the owner discount rate, the IRR of holding, the equity multiple and the break-even exit cap that makes holding and selling equal, solved in closed form. A one-case-per-row engine re-runs all horizons 29 times for a NOI growth x exit cap grid and a best-option grid, with no data tables or macros.
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What is inside
- Hotel_Hold_vs_Sell_Decision_Model.xlsx: 11 tabs, 1,555 formulas, 2 native charts, 9 drop-down and input rules, 12 integrity checks, a Method tab with 16 calculation notes.
- Sell_Now: offer to net proceeds today, market value at the market cap rate, implied cap rates and taxable gain.
- Hold_Cash_Flows: Years 0 to 7 of NOI, capex, debt service, cash flow to equity, the exits at 3, 5 and 7 years and the hold cash flows.
- Hold_vs_Sell: NPV, IRR, equity multiple, break-even exit cap and cushion for each horizon, the best option and every solve step.
- Sensitivity: NPV of the selected horizon and the best of 4 options for 25 combinations of NOI growth and exit cap.
- Dashboard (11 KPI tiles, a check tile, a net proceeds waterfall and an NPV by horizon chart) and a one-page IC_Summary with notes and sign-off lines.
- Hotel_Hold_vs_Sell_Decision_Guide.docx and Hotel_Hold_vs_Sell_Decision_Guide.pdf: 10-page guide with the decision framework, every input, the method in plain equations, a worked example on the sample results, how to decide, common mistakes, limitations, an investment committee memo template, a checklist and a glossary.
- README.txt and LICENSE-and-Terms.txt.
How it works
- Enter NOI and growth, the offer, selling costs, debt terms, exit caps, tax inputs and the discount rate.
- Enter required capex and the prepayment penalty by year.
- Read net proceeds today and the hold cash flows by year.
- Compare NPV, IRR and break-even exit cap for 3, 5 and 7 years, then stress the answer on the grids.
- Complete the IC summary and confirm the Checks tab shows ALL OK.
Details
- Formats: XLSX workbook, DOCX guide, PDF guide.
- Language: English.
- Software: Excel 2016 or later, or LibreOffice Calc. No macros, no data tables, no add-ins.
- Annual equity model in any currency, horizons of 3, 5 and 7 years.
- Delivery: instant download.
Good to know
- Sample data is illustrative and does not describe any hotel or market. Replace it with your own figures.
- Not investment, financial, legal or tax advice. The capital gains tax rate and tax base are inputs: verify local requirements and confirm them with your tax adviser.
- Cash flows are after debt service and before income tax on operations.
- Single-user license.
FAQ
Why is today's net sale proceeds the starting outflow of the hold case?
Because holding means not taking that cash. The hold option has to earn your required return on the money you leave in the hotel.
What is the break-even exit cap?
The exit cap rate at which holding and selling today are worth the same at your discount rate. The gap to your assumed exit cap is the cushion in basis points.
Can I model an interest-only loan?
Yes. Set the remaining amortisation to 0 and the debt service becomes interest only.
Does it include income tax on hotel profits?
No. It models the capital gains tax on a sale today and at each exit. Income tax on yearly operations is left out; the guide explains how to treat it.
Can I hold for 4 or 10 years?
The horizons are fixed at 3, 5 and 7 years. Other horizons need extra columns in the cash flow and engine tabs.
