Error #1: confuse RevPAR with profitability
A high RevPAR does not guarantee profitability. Operating expenses, payroll and debt servicing can turn flattering turnover into a disappointing result. EBITDA and free cash flow remain the key indicators.
Too often, project promoters build their arguments around the market's pricing potential without modeling the full operating account. The decision engine TENEDIM allows you to pass from RevPAR to GOP in just a few minutes, with the load benchmarks per segment.
Error #2: underestimate renovation costs
Budget overruns in hotel rehabilitation average 22% based on our internal data. A contingency of 10 to 15 per cent must be included at the feasibility stage.
This error is all the more frequent since the initial figures are based on estimates before thorough technical diagnosis. Real cost only emerges after the analysis of structures, networks and standards.
Our perspective
Hotel feasibility is not a check box: it is the basis for rational decision-making. The 8 errors identified here are preventable, provided they are done early enough.