Boutique Hotel Break-Even Analysis: $128K Monthly Revenue

Fixed costs $45.5K/mo Monthly fixed base

Contribution margin 84% After variable costs

Break-even revenue $54.2K/mo Revenue target

Break-even timing Month 1 Model break-even

Break-even calculator

Test monthly room revenue against OTA fees, card fees, and the hotel's fixed cost base.

Lean Base Full

Monthly revenue Use total monthly sales before fixed costs. Revenue is what gives you room to cover overhead. $ Lower sales Higher sales Variable expenses These costs move with room sales, like OTA commissions and card fees. $ Lower costs Higher costs

Money available to cover fixed costs $247,072 $263,202 revenue - $16,130 variable expenses

Margin ratio

94%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base that profit has to cover first. $ Lower base Higher base

Break-even chart Revenue Total costs

Which hotel expenses stay fixed, and which move with room-night sales?

Cost classification

Break-even is only useful if fixed costs sit in the monthly hurdle and sales-linked expenses reduce contribution margin. Misclassifying payroll or commissions can make Month 1 break-even look safer than the room-night economics support.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Lease/Mortgage	Fixed	Include the full $25,000 per month in the break-even hurdle before counting any occupied rooms.	Treating rent as flexible because occupancy is low.
Property Taxes	Fixed	Include $4,000 per month as a fixed monthly charge across the planning range.	Leaving taxes below EBITDA and understating operating break-even.
Insurance	Fixed	Include $2,500 per month in fixed overhead because it does not move with bookings in the model.	Spreading insurance per room-night and hiding the monthly cash load.
OTA Commissions	Variable	Deduct 5.0% of room revenue from contribution margin in the first year.	Treating commissions as fixed hides margin pressure when bookings rise.
Credit Card Fees	Variable	Deduct 2.0% of sales because fees move directly with paid bookings and other card transactions.	Ignoring payment fees in the room-night margin.
Food & Beverage COGS	Variable	Deduct 8.0% in the first year from related revenue when calculating contribution.	Using room revenue only and overstating total margin.
Utilities	Semi-variable	Start with the $6,000 monthly base, then stress-test higher usage as occupancy rises from 60.0% to 85.0%.	Calling the full utility bill fixed and missing peak-season usage.
Front Desk Staff	Semi-fixed	Model salary in staffing steps: 3.0 FTE in the first year, rising to 4.0 FTE by the fourth year.	Treating all payroll as variable understates break-even risk.

How does break-even change from a lean to a full boutique hotel setup?

Scenario table

Higher room count, occupancy, and rate lift revenue faster than fixed costs, so the cushion improves as the hotel moves from lean to full. The lean case is closest to break-even; the full case gives the widest margin.

Planning case only; add-on income is forecast annually in the source model, so these monthly figures are directional.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$169.4k	$27.1k	$107.2k	84%	$35.1k	Thin cushion; a small dip can erase profit.
Base Year 3 case	$250.3k	$37.5k	$122.4k	85%	$90.4k	Clear cushion; revenue stays above break-even.
Full Year 5 case	$349.9k	$49.0k	$126.3k	86%	$174.6k	Strong cushion; the hotel absorbs cost swings better.

What breaks the break-even cushion for a boutique hotel?

Stress test

Here’s the quick math: baseline revenue of about $1.759M sits $483K above the $1.276M break-even line. But a 15% revenue drop, 10% higher fixed costs, and a 5-point margin hit nearly erase that cushion.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$1.276M	$483K cushion	Solid base case, but the cushion is not wide.
Revenue shortfall	Year 1 revenue falls 10% to about $1.583M.	$1.276M	$307K cushion	Slow direct bookings cut headroom fast.
Fixed-cost pressure	Fixed costs rise 10% from about $1.072M a year.	$1.403M	$356K cushion	Lease, payroll, or utility creep eats the buffer.
Margin pressure	Contribution margin slips from 84% to 79%.	$1.358M	$401K cushion	Higher commission mix pushes break-even up fast.
Combined pressure	Revenue drops 15%, fixed costs rise 10%, and margin falls to 79%.	$1.492M	$3K cushion	Almost no cushion if all three hits land together.

Is this boutique hotel ready to break even before you sign the lease?

Founder checklist

The hotel is only ready if the first 30 rooms, rates, staffing, and cash all hold at once. On paper, break-even starts in Month 1, but the Month 9 cash trough of -$1.504M is the real test before you sign the lease or fund renovation.

1Room Base30 rooms

Verify all 30 Year 1 rooms can sell from opening, because the 60% occupancy plan only works if the room base is truly rentable.

2Rate Test$200/$280

Test Standard at $200 midweek/$280 weekend, Deluxe at $280/$380, Suite at $450/$600, and Penthouse at $800/$1,100, and start spa, parking, event space, minibar, and laundry early so the launch mix is real.

3Direct Costs5.0% / 2.0% / 8.0%

Keep online travel agency commissions at 5.0%, card fees at 2.0%, and food and beverage COGS at 8.0%, because those direct costs hit contribution first.

4Monthly Load$107.2K/mo

Make sure the $25K property payment plus taxes, utilities, insurance, software, admin, security, maintenance, and wages can carry about $107.2K a month before room revenue ramps.

5Housekeeping4 FTE

Confirm 4 housekeeping FTE can turn occupied rooms without misses, and that front desk and guest service coverage can hold service quality at the same time.

6Cash Buffer-$1.504M / $2.76M

Hold enough cash for the $2.76M build and the -$1.504M Month 9 trough, or the ramp can stall before break-even has room to work.