Condo Hotel Break-Even Point: $71K Monthly Revenue Needed

Fixed costs $63.1K/mo Monthly overhead

Contribution margin 89.2% After variable costs

Break-even revenue $70.7K/mo Needed each month

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly room revenue, direct expenses, and fixed costs against break-even for a condo hotel.

Lean Base Full

Monthly revenue Revenue sets the margin pool that pays fixed costs. $ Lower rev Higher rev Variable expenses These rise with occupied rooms and guest spend. $ Lower costs Higher costs

Money available to cover fixed costs $609,556 $644,464 revenue - $34,908 variable expenses

Margin ratio

95%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base break-even must cover. $ Lower base Higher base

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a condo hotel break-even model?

Cost classification

For break-even, include recurring operating costs and exclude capex, debt service, owner distributions, income taxes, and reserves unless shown below operating profit. Here, fixed overhead plus first-year payroll is about $63,050 per month before variable percentages.

Expense	Cost	Break-Even Treatment	Common Mistake
PMS & Software Fees	Fixed	Include $3,000 per month in the Month 1 overhead base.	Treating software as a per-booking charge.
Utilities Common Areas	Fixed	Include $4,500 per month for shared spaces.	Pushing all utility burden to guests or occupied units.
Common Area Maintenance	Fixed	Include $3,500 per month as recurring operating overhead.	Confusing routine upkeep with owner-funded capital work.
Marketing Branding	Semi-fixed	Include the $3,500 monthly baseline; add campaigns only when shown.	Assuming marketing scales only with rooms sold.
Front Desk Payroll	Semi-fixed	Plan 2.0 Front Desk Staff FTE plus 1.0 Front Office Manager FTE, about $11,667 per month.	Treating all desk payroll as variable with occupancy.
Housekeeping Labor	Semi-variable	Plan 3.0 staff FTE plus 1.0 supervisor FTE in the first year, about $12,917 per month.	Ignoring the base supervisor role when rooms are slow.
OTA Commissions	Variable	Apply 4.5% of revenue in the first year.	Applying the commission rate to direct bookings.
F&B Cost of Sales	Variable	Apply 3.0% in the first year based on the model assumption.	Moving food and beverage costs into fixed overhead.

How does break-even change from a lean opening to a fuller condo hotel?

Scenario table

As rental pool participation and service needs rise, housekeeping and front desk coverage push fixed costs up, but occupancy and ADR rise faster. All monthly revenue math below uses a 30-day planning month.

Planning figures are model-based assumptions, not guarantees.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$336K	$36K	$63K	89.2%	$236K	Still above break-even; about $71K covers fixed costs.
Base scale case	$1.07M	$104K	$81K	90.3%	$886K	Break-even sits near $89K, so the cushion is strong.
Full operating case	$1.04M	$91K	$94K	91.3%	$858K	Full scale gives the widest cushion, with break-even near $103K.

What would push a condo hotel below break-even?

Stress test

The base case clears break-even with a wide cushion, but it gets pressured fast if occupancy drops, common-area and insurance costs climb, or owner units leave the rental pool. That’s the real break point.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change in revenue, variable costs, or fixed overhead.	$71K	$264K cushion	Base case has a wide cushion.
Revenue shortfall	Monthly revenue falls 15% to about $285K.	$71K	$214K cushion	Still clears break-even, but occupancy softness cuts room for error.
Fixed-cost pressure	Fixed overhead rises 10% to about $69K.	$78K	$257K cushion	Higher HOA, utilities, or insurance costs eat into the buffer.
Margin pressure	Variable expenses rise 3 points to 138%.	$73K	$262K cushion	Distribution commissions and payroll inflation can squeeze margin.
Combined pressure	Revenue falls 15%, fixed overhead rises 10%, and variable expenses rise to 138%.	$81K	$204K cushion	The plan still clears break-even, but the cushion gets much thinner.

What should you verify before you sign the management contract for a condo hotel?

Founder checklist

Before you commit, make sure the unit mix, occupancy ramp, and rate plan can carry the fixed cost stack. If any of those three slip, the break-even math stops working fast.

1Unit mix67 units

Verify the opening inventory totals 67 rooms across studio, one bed, two bed, suite, and penthouse units, or update the mix before you sign.

2Occupancy path55% to 82%

Test the ramp from 55.0% in Year 1 to 82.0% in Year 5, because the model only works if sold nights keep climbing.

3ADR spread$180-$700 / $220-$850

Check midweek and weekend ADR by unit type, from $180 to $700 midweek and $220 to $850 on weekends, so rate strength matches the room mix.

4Contribution margin89.2% CM

Year 1 variable costs total 10.8% from F&B cost of sales, guest supplies, OTA commissions, and repairs, so keep the contribution margin (CM) near plan.

5Cost stack$63.05K/mo

Lock the $19.3K monthly fixed overhead and about $43.75K a month in Year 1 payroll before you commit to staffing, rental pool, or insurance terms.

6Launch cash$944K + $230K

Keep the Month 1 minimum cash need of $944K visible, set PMS, booking, housekeeping, and accounting systems before opening, and hold the $230K pre-opening capex separate from operating cash.