Historical Hotel Break-Even Point: About $179K Monthly Revenue

Fixed costs $147.8K Monthly overhead base

Contribution margin 82.5% After variable costs

Break-even revenue $179.2K Monthly revenue target

Break-even timing Month 1 Launch break-even

Break-even calculator

Test monthly room and ancillary revenue against variable and fixed costs to see how close the hotel is to break-even.

Lean Base Full

Monthly revenue Revenue is the top line that has to cover variable costs first, then fixed costs. $ Low revenue High revenue Variable expenses These are the direct costs that rise as bookings and guest spend rise. $ Low costs High costs

Money available to cover fixed costs $500,903 $593,487 revenue - $92,584 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

Fixed monthly costs This is the monthly cost base contribution margin has to cover. $ Lower base Higher base

Break-even chart Revenue Total costs

Which expenses are fixed, and which move with occupied rooms?

Cost classification

Break-even is useful only if monthly overhead stays separate from guest-driven spend. Keep the $30.25M opening capex out of operating break-even, then test rooms sold against fixed and step-up operating expenses.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Insurance	Fixed	Use $15,000 per month as recurring overhead from Month 1 through Month 60.	Tying insurance to occupancy instead of treating it as base property overhead.
Utilities	Semi-variable	Model the $12,000 monthly base, then track usage pressure as occupied rooms rise.	Calling all utilities fixed and missing higher use in peak occupancy periods.
Building Maintenance	Fixed	Use $20,000 per month as planned recurring upkeep for the building.	Putting restoration capex into monthly maintenance and overstating break-even spend.
Cleaning Services	Semi-variable	Start with the $10,000 monthly service level, then flex for occupied-room volume.	Modeling cleaning as fully fixed even though room turns rise with occupancy.
Food Beverage Costs	Variable	Apply the first-year 9.0% rate to related sales and let it move with guest spend.	Using it as flat overhead instead of linking it to restaurant and bar sales.
Guest Amenities	Variable	Apply the first-year 2.5% rate to revenue tied to guest stays.	Spreading amenities evenly across months without regard to occupied rooms.
Sales Commissions	Variable	Apply the first-year 2.5% rate to sales volume in the break-even model.	Counting commissions before revenue exists, which understates contribution margin.
Front Desk Staff	Semi-fixed	Use $135,000 per year in the first year, then step staffing up as FTE rises.	Treating payroll as purely variable when coverage is needed even at low occupancy.

How does break-even change across lean, base, and stronger historical hotel months?

Scenario table

Higher occupancy and ADR lift revenue faster than variable costs, while payroll adds to fixed load as the hotel scales. Against the $179,192 target, the cushion widens from lean to full.

Planning assumptions only; actual results will move with mix, rates, and staffing.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean historical hotel month	$354,341	$62,010	$147,833	82.5%	$144,498	Above target, but this is the tightest cushion.
Base historical hotel month	$453,162	$75,225	$163,042	83.4%	$214,895	Above target with a solid cushion.
Stronger historical hotel month	$554,788	$86,547	$180,333	84.4%	$287,908	Well above target and least exposed to shortfalls.

What breaks first if bookings soften or fixed costs rise?

Stress test

Year 1 break-even is $179,192 a month on an 82.5% contribution margin. The plan stays healthy at forecast levels, but occupancy below 55%, ADR pressure, or higher insurance, utilities, maintenance, and cleaning costs can erase the cushion fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$179,192	$261,970 cushion	The plan clears break-even, but it still needs stable occupancy and ADR.
Revenue shortfall	Occupancy falls to 20% instead of 55%.	$179,192	$18,770 gap	That slips below the roughly 27% room-revenue threshold after ancillaries, so break-even is no longer covered.
Fixed-cost pressure	Property insurance, utilities, building maintenance, and cleaning each rise 20%.	$193,010	$248,152 cushion	Costs move up, so the hotel needs more monthly revenue just to hold the line.
Margin pressure	Variable load rises from 17.5% to 22.5% of revenue.	$190,754	$250,408 cushion	Higher commissions or marketing spend eat into each dollar of sales.
Combined pressure	Occupancy falls to 20% while fixed costs rise 20% and variable load rises to 22.5%.	$205,462	$45,039 gap	Soft bookings and heavier costs combine to push the hotel below break-even.

Can this historic hotel clear break-even before you commit to the building?

Founder checklist

Yes only if the 55-room mix holds, approvals and building condition are clean, and you can fund the $30.25M capex plus a Month 9 cash low of -$27.241M. Year 1 also needs 16 FTE and at least $179.2K monthly revenue to clear the base load.

1Room Mix55 rooms

Verify the 55 salable rooms are real, with 20 Classic King, 15 Heritage Suite, 2 Presidential Suite, 10 Garden View, and 8 Courtyard Room, because the revenue model depends on that mix.

2ApprovalsPre-signoff

Get a high-level preservation and zoning read before you sign, because a historic asset can stall the opening if the use is not clear.

3Capex Plan$30.25M

Order a building condition report before signing, then confirm the $30.25M capex plan still covers acquisition, restoration, rooms, food and beverage, spa, tech, parking, and marketing.

4Staff Ramp16 FTE

Confirm Year 1 staffing reaches 16 FTE and about $147,833 per month before variable costs, because that is the floor break-even has to cover.

5Cash Cushion-$27.241M

Plan for the Month 9 cash low, since the project needs enough reserve or outside capital to survive the heaviest spend period.

6Channel Revenue$179.2K/mo

Pressure-test booking channels so monthly room and ancillary revenue can reach at least $179,192, because that is the demand level that makes the opening load believable.