150-Room Hotel Break-Even Analysis: About $215K/Month

Fixed costs $50.0K/mo Fixed base

Contribution margin 83% After variable spend

Break-even revenue $60.2K/mo Monthly target

Break-even timing Month 1 Forecast start

Break-even calculator

Test monthly hotel revenue against variable costs and fixed overhead to see when the property covers its monthly base.

Lean Base Full

Monthly revenue Revenue is the cash coming in each month from rooms and guest spend. $ Opening month Stabilized month Variable expenses These costs rise with occupancy, bookings, and guest turnover. $ Light volume Heavy volume

Money available to cover fixed costs $1,432,000 $1,566,000 revenue - $134,000 variable expenses

Margin ratio

91%

Covers fixed costs

Yes

Fixed monthly costs These are the monthly overheads the hotel must cover. $ Tight overhead Large overhead

Break-even chart Revenue Total costs

Which hotel expenses are fixed, and which move with room sales?

Cost classification

Break-even is only useful if fixed overhead, room-level spend, and staffing are separated. In the first year, fixed monthly overhead starts at $95,000 before wages, while several selling costs move directly with revenue.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Insurance	Fixed	Use $15,000 per month in the fixed overhead base.	Treating insurance as occupancy-driven when it does not move with room nights in the model.
Property Taxes	Fixed	Use $25,000 per month in the fixed overhead base.	Leaving taxes out of break-even because they are not tied to daily operations.
Utilities Base	Semi-fixed	Start with the $18,000 monthly base, then review usage as occupancy rises.	Modeling all utilities as fixed even when higher occupancy can push usage up.
PMS Software License	Fixed	Use $5,000 per month as fixed software overhead.	Spreading the license across rooms and understating required base revenue.
Online Travel Agent Commissions	Variable	Apply 7% of Year 1 revenue sold through commission channels.	Putting commissions in fixed overhead instead of reducing contribution margin.
Guest Supplies Amenities	Variable	Apply 3% in Year 1 as room volume and guest activity rise.	Assuming amenities stay flat while occupied room nights grow.
Food Beverage Supplies	Variable	Apply 5% in Year 1 against related sales activity.	Using total hotel revenue as the driver instead of related food and beverage sales.
Front Desk Staff and Housekeeping Staff	Semi-variable	Hold the base team, then step up FTE as rooms scale from 150 to 235.	Keeping labor flat even though front desk and housekeeping headcount rises with room count.

How does break-even change from a lean opening to a stabilized base and a mature hotel?

Scenario table

Higher occupancy and a richer room mix lift revenue faster than payroll and overhead rise. That widens contribution margin, so the base and mature cases carry a bigger cushion above break-even than the lean opening.

Planning assumptions only; actual results will move with demand, rates, staffing, and cost control.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$774k	$132k	$178k	83%	$464k	Revenue stays above the roughly $215k break-even base, so the cushion is solid.
Base stabilized case	$1.73M	$260k	$252k	85%	$1.22M	Sales sit far above the roughly $296k break-even base, so risk eases as scale builds.
Mature operating case	$2.12M	$276k	$273k	87%	$1.57M	Revenue clears the roughly $314k break-even base, giving the widest cushion.

What breaks first if hotel ramp is weaker than planned?

Stress test

Year 1 clears the $215k break-even line by about $559k/month, so the opening risk is ramp speed, not the base model. A 5-point occupancy miss cuts room revenue by about $60k/month, and a 1-point variable-cost rise can hit contribution by about $77k/month at $774k revenue.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$215,000	$559,000 cushion	Year 1 revenue stays well above break-even.
Revenue shortfall	Occupancy runs 5 points below plan in opening ramp.	$215,000	$499,000 cushion	About $60k/month of room revenue disappears before variable costs.
Fixed-cost pressure	Utilities, insurance, or property tax add $10,000/month.	$227,000	$547,000 cushion	Higher overhead lifts the break-even line fast.
Margin pressure	Variable expenses rise 1 point at current revenue.	$244,000	$530,000 cushion	Contribution falls by about $77k/month at $774k revenue.
Combined pressure	Occupancy is 5 points below plan and variable expenses rise 1 point.	$244,000	$470,000 cushion	Revenue and margin both weaken, but the model still clears break-even.

What must the founder verify before committing to the hotel build?

Founder checklist

Test the Phase 1 site, build, staffing, and launch plan against the break-even model before any major spend. The key check is whether the $25M buy, the $51.95M pre-opening stack, and the Month 10 cash trough can all be funded without breaking the operating plan.

1Funding Check$25M

Confirm the Phase 1 purchase is fully funded and the draw plan covers the $71.8M Month 10 cash trough before any acquisition money goes out.

2Build Stack$51.95M

Lock controls on the $40M construction period plus the $11.95M opening stack for furnishings, the property management system, kitchen, laundry, IT, spa, and meeting space.

3Occupancy Gate55%→82%

Verify the hotel can hold 55% occupancy in Year 1 and climb to 82% by Year 5, because the room count grows from 150 to 235 and weak early fill breaks the payback story.

4Margin Check$5.391M

Here’s the quick math: $85K in fixed monthly costs plus about $93.3K in Year 1 wages equals roughly $178.3K a month before variable costs, so pricing and channel mix need to hold Year 1 EBITDA near $5.391M.

5Staffing Ramp18→40 FTE

Hire against occupancy gates, not hope, because staffing grows from 18 FTE in Year 1 to 40 FTE by Year 5 and front desk plus housekeeping carry most of the labor risk.

6Launch Gating$250K

Do not fund the $250K launch marketing campaign until room rates are tested, the property management system is live, housekeeping and food and beverage are set, and the group sales pipeline can fill Month 10 openings.