Solar-Powered Hotel Break-Even Analysis: $167K Monthly Revenue

Fixed costs $134.5K Monthly overhead base

Contribution margin 80.5% After variable costs

Break-even revenue $167.1K Monthly revenue target

Break-even timing Month 1 Launch month

Break-even calculator

Test whether monthly revenue covers variable expenses and fixed monthly costs.

Lean Base Full

Monthly revenue Higher revenue gives more room to cover fixed costs. $ Low sales High sales Variable expenses These are direct costs that rise with revenue. $ Low costs High costs

Money available to cover fixed costs $480,700 $516,000 revenue - $35,300 variable expenses

Margin ratio

93%

Covers fixed costs

Yes

Fixed monthly costs This monthly base must be covered after variable costs. $ Lean overhead Heavy overhead

Break-even chart Revenue Total costs

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

Cost classification

Classifying each expense right keeps the break-even point honest: fixed items set the monthly hurdle, while variable and staffing-linked items reduce contribution margin as occupancy rises. Don’t treat solar savings as pure profit.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Taxes	Fixed	Use $15K/month in fixed overhead before calculating the room-night break-even target.	Linking taxes to occupancy instead of treating them as a monthly hurdle.
Property Insurance	Fixed	Use $8K/month as fixed overhead across the planning range.	Leaving insurance out because it doesn’t tie to guest volume.
Solar System Maintenance	Fixed	Use $5K/month as fixed overhead tied to keeping the energy system operating.	Treating solar savings as pure profit while ignoring maintenance and batteries.
Software Subscriptions	Fixed	Use $2.5K/month as fixed overhead for operating systems and subscriptions.	Scaling software with rooms sold when the model lists it as a monthly amount.
F&B Ingredients	Variable	Apply the first-year 10.0% rate against food and beverage sales when measuring contribution margin.	Applying ingredient expense to total hotel revenue instead of related sales.
Online Travel Agency (OTA) Commissions	Variable	Apply the first-year 5.0% rate to booked revenue that flows through commissionable channels.	Charging commissions on direct bookings and understating contribution margin.
Utilities (Backup/Water/Waste)	Semi-variable	Start with the $4K/month base, then watch usage as occupancy rises from 55.0% to 82.0%.	Calling utilities fully fixed even when occupied rooms drive water and waste usage.
Housekeeping Staff	Semi-fixed	Model staffing in steps as FTE count rises from 5.0 in the first year to 8.0 by the fourth year.	Using one flat labor number while room turns increase with occupancy.

How does break-even change from a lean launch year to a full operating year?

Scenario table

As occupancy rises from 55% to 82% and ADR steps up, revenue grows faster than the cost base. Fixed payroll and property costs also rise, so the cushion improves, but the opening case still carries the most break-even risk. Capex and financing sit outside this view.

Operating break-even only; capex and financing are separate planning layers, not part of this table.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean case: Year 1 launch	$414K	$81K	$135K	80.5%	$198K	Above break-even, but the first year has the tightest cushion.
Base case: Year 3 stabilized	$612K	$111K	$153K	81.8%	$348K	Strongest cushion; revenue comfortably clears fixed costs.
Full case: Year 5 mature	$697K	$122K	$195K	82.5%	$380K	Still ahead of break-even, though staffing keeps fixed costs high.

What breaks first if occupancy slips or solar savings miss the mark?

Stress test

Year 1 still clears break-even, but occupancy and variable costs are the first weak spots. If bookings soften, booking commissions rise, or battery reserve and repair spend climbs, the break-even line moves up fast and the cushion shrinks.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	Year 1 revenue holds near $414K/month.	$167K	$247K cushion	Fixed overhead stays covered with room to spare.
Revenue shortfall	Revenue drops 15% to about $352K/month.	$167K	$185K cushion	Lower occupancy cuts the buffer first.
Fixed-cost increase	Fixed costs rise 10% to about $148K/month.	$184K	$230K cushion	More staffing and upkeep push break-even higher.
Margin pressure	Variable expenses rise from 19.5% to 24.5%.	$178K	$236K cushion	Booking commissions and repairs eat more of each dollar.
Combined pressure	Revenue drops 15%, fixed costs rise 10%, and variable expenses hit 24.5%.	$196K	$156K cushion	The plan still works, but the safety margin tightens.

Can this hotel carry the build and still break even before you commit to the site and solar package?

Founder checklist

Before you sign the site and solar capex, make sure the 60-room mix can hold 55% Year 1 occupancy at about $351 blended ADR and still carry the $134.5K monthly fixed load. The model shows $2.246M Year 1 EBITDA, but cash still bottoms at -$33.22M in Month 12.

1Room Mix30/20/8/2

Verify the 30 standard, 20 deluxe, 8 suite, and 2 villa mix can still support 55% Year 1 occupancy at about $351 blended ADR, or the room plan misses the base case.

2Fixed Load$134.5K/mo

Check that the hotel can carry about $134.5K a month in fixed load, including $5K solar maintenance, and confirm site control plus utility interconnection before ordering solar gear.

3Margin CheckYear 1 EBITDA $2.246M

Use Year 1 EBITDA of $2.246M as the margin test: room sales plus F&B, spa, events, retail, and energy credits must clear operating costs after OTA commissions and supplies.

4Staffing Ramp17 FTE

Hire to the Year 1 plan of 17 FTE and $900K payroll, because service slips if you underbuild staff and cash leaks if you overbuild it.

5Cash Cushion-$33.22M @ M12

Hold enough reserve for the Month 12 cash trough of -$33.22M, since the $36.3M capex stack lands long before the hotel is stable.

6Launch Demand$414K/mo

Only launch once marketing can support about $414K in Year 1 monthly revenue, or occupancy won't stay high enough to protect break-even.