Sustainable Hotel Break-Even Analysis: $938K Monthly Revenue

Fixed costs $75.9K/mo Base plus payroll

Contribution margin 81% After variable costs

Break-even revenue $93.8K/mo Revenue threshold

Break-even timing Month 1 Launch month

Break-even calculator

Test monthly revenue, variable expenses, and fixed costs against break-even for a sustainable hotel.

Lean Base Full

Monthly revenue Revenue sets the margin available to cover fixed costs. $ Lower sales Higher sales Variable expenses These are the costs that rise with room nights and guest spend. $ Lower costs Higher costs

Money available to cover fixed costs $311,900 $373,000 revenue - $61,100 variable expenses

Margin ratio

84%

Covers fixed costs

Yes

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

Break-even chart Revenue Total costs

Which hotel expenses are fixed, and which move with rooms sold?

Cost classification

If you classify these costs wrong, break-even looks safer than it is. Fixed and semi-fixed bills hit before rooms fill, while revenue-linked items flex with occupancy, so the model needs both to size cash and margin.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Insurance, $3,500/month	Fixed	Cover before profit in every month.	Tying it to occupancy.
Software Subscriptions, $1,200/month	Fixed	Pay even with empty rooms.	Treating it like booking volume.
Utilities Base, $4,500/month	Semi-variable	Model the base load plus guest usage.	Calling all utilities fixed.
General Maintenance, $3,000/month	Semi-fixed	Step up when asset base or service level changes.	Ignoring maintenance step-ups.
Organic F&B Supplies, 8% of revenue in Year 1	Variable	Move directly with sales volume.	Using a flat monthly amount.
Marketing & Booking Commissions, 6% of revenue in Year 1	Variable	Tie to revenue and channel mix.	Treating all marketing as fixed.
Cleaning & Laundry Services, 3% of revenue in Year 1	Semi-variable	Link to occupied rooms, with a minimum service floor.	Missing the labor floor.
Payroll, $58,250/month in Year 1	Semi-fixed	Schedule before full demand, then step up with staffing needs.	Treating all wages as variable.

How does break-even change from lean to base to full operations for this sustainable hotel?

Scenario table

Lean uses Year 1 demand and the lowest staffing load, so break-even is tightest there. Base and full cases lift revenue faster than fixed cost, which widens the cushion and lowers operating risk.

Planning assumptions only; capex, debt service, taxes, and reserves are outside this operating break-even view.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean opening case	$252.8k	$48.0k	$75.9k	81%	$128.8k	Above break-even, but early ramp still needs tight cost control.
Base stabilized case	$368.6k	$60.5k	$91.3k	83.6%	$216.9k	Revenue clears break-even with room to absorb steadier staffing.
Full premium case	$439.8k	$61.6k	$91.3k	86%	$287.0k	Highest cushion; premium occupancy gives more room for slow weeks.

What pushes this hotel below break-even?

Stress test

Base case breaks even in Month 1, but launch cash still hits the Month 6 low of -$129,000.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$93,800	$0 gap	Base case clears break-even, but cash still bottoms in Month 6.
Revenue shortfall	Monthly revenue is $10,000 below plan.	$93,800	$10,000 gap	If occupancy slips below the ramp plan, a $10,000 miss cuts contribution by about $8,100.
Fixed-cost increase	Utilities base rises by $4,500 a month.	$99,400	$5,600 gap	One utility jump adds about $5,600 to break-even.
Margin pressure	Variable expenses rise to 20% of revenue.	$94,900	$1,100 gap	Higher commissions and laundry costs push break-even to about $94,900.
Combined pressure	Variable expenses rise to 20% and fixed costs rise by $4,500 a month.	$100,600	$6,800 gap	Together, those pressures push break-even above $100,000.

Can this 55-room sustainable hotel really clear break-even before you sign the lease?

Founder checklist

Before you sign the lease, make sure the 55-room hotel can really carry $93.8K a month in operating revenue. The model shows Month 1 break-even, but the real go/no-go is whether occupancy, rates, fixed load, and launch cash all hold together through Month 6.

1Demand proof$93.8K/mo

Verify the 55-room plan can reach at least $93,800 in monthly operating revenue, because break-even only works if room nights and extra income actually show up.

2Occupancy plan55% / 908

At 55% occupancy, 55 rooms produce about 908 room nights a month, so confirm pickup before you hire and stock the property.

3Rate mix$220-$450

Test Year 1 midweek ADR at $220-$350 and weekend ADR at $280-$450 across room classes, because the revenue target depends on price discipline as much as occupancy.

4Margin check81% CM

With organic supplies at 8%, amenities at 2%, booking commissions at 6%, and cleaning and laundry at 3%, contribution margin is 81% before fixed costs.

5Operating load$76.0K/mo

Lock the $17.7K fixed monthly base and the Year 1 payroll of $58.25K a month before full ramp, because that $76.0K load hits from opening month.

6Launch reserve$1.66M / -$129K

Budget launch capex at $1.66M across solar, water recycling, furnishings, kitchen equipment, spa fit-out, EV charging, landscaping, systems and IT, and composting, then hold cash because minimum cash still falls to -$129K in Month 6.