Hotel & Hospitality Financing: How Lenders Underwrite (RevPAR, ADR, EBITDA)
Quick answer: Lenders underwrite hotels on operating performance, not just the real estate. The metrics that matter: RevPAR (ADR × occupancy), the property’s EBITDA and flow-through, the brand/flag and any required PIP (property improvement plan), and debt-service coverage typically around 1.4x+. Because hotel cash flow is volatile, leverage is conservative (often 55–65% LTV) and recourse […]
