How long does it take for a hotel to become profitable?

+1 vote
asked Feb 24, 2018 in Other-Finance by FelixFrost (270 points)
How long does it take for a hotel to become profitable?

I want to buy a hotel that is for sale and hopefully make a profit.

How long should I expect to wait before I start seeing a profit from the hotel?

1 Answer

0 votes
answered Feb 24, 2018 by Lilly21 (57,780 points)
Profit will come when you make more money per day or month than you pay your employees or the mortgage and other expenses on the hotel.

Expect it to take around 2 years before you start to profit a little and a full on 5 or even 10 years to see a good profit from the hotel.

You should put as much of the income from the hotel into paying off the hotel and into your hotel expenses.

If you can get the mortgage paid off on the hotel you'll see a better profit since you won't have the hotel mortgage expense and then that money can go back into your own pocket instead of the banks.

Do expect 10 years at the longest for the hotel to profit but it can come much sooner depending on how many people you can get to stay in your hotel.

Do keep in mind though Profit is when you make more money than what the business costs you to run each day or month.

So if your income from the hotel is more than you have to pay out for expenses even if you still have the bank to pay each month then you're profiting from the hotel or other business even if you profit $1.00 per day.

If you have $1.00 left each day after paying the other expenses then that is your profit even if it's very little.

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