Net Operating Income (NOI) – A company’s operating income after operating expenses are deducted but before income taxes and interest are deducted. If this is a positive value, it’s referred to as net operating income, while a negative value is called a net operating loss. NOI often is viewed as a good measure of company performance. […]
Industry Terms – The Letter N/O/P Read More »
Manchised – hotel properties that are managed and franchised by the same company. Mark to Market – 1. A measure of the fair value of accounts that can change over time, such as assets and liabilities. Mark to market aims to provide a realistic appraisal of a company’s current financial situation. Problems can arise when the market-based
Industry Terms – The Letter M Read More »
Joint Venture – The cooperation of two or more individuals or businesses—each agreeing to share profit, loss and control—in a specific enterprise. This is a way for companies to partner without having to merge. JVs typically are taxed as a partnership. Lifestyle Brands – Prescribed franchised products that are adapted to reflect current trends. Limited-Service Hotel – Also known
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GOPPAR – Gross operating profit per available room. The metric measures performance across all revenue streams. Group Rooms – Group rooms are sold simultaneously in blocks of a minimum of ten rooms or more (e.g. group tours, domestic and international groups, association, convention and corporate groups). Hold Period – the timeframe that an investor owns a hotel; in
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EBITDA – earnings before Interest, taxes, depreciation, and amortization – similar to NOI, but excludes deductions for reserve for replacement; = NOI + Reserve for Replacement. EB-5 – an immigration program that provides a method of obtaining a U.S. visa by investing in the U.S. and creating new jobs within specified Regional Centers defined by the government;
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Debt – money owed by a property to entities other than the owner; typically, this is the mortgage, but may include other obligations (mezzanine loan, taxes, etc.) DCR – debt coverage ratio – debt service coverage ratio – the ratio of net operating income to annual debt payments; obviously, lenders want the property cash flow to be
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Our Co-Founder Jurgen Ortelee was lucky enough to have one of his very well written articles featured on Tnooz which is a global provider of news, analysis, commentary, education, data and business services to the travel, tourism and hospitality industry. We hope that you enjoy his article about what type of questions owners need to
Six Questions Hotel Owners Need to ask when Investing in a Revenue Solution Read More »
Capital Expenditure – Also known as CapEx. Money spent by a business to acquire or maintain fixed assets such as land, buildings and equipment. Capitalization Rate – The capitalization rate (or cap rate) for a hotel is used as a way to compare potential returns on various real estate investments. Different operating metrics can be used, however, net
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Bankruptcy A legal proceeding involving a person or business that’s unable to repay outstanding debts. The bankruptcy process begins with a petition filed by the debtor or on behalf of creditors. All of the debtor’s assets are measured and evaluated, whereupon the assets are used to repay a portion of outstanding debt. Upon the completion
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AAA The highest rating given to bonds by bond-rating agencies. AAA bonds are thought to have almost no default risk. ADR – Average Daily Rate A measure of the average rate paid for rooms sold, calculated by dividing room revenue by rooms sold. Average Daily Rate = room revenue / rooms sold ADR rate index
Industry Terms – The Letter A Read More »
