Return on hotel investment

The return on hotel investment refers to the degree of return on investment. The simple algorithm is: return on investment = income/investment ×100%; Generally, the profit of a well-run hotel is about 10%, and it takes about 10 years to recover the cost. Therefore, hotels need to stick to business after investment, and it will take a long time to make a profit.

The return on investment of hotels generally depends mainly on the income of rooms. Different types of rooms are priced differently, and everything except rooms is unprofitable. Investors must make a good budget before deciding whether to invest in order to avoid poor profitability.

Due to the low threshold of hotel investment compared with other types of investment, the competition is very fierce, which is easy to cause market surplus. At this time, it is difficult to guarantee the later income. When investing, you can choose a better brand to join, so that you can gain the trust of customers.

When investing in hotels, we should generally pay attention to the building area, the number of rooms, the total investment, the average occupancy rate and the average house price. These projects must be carefully accounted for when investing in the early stage. Only in this way can we know the expected return after investment. If the investment cost is too high, you must be cautious at this time.

Total yield can be divided into dividend income and price change: total yield: r = (income/initial investment+price change/initial investment) * 100% = (income+price change)/initial investment * 100%.

Rate of return: Generally speaking, the rate of return means that the income obtained after the input cost is higher than the previous cost, and the result is the rate of return. Interest paid in installments on bonds and the current market price of bonds.

Return on capital refers to the ratio of funds invested or used to relevant returns (returns are usually expressed as interest earned and/or shared profits). Used to measure the use effect of the invested funds. Return on capital (ROIC) is an index used to evaluate the historical performance of a company or its institutions. Discounted cash flow, as we know, determines the final (future) value of any company, and is also the most important index to evaluate the company.

However, in the short term, cash flow is not so useful for evaluating the company's performance, because it is easy to be manipulated. For example, delay cash payment, postpone advertising activities, or cut research and development expenses. The return on capital is a lagging indicator, that is, the information it provides reflects the company's historical performance.