Hotel ROI: How to maximises your hotel investment

What is hotel ROI?

Hotel ROI means return on investment, which evaluates how much money you are getting out compared to what you put in. The aim is to generate a positive ROI, which you can then use to grow and improve the business or take out as profit. Generally recorded as a percentage, it’s a vital financial metric for hoteliers to track if they want to make sure their objectives are being met.

Return on investment formula

As we mentioned above, the return on investment formula is ROI = (Net Profit / Amount Invested) x 100.

An example of the ROI equation for hotels looks like this:

A hotel generates a net profit of $100,000 on an investment of $500,000.

ROI = (100,000 / 500,000) x 100 = 20%

This means that the hotel is generating a 20% return on the investment.