Dr. Paul Borosky, DBA, MBA
Business Plan Writer & Financial Projections
How to Write a Hotel or Motel Business Plan
A Full House at the Wrong Rate Is Still a Thin Month.
Hotels and motels earn on occupancy and room rate together, and lose on high fixed costs and booking fees. Business plan writer Dr. Paul Borosky, DBA, MBA, shows you how to plan demand, rates, channels, staffing, and debt so the property works in slow months too.
Last Updated: 11/09/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Version
What Does a Hotel Business Plan Need to Prove?
Short Answer
A hotel or motel plan has to prove there is enough demand around the property, that your occupancy and average daily rate together cover housekeeping, staff, utilities, booking fees, and debt, and that you have a plan for slow seasons. Show occupancy, ADR, RevPAR, channel mix, and debt coverage.
RevPAR = occupancy × average daily rate
Doctor Owl, in Plain English
“A room sold too cheap still needs fresh sheets.”
How This Guide Works
Each question below covers one part of a hotel plan and what lenders check. Magnus the Moose, an innkeeper from the world of Dr. Paul’s Fabled Forest Business School Series, shows up in short gold notes. The room-night math sits in one marked section.
Buying, Building, or Repositioning a Hotel?
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Business Plan Writing
FeaturedA lender-ready hotel plan with demand, ADR, occupancy, staffing, and debt coverage, written by Dr. Paul.
Start your plan →Hotel or Motel Template
Industry Word plans and Excel models you can adapt to a hotel or motel.
See the template →Business Consulting
Rooms full but cash tight? Dr. Paul reviews your rates, channels, and costs.
See consulting options →Small Business Education
Free guides, videos, and the Fabled Forest books on marketing and pricing.
Start learning →From Dr. Paul’s Fabled Forest
Meet Magnus: Room for Everyone, at Any Price
In the north woods, Magnus the Moose runs Birchbark Rest Inn. He is big-hearted and never turns a traveler away. His welcome: “There’s always room at the lodge.”
The inn is nearly full most nights. Magnus is not sure why the loan payment still feels heavy. Doctor Owl checks in and asks to see the rate sheet.
Section 1
How Do You Describe the Property?
Describe the property: number of rooms, room types, amenities, parking, condition, and any brand or franchise. If you are buying, give the property’s history and recent performance. List licenses and inspections, plus property, liability, and business interruption insurance. Explain any renovation plan and its timeline.
In the Fabled Forest
Magnus has forty rooms and one very old boiler. Doctor Owl adds the boiler to the first page of the plan.
Section 2
Where Does Demand Come From?
Name your demand generators: highways, hospitals, universities, business parks, tourist spots, and events. Describe guest types, such as business travelers, families, crews working nearby, and weekend visitors, and when each comes. Map competing properties with their rates and reviews. Lenders want to see demand by season, not just a yearly average.
In the Fabled Forest
Magnus’s busiest guests are the logging crews, who stay all week. He has never offered them a weekly rate. Doctor Owl writes “crew rate” in big letters.
Section 3
How Do You Set Rates and Booking Channels?
Explain your rate strategy by season and day of week, with weekend, event, and long-stay pricing. Show your channel mix: direct bookings, online travel agencies, phone, and group contracts. Online agencies bring guests but charge commissions, so show how you will grow direct bookings with your own website and repeat guest offers.
In the Fabled Forest
Most of Magnus’s bookings come through the traveling crow’s booking board, which keeps a big share of every room. Doctor Owl suggests a sign at the desk: book direct next time.
Section 4
How Do You Plan Staff and Operations?
Plan front desk coverage, housekeeping by rooms cleaned per shift, maintenance, and laundry. Show your property management system, cleaning standards, and how you will respond to reviews. Reviews drive bookings, so describe how you will earn good ones.
In the Fabled Forest
Magnus has great reviews for kindness and poor ones for cold showers. Doctor Owl points at the boiler again.
Section 5
How Do You Plan Startup Costs and Cash Flow?
Build revenue from rooms times occupancy times ADR, by month. Show housekeeping per occupied room, labor, utilities, booking commissions, franchise fees if any, insurance, property taxes, repairs, and debt service. Include purchase or renovation costs and a reserve for replacing furniture and equipment. The funding request guide explains the ask.
In the Fabled Forest
Doctor Owl shows Magnus that a slightly higher rate with the same guests would pay for the new boiler in a year.
The Numbers
How Much Does a 40-Room Motel Make per Month?
Example numbers only. Assumptions: 40 rooms, 68% occupancy, a $112 average daily rate, housekeeping at $24 per occupied room, and 35% of revenue booked through online agencies at a 17% commission.
| Line | How it is figured | Monthly |
|---|---|---|
| Room nights sold | 40 × 30 × 68% | 816 |
| Room revenue | 816 × $112 | $91,392 |
| RevPAR | 68% × $112 | $76.16 |
| Housekeeping | 816 × $24 | $19,584 |
| Booking commissions | 35% of revenue × 17% | $5,438 |
| Front desk and management | Wages and payroll costs | $6,800 |
| Utilities | Power, water, gas, internet | $7,200 |
| Insurance | Property and liability | $2,800 |
| Debt service | Mortgage payment | $26,000 |
| Other | Repairs, supplies, software, taxes | $5,200 |
| Cash flow before owner pay | Revenue minus all costs | $18,370 |
Step 1: Total costs. $73,022 a month
Step 2: Rate lever. A $10 higher rate on the same 816 nights adds $8,160 a month
Step 3: Channel lever. Moving 10% of revenue from online agencies to direct saves about $1,550 a month
Step 4: Your version. Build a slow-season month with lower occupancy. Make sure it still covers debt
For a real example, see how Dr. Paul planned a front desk manager buying the Virginia Beach inn she ran on the Virginia Beach business plan writer page.
Illustrative numbers. Rates, occupancy, and costs vary by market and season.
In the Fabled Forest
Magnus raises his rate by a little and adds a crew rate for the loggers. The inn stays full. The boiler gets replaced.
Watch
Watch: How to Write a Hotel or Motel Business Plan
Dr. Paul goes through a hotel or motel business plan on video.
Step by Step
How Do You Write a Hotel Plan, Step by Step?
Six steps from property to financing.
Describe the property.
Rooms, amenities, condition, and brand.
Map demand by season.
Who comes, when, and why.
Set rates and channels.
By season, with a direct booking plan.
Plan staffing and upkeep.
Housekeeping, front desk, and repairs.
Build occupancy and ADR.
Monthly revenue, costs, and RevPAR.
Write the request and summary.
Purchase, renovation, and reserves.
In the Fabled Forest
Doctor Owl’s note on the front desk: price the room for what it is worth, not for who is asking.
Go Deeper
Where Can You Learn to Fill Rooms at the Right Price?
Rates, channels, and reviews are marketing decisions. Dr. Paul’s Fabled Forest Business School teaches marketing through Doctor Owl and owners who learn to be found by the right guests.
Every chapter includes a one-page worksheet.
A Business Consultant’s View
Where Do Hotel Plans Go Wrong?
Dr. Paul Borosky, DBA, MBA · Business Plan Writer
Hotel plans Dr. Paul reviews often show a high yearly occupancy and ignore booking commissions, housekeeping per room, and slow months. Lenders want ADR, occupancy, and RevPAR by month, plus debt coverage. He works through Organize-Plan-Grow™: organize demand and real costs by season, plan rates and channels around them, then grow with renovations that raise the rate the property can earn.
FAQ
What Do Hotel Owners Ask About Their Business Plan?
What is RevPAR?
What occupancy does a hotel need to break even?
Should a small hotel join a franchise?
What do lenders want in a hotel plan?
Keep Going
What Other Hospitality Plans Work the Same Way?
Want Dr. Paul to Write Your Hotel or Motel Plan?
Dr. Paul writes hotel and motel plans with demand analysis, ADR and occupancy forecasts, and full projections for lenders and investors.
Written by Dr. Paul Borosky, DBA, MBA, business plan writer.
Education only. Not legal, tax, or financial advice. Figures are examples. Fabled Forest characters are fictional.