How a Hotel Is Valued: Price per Key, EBITDA, Multiple

A hotel is valued by price per key, by EBITDA multiple and by the yield a lease gives. Price per key is for a quick estimate, but it takes no account of profit, the licence or the condition of the building. A proper valuation starts from EBITDA after the renewal reserve and then converts it into a price through a capitalisation rate.

What price per key shows

Price per key is the deal price divided by the number of rooms. It is a guide, not a valuation. According to HVS (June 2025), the Hesperia Barcelona del Mar (84 rooms, about 22 M€) sold at roughly 262,000 € a key, and the Barceló Raval (186 rooms, reportedly about 70 M€) at roughly 376,000 €. I calculated the price per key myself. That is a spread of almost one and a half times within one city in three months. In the same HVS review, Barcelona ranked fourth in Europe by price per key in 2024 after London, Paris and Madrid, and the value of a key rose by 3.7% but in real terms stayed below the 2019 level.

Why the spread is so wide: price per key hides the category, room size, the share of common areas, the length of the licence, the condition of the building and whether the business was sold with the operator or the building was sold empty. Two hotels with the same price per key can earn twice as differently.

How to get from EBITDA to a price

Hotel EBITDA is calculated under USALI: operating costs are deducted from revenue (giving GOP), then the operator's fee and fixed charges (property tax, insurance). The reserve for replacing furniture and equipment (FF&E reserve) is usually deducted separately to get the owner's real cash flow. What these lines mean is shown in the article on the operator's report.

After that a simple formula applies: price equals income divided by the capitalisation rate. The EBITDA multiple is the same quantity inverted: a rate of 5% corresponds to a multiple of 20, a rate of 6.5% to about 15.4.

Which rate. CBRE gives a prime hotel lease yield in Barcelona of 5.00% at the end of 2025 (4T 2025). That figure is for the best properties on a lease, not a market average. For a hotel where the owner bears the operating risk, the rate is usually higher, but I did not find a specific figure in an open source, so the example gives it as an assumption.

Worked example, not a forecast

Assumptions: 50 rooms, revenue 4 M€, GOP 35% (1.4 M€), operator's fee 3% (120,000 €), fixed charges 6% (240,000 €), FF&E reserve 4% (160,000 €). That gives EBITDA of 1.04 M€ and cash flow after the reserve of 880,000 €. The capitalisation rate is applied to 880,000 €.

One percentage point of rate changes the price by 14–17%. So deals are argued not over rooms but over the rate and how solid the 880,000 € flow is.

What breaks the calculation

• Last year's EBITDA is not next year's. The buyer values a stabilised flow: the seller takes higher figures, the buyer lower ones. On seasonality see the article on Barcelona's seasonality.
• Licence and PEUAT. In zones where new hotels cannot open, a valid licence is worth money in itself. How the plan works is in the piece on PEUAT.
• The building. If investment is needed, it is deducted from the price. The budget items are covered in the piece on reconstruction.
• The operator contract. A long management contract with termination penalties reduces the value to a buyer. The terms are in the article on lease and management.
• Prime yield is not your yield. The CBRE figure describes the best properties and leases, not any hotel.

Who this approach does not suit

It does not suit you if there are no operator accounts for several years: without them EBITDA stays an assumption. It does not work for a building without a valid licence, where what is valued is a development project, not a business. The general framework of hotel project indicators is given in the article on hotel KPIs. You can sketch the deal's own economics in the calculator.