The hotel debt diagnostic

Is your hotel's debt an operations, refinance, or capital-stack problem?

One confidential diagnostic scans every angle — coverage, leverage, maturity, rate, capex, the stack, and your exposure — and tells you where it hurts and what to do next.

Our tools are safe and confidential by design. No hotel financial data is stored. Ever.

Quick calculators

Run the numbers right here — no full diagnostic needed.

DSCR

Does the property cover its loan?

DSCR = NOI ÷ Annual debt service

Debt yield

Leverage, independent of rate.

Debt yield = NOI ÷ Loan amount × 100

NOI (net operating income)

Operating profit before debt.

NOI = Revenue − Operating expenses

Cap rate

Turns income into value.

Cap rate = NOI ÷ Value × 100

Loan constant

Annual debt cost per $1 borrowed.

Loan constant = Annual debt service ÷ Loan amount × 100

RevPAR

Revenue per available room.

RevPAR = ADR × Occupancy

Your capital stack, layer by layer

Who gets paid first if the property is sold or things go sideways.

Common (owner) equityPaid last · highest risk · keeps the upsidePreferred equityFixed return, paid before commonMezzanine / junior debtBehind the senior loanSenior mortgagePaid first · lowest risk · largest piecelast paidfirst paid

Understanding your hotel's debt and capital stack

The stack is an order of who gets paid

Your capital stack is every layer of money in the deal, ranked by priority: the senior mortgage is paid first, then any mezzanine or junior debt, then preferred equity, and finally your common equity. In a sale or a workout, each layer is paid in full before the next sees a dollar. The more layers above your equity — and the thinner the cushion between today's value and the debt — the more exposed you are if performance or value slips.

The numbers that tell you the truth

A few figures cut through the noise. Cash after debt service (NOI minus your annual payment) is what the property actually throws off. DSCR tells you and your lender whether operations cover the loan. Debt yield — NOI divided by the loan — is the rate-proof view lenders rely on. Together they reveal whether your pressure is an operations problem, a leverage problem, or both.

Where the real problem usually hides

Owners often assume the issue is the loan when it's actually operations — or assume operations can fix it when the capital stack itself needs to change. The honest answer depends on whether realistic NOI gains can close the gap, how close maturity is, and how much capex is looming. The diagnostic scans all of it at once, so you're not guessing which lever to pull.

Free calculators & guides

Questions, answered

What is a capital stack?
It's the layers of money in your deal, ranked by who gets paid first: senior mortgage, then any mezzanine or junior debt, then preferred equity, then your common equity. The order decides who recovers if the property is sold or things go sideways.
How do you calculate NOI (the NOI formula)?
NOI (net operating income) = total operating revenue − operating expenses, before debt service and capital expenditures. For a hotel: rooms, F&B, and other revenue, minus departmental and undistributed operating costs, the management fee, and a reserve — but not your mortgage. Example: $4,000,000 revenue − $2,600,000 operating expenses = $1,400,000 NOI.
What is debt yield, and what is the debt-yield formula?
Debt yield = NOI ÷ loan amount, as a percent. Example: $1,000,000 NOI ÷ $11,000,000 loan = 9.1%. Lenders use it as a rate-proof floor — often 9–10% — because, unlike DSCR, it ignores interest rate and amortization.
What is a loan constant?
The loan constant is annual debt service ÷ loan amount — the share of the loan you pay each year in principal and interest combined. Example: a $10,000,000 loan with $887,000 of annual debt service has a ~8.87% loan constant. It lets you size supportable debt from NOI and a target coverage.
What is DSCR?
Debt-service coverage ratio = NOI ÷ annual debt service. Below 1.0x means operations don't cover the loan; lenders typically want 1.25x or more. The diagnostic computes it and explains what yours means.
Do I have to upload my financials?
No. Our tools are safe and confidential by design — no hotel financial data is stored, ever. You can use estimates or ranges and skip any sensitive field.
Who is this for?
Owners, operators, and asset managers — whether you barely know DSCR or want a fast, lender-style stress test. There's a beginner path and an expert path.

Find out where your debt problem really is

Our tools are safe and confidential by design — no hotel financial data is stored, ever, and no property name is required. Get your diagnosis and an action roadmap in minutes.

Run the diagnostic

Common situations we see

If any of these sounds familiar, the tools above are built for it.

Revenue is fine but cash is tight

You're making money on paper but it never seems to reach your pocket — and you can't tell why.

You don't know your real numbers

DSCR, debt yield, supportable debt, equity cushion — you want them in plain English, without exposing sensitive financials.

Too many opinions, no clear picture

Lender, broker, CPA all say different things. You want one honest read of where you actually stand.

You're not sure what to fix first

Operations, the loan, capex, the whole stack — you need a sequence, not a pile of options.

What the diagnostic shows you

1

Where the problem is

A full scan rates every dimension red/amber/green so you don't have to guess which lens applies to you.

2

Who gets paid first

A capital-stack waterfall shows how much cushion your equity has and who's exposed if value falls.

3

A time-phased plan

What to do now, in the next 90 days, before maturity, and long term — tailored to your situation.

Want a second set of eyes?

Run the diagnostic first, then reach out — we'll help you turn the read into a plan.

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