What owners ask, answered plainly.

Hotel asset management is the work of representing the owner’s financial interest in a hotel. The operator runs the hotel day to day. The asset manager checks that it is run in a way that grows the owner’s return and protects the value of the property.

In practice that means reading the monthly accounts, challenging the budget, tracking the hotel against its competitors, overseeing capital spending, and holding the operator to the management agreement.

The operator is paid mainly on revenue and gross operating profit. The owner earns what is left after fees, reserves, debt and capital spending. Those interests overlap, but they are not identical.

The general manager works for the operator. The asset manager works only for the owner and reads every decision from the owner’s position.

Usually at one of these moments: a third-party operator runs the hotel under a long agreement; results trail the competitive set and the explanations keep changing; a management, lease or franchise agreement is about to be signed or renegotiated; a major renovation is planned; the hotel is being bought, sold or refinanced; or the owner’s own team has no hotel specialist.

Most standing mandates are paid as a fixed retainer, a fee linked to the hotel’s revenue or number of rooms, or a combination. Project work, such as an operator search or a transaction, is usually a fixed fee, sometimes with a success component.

The useful test is simple. The fee should be small against the profit the work protects or adds, and the asset manager should take no commission from operators, brands or suppliers.

Yes. An owner-operated hotel has no management agreement to enforce, but it still needs an independent reading of the accounts, the pricing, the cost base and the capital plan. The discipline is the same. The counterparty is the owner’s own management team.

Under a management agreement the operator runs the hotel in the owner’s name for a fee. The owner keeps the profit and carries the trading risk.

Under a lease the operator rents the property and pays the owner a fixed or variable rent. The operator carries more of the risk.

Under a franchise the owner, or a manager the owner hires, runs the hotel and pays a brand for its name, standards and distribution.

A typical management agreement has a base fee, charged as a percentage of total revenue, and an incentive fee, charged as a percentage of gross operating profit or an adjusted profit figure. Base fees are commonly quoted at around 2 to 4 percent of revenue and incentive fees at around 8 to 10 percent of profit. Both vary widely by market, brand and deal.

Brands also charge for marketing, loyalty programmes, reservations and technology. These system charges can add up to as much as the headline fees, so they belong in the same negotiation.

A performance test is a clause that lets the owner end the agreement if the operator underperforms. Most tests have two limbs. The hotel must miss an agreed share of its budgeted profit, and it must also fall below an agreed RevPAR level against a named competitive set, usually for two consecutive years.

Operators negotiate cure rights and exclusions. A test that can never be failed protects nobody, so the drafting matters more than the headline.

The FF&E reserve is money set aside each year to replace furniture, fixtures and equipment. Agreements usually set it as a percentage of total revenue, often building up over the first years to around 4 or 5 percent.

The reserve covers routine replacement. It rarely covers a full renovation, so the owner needs a separate long-term capital plan.

At a minimum: approval of the annual budget and capital plan, approval of the general manager and financial controller, access to the books and to the hotel’s data, and approval of any contract that outlasts the agreement or exceeds an agreed value.

An owner who cannot see the data or reject the budget has handed over more than management. It is better to know that before signing.

Key money is a payment a brand or operator makes to the owner to win a contract. It is usually recovered through a longer term, higher fees, or a clawback if the agreement ends early. Value it as a loan with conditions, and compare offers only after those conditions have been priced.

USALI is the Uniform System of Accounts for the Lodging Industry, the standard format for hotel operating statements. It defines what belongs in each department and each line, so that one hotel can be compared with another and one year with the next. The 12th Revised Edition applies from January 2026.

Owners should require USALI reporting in the management agreement, because fees and performance tests depend on its definitions.

Gross operating profit is revenue less departmental and undistributed operating expenses. It measures how well the hotel is run.

EBITDA goes further. It deducts management fees and non-operating items such as property tax, insurance and rent.

NOI, as hotel investors usually use the term, is EBITDA less the FF&E reserve. It is the figure that supports value and debt. A hotel can show healthy GOP and still disappoint its owner once fees, fixed charges and reserves are taken out.

Flow-through is the share of additional revenue that becomes additional profit. If revenue rises by 100 and GOP rises by 55, flow-through is 55 percent.

Growth that comes from rate should flow through at a high percentage, because a higher price adds little cost. Growth that comes from occupancy flows through at a lower percentage, because each occupied room carries variable cost. You can test your own figures on the Owner’s Desk.

Flex is the mirror of flow-through. It measures how much of a revenue shortfall management saved by reducing cost. If revenue falls by 100 and GOP falls by only 40, the hotel flexed 60 percent.

Flex shows whether costs are being managed or simply carried.

RevPAR is rooms revenue per available room. TRevPAR is total revenue per available room, including food, beverage, spa and other income. GOPPAR is gross operating profit per available room.

RevPAR shows how well the rooms are sold. GOPPAR shows what is left before fees and fixed charges, so it is the better single measure for an owner.

They are index measures against a competitive set. MPI compares occupancy, ARI compares average rate, and RGI compares RevPAR. An index of 100 means the hotel takes its fair share. Above 100, it takes more.

Read the three together. An RGI of 100 built on high occupancy and low rate describes a different hotel from one built on rate. The market index calculator works them out.

It is a way of explaining why revenue differs from budget or from last year by separating three causes: rate, volume and mix. Rate is the price achieved. Volume is the number of rooms or covers sold. Mix is the shift between segments or channels that carry different prices and costs.

Separating them stops one cause from hiding behind another.

A capitalisation rate is a hotel’s net operating income divided by its value. Investors use it in reverse: stabilised NOI divided by a market cap rate gives an estimate of value.

Most professional valuations also run a discounted cash flow over ten years and check the result against price per key and recent sales. A cap rate is the outcome of a price agreed between buyer and seller. It is evidence of value. It does not create it.

Hotel income moves more than income from offices or housing, because rooms are repriced every night and a large share of the cost is fixed. Lenders therefore look at loan-to-value, debt service coverage and debt yield together.

Our house view is that loan-to-value above 60 to 70 percent is high risk for a hotel. Coverage should be tested against a bad year, because the average year is not the one that causes default. The value and debt calculator gives all three measures.

A property improvement plan is the list of works a brand requires for a hotel to meet its current standards, usually at signing, renewal or sale. The owner pays for it.

Every item should be priced, scheduled and challenged. Some protect rate and value. Some serve only the brand.

Look for three signs together. The hotel’s rate index has fallen for several years while occupancy held. The capital needed just to stand still keeps rising. The market around the hotel has changed, in guest mix or in new supply.

Repositioning is justified when the added income, valued at a realistic cap rate, clearly exceeds the capital spent and the income lost during the works.

Sell when the price offered exceeds the value of holding, measured honestly. That means comparing the sale price with the present value of the cash the hotel will produce, after the capital it will soon need.

Hotels are cyclical. The best prices arrive when trading is strong and buyers are optimistic, which is also when selling feels least necessary.

Four things: the pre-opening budget, the critical path to opening day, the hiring and training of the leadership team, and the technical handover of the building.

Costs agreed loosely before opening are hard to recover afterwards. An opening that slips by a month loses a month of revenue after the fixed costs have already started.

Food and beverage carries high labour and material cost, and many hotel outlets were planned around brand standards more than around the market. Departmental margins are far lower than in rooms.

The remedies are specific: fewer and better-defined outlets, menus engineered on contribution, prices set by demand period, and table plans that match the party sizes that actually arrive.

Excelsior Asset Management & Advisory is an independent, owner-side hotel asset management and advisory firm based in New Delhi and Jaipur, India. It was founded by Vikram Aditya Singh, a third-generation hotelier with 28 years in luxury hotels. The firm works for owners, developers, lenders and family offices on hotels, resorts and restaurants.

Owners of hotels, resorts, palaces and restaurants. Developers planning one. Lenders and investors who need an independent reading of an asset. Family offices holding hospitality property.

We take a small number of mandates at a time, and we accept no commission from operators, brands or suppliers.

The firm is based in New Delhi and Jaipur and takes mandates across India and abroad. The principal has worked in hotels in India, the United States, Canada, the Maldives and Malaysia.

With a conversation, then a short written scope. Most owners begin with a review of one asset: the accounts, the agreement, the market position and the capital plan. The review ends in a written reading and a ranked list of actions. A standing mandate follows only if both sides want it.

Yes. We sign a non-disclosure agreement before receiving accounts or agreements, and we do not name clients without written permission. The exhibits on this site are anonymised for that reason.

Yes. The principal has created more than 67 restaurant concepts for hotels and private owners. The firm advises on concept, menu, kitchen planning, pricing and restaurant revenue management, for hotel outlets and for stand-alone restaurants.