Hotel Cap Rates (Capitalization Rates)

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Definition

The Cap Rate is a numerical representation of risk associated with the hotel. It is derived using the annual net operating income (stabilized, trailing 12 months, forward 12 months, etc) over the price paid for the property.

Example

Cap Rate = Net Operating Income / Property Value

Hospitality Investment Survey 12-Month Historical Cap Rate Data Full-Service Property Types Limited-Service Property Types