I am a broker who both lists and sells hospitality businesses and have also owned a hotel. To be honest your quesiton does not have a specific answer. You need to first determine however if the numbers your are looking at are accurate, the capacity the business has for revenue growth or operating efficiency. Location is also key factor, where the business draws its occupancy, how it affects tax status, your goals ie life style or income, is salary built into the expenses you are measuring. From what you described I calculate the ROI is between 3.8% to 5.4%, not a bad return in this economy but if its rate of return you are seeking you can get higher.
One last comment is that hotel revenues have been down the last several years so they should rise depending on location and generally it is a business that can keep pace with inflation. Unless of course the rates are higher than the competition.
Dec 14, 2010