From hotel results to manager value

Hypothetical manager, $ millions. Not to scale.

Illustrative only
The hotels and the contract terms
Hotel revenue100.0
annual, 10 hotels
Base fee3.0
3% of revenue
Hotel profit
above the owner's priority
owner's priority, paid first
Incentive fee0.5
only above the priority
Services charged to the hotels
Retained services0.5
kept, not passed through
The manager
Fee revenue4.0
Less corporate and service-delivery costs−2.5
EBITDA1.5
through contract survival and the DCF
Enterprise value12.1
Costs the manager pays on the hotel's behalf
Reimbursed at cost, no markup: excluded from fee revenue and from the multiple's base
Owner's assets
Hotel property value belongs to the hotel owner.
It is never added to the manager's value; it is evidence of fee quality only.

Box sizes and arrow widths do not represent amounts.

Illustrative only. Not to scale. How a hypothetical manager's fees arise from hotel results under contract terms. The incentive fee arises only above the owner's priority, and reimbursed costs pass through at no markup, outside fee revenue. Hotel property value belongs to the owner; it informs, but never adds to, the manager's value.

Hypothetical manager, $ millions
Item$ millions
Hotel revenue (annual, 10 hotels)100.0
Base fee (3% of revenue)3.0
Incentive fee (only above the owner's priority)0.5
Retained services0.5
Fee revenue4.0
Less corporate and service-delivery costs−2.5
EBITDA1.5
Enterprise value12.1
Horwath HTL — Valuing a Hotel Management Company: Read the Hotels Behind the Fees 2026