Vacation Rental Model
Hospitality Financial Model (Free Excel Download)
Forecast vacation-rental income from listings, occupancy, nightly rates, seasonality, cleaning, platform fees, property costs, and acquisitions to evaluate cash yield.
professionals from Deloitte
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About this model
This vacation-rental model is designed for operators building a portfolio of short-term rental homes or apartments. It links the number of units, occupancy, nightly rates, cleaning costs, platform fees, and leases to the business's financial results.
Use it to plan growth, assess a rental arbitrage portfolio, or evaluate an acquisition. The model makes it easy to test whether a higher occupancy rate, better pricing, or new units will create lasting value.
What every model includes
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
What's inside the Vacation Rental Model
- Portfolio inputs: Year-1 units, new units per year, days available per unit
- Occupancy: Year-1 occupancy with an annual ramp and a practical ceiling
- Demand and pricing: ADR, length of stay, cleaning fee, other guest fees, channel commission, price escalation
- Capital and working capital: maintenance capex, furnishing per new unit, NWC, base-year revenue
- Valuation: WACC, terminal growth, net debt, shares outstanding
- Dashboard with KPI cards, a seven-year operating summary, trend charts, a net-revenue-to-net-income waterfall, and key unit, occupancy, ADR, margin, valuation, and revenue-mix metrics
- Portfolio roll-forward with opening units, annual new leases, closing units, available nights, occupancy ramp with ceiling, booked nights, bookings, and nights per unit
- Revenue build with accommodation (booked nights x ADR x escalation), per-stay cleaning fees, ancillary guest fees, gross booking revenue, channel commission deduction, and net revenue
Operating Drivers and Financial Flow of a Vacation Rental Model
This vacation rental financial model maps a seven-year operating plan for an operator who leases homes under master leases and re-lists them on platforms. It links unit growth, availability, occupancy, pricing, and channel costs to financial statements and an unlevered DCF, helping you see how occupancy and ADR interact with fixed rent.
Operating Drivers: Units, Availability, and Occupancy
The model builds a unit roll-forward where new leases each year are tapered by a pipeline factor that falls as the estate approaches a leasing-pipeline ceiling, reflecting a thinning addressable submarket. Closing units times days available (365 less owner blocks, turnover, and maintenance) gives available nights.
- Occupancy starts at a first-year input, ramps by a fixed number of percentage points annually, and is capped at a practical ceiling. The resulting booked nights drive bookings (booked nights divided by average length of stay) and nights per unit.
- This structure ties physical capacity to leasing constraints and realistic filling of new units.
From Booked Nights to Net Revenue
Accommodation revenue equals booked nights times ADR, escalated annually. A per-stay cleaning fee is charged to guests based on bookings, and ancillary guest fees add a percentage of accommodation, forming gross booking revenue.
- A direct-booking share ramps up over time, splitting gross between OTA channels (paying full OTA commission) and direct bookings (paying only a payment-processing fee). Both are deducted to reach net revenue.
- This flow captures the channel take as a real cost that never appears in the operating cost stack, and the direct-share ramp acts as a lever to trade OTA dependency for owned-channel bookings.
Cost Structure and Profitability
Net revenue flows into a P&L where master-lease rent and utilities are per-unit fixed costs, escalating at cost inflation. Cleaning and turnover costs are per booking, while repairs, supplies, marketing and software, and corporate SG&A are percentages of net revenue.
- The model computes EBITDA, then subtracts depreciation of furnishings to get EBIT, applies tax on positive EBIT, and arrives at net income. Because rent is fixed per unit and runs regardless of occupancy, the business is a wager that occupancy and ADR cover the lease.
- As occupancy ramps and ADR escalates, EBITDA margin expands modestly because fixed per-unit costs are spread over more booked nights.
Cash Flow, Valuation, and Practical Use
Unlevered free cash flow is NOPAT plus depreciation, less maintenance capex and growth capex (furnishing new units), less the change in working capital, which is favourable because guests prepay. The DCF discounts explicit-period UFCF and a Gordon-growth terminal value at WACC to enterprise value, then subtracts net debt for equity value and value per share.
- The implied EV/EBITDA is growth- and margin-driven. The model includes a dashboard with key metrics such as units, occupancy, ADR, revenue per unit, EBITDA margin, and value per share.
- It is useful for planning growth, evaluating rental arbitrage, or assessing an acquisition, allowing you to test changes in leasing pipeline, occupancy, ADR, or costs and see the impact on value and margins.
Formatted to IB standards
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Frequently asked
What is a vacation rental model?+
A vacation rental model captures the seven-year operating economics and intrinsic value of a short-term rental operator that leases a portfolio of homes and apartments and re-lists them nightly across Airbnb, Vrbo and Booking.com. It rolls a unit count forward, converts available nights and an occupancy ramp into booked nights, prices accommodation at a nightly ADR plus cleaning and guest fees net of channel commissions, runs the lease-heavy cost stack to EBITDA, and discounts an unlevered free-cash-flow stream to enterprise value, equity value, and value per share.
How is vacation-rental revenue built?+
Revenue is driven by the unit estate and its occupancy: available nights equal closing units times days available per unit, booked nights equal available nights times an occupancy factor that ramps to a ceiling, and accommodation revenue is booked nights times a nightly ADR. A per-stay cleaning fee scales with bookings, ancillary guest fees layer on as a percent of accommodation, and the booking platforms retain a blended channel commission that is netted out to reach net revenue.
Why is the master lease so important?+
In the rental-arbitrage format the operator does not own the property; it pays a fixed monthly lease and keeps the spread above it. Rent is the single largest cost and runs whether or not a unit is booked, so the whole model is a wager that occupancy and ADR cover a fixed lease. The model carries rent and utilities per unit so an analyst can stress the lease or a soft-demand year and watch the EBITDA margin move.
Why an unlevered DCF instead of an EBITDA multiple?+
An asset-light operator still furnishes each unit and carries real depreciation and capex, so EBITDA overstates cash. The model bridges to unlevered free cash flow, NOPAT plus depreciation, less maintenance and furnishing capex, less the change in working capital, which is favourable because guests prepay at booking, and discounts it at a WACC, then adds a Gordon-growth terminal value. The implied EV/EBITDA falls out as a sanity check rather than as the valuation input.
Can I model owned units or a single property?+
The template is a leased-portfolio unlevered DCF. For an owned-property view, replace the master-lease rent line with property depreciation and a financing schedule and bridge to levered free cash flow; for a single property, set the estate to one unit and size the ADR, occupancy, and cleaning volume to that listing. The net-debt line already bridges enterprise value to equity value, so a financing layer slots in cleanly.
What is vacation rental arbitrage and how does this model represent it?+
Rental arbitrage means signing a fixed monthly master lease on a property and re-listing it nightly on platforms like Airbnb and Vrbo at a per-night rate that exceeds the per-night cost of the lease. The operator does not own the property. The model makes that spread explicit: master-lease rent is a fixed per-unit cost on the P&L while accommodation revenue scales with booked nights and ADR, so EBITDA margin is driven entirely by how many nights the portfolio books and at what rate.
How does the occupancy ramp work?+
Occupancy starts at the Y1 input on the Assumptions sheet and increases by a fixed number of percentage points each year, capped at a practical ceiling. The cap reflects that newly leased units accumulate reviews and search ranking slowly, and even a mature portfolio does not reach 100%. Booked nights are available nights multiplied by that year's occupancy factor, and bookings are booked nights divided by the average length of stay.
Why is the channel commission netted before the P&L rather than shown as an expense?+
Booking platforms deduct their commission from the gross payout before remitting to the operator, so the revenue never arrives. Netting it between gross booking revenue and net revenue means the P&L runs on the cash the operator actually receives and no phantom revenue inflates margins. It also separates a platform cost from internal operating costs, keeping the two distinct and auditable.
How is enterprise value calculated?+
The FCF sheet discounts each year's unlevered free cash flow at WACC to a present value. The Valuation sheet sums those seven present values and adds the present value of a Gordon-growth terminal value (Year-7 UFCF x (1 + terminal growth rate) divided by (WACC minus terminal growth rate), discounted at WACC). That sum is enterprise value. Net debt is subtracted to reach equity value, which is divided by share count for value per share and cross-checked against implied EV/EBITDA.
What do the model defaults produce?+
At the default assumptions, Y1 net revenue is approximately $4.1M growing to approximately $10.1M by Y7. EBITDA margin ramps from approximately 18.8% to approximately 25.6% as the fixed lease is spread over more booked nights. Enterprise value is approximately $11.2M, value per share approximately $9.17, and the implied EV/EBITDA approximately 14.4x. All outputs move directly when the leasing pipeline, occupancy, ADR, or cost assumptions are changed.
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