How UAE Hotels and Hospitality Businesses Are Valued

By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-10-12

Direct Answer: Assetica publishes no EBITDA multiple for hotels, and that is deliberate. A hotel is a trading business sitting on top of real estate, and the property usually dominates the value. Hotels are valued by capitalising a stabilised year of trading profit, cross-checked against a per-key figure and against the underlying asset. Applying a sector multiple to a hotel is the most common way the number comes out wrong.

Owners of other UAE businesses can look up a band and sanity-check themselves in a minute. Hotel owners cannot, and the reason is worth understanding before commissioning any valuation, because it determines which questions actually decide your number.

Why there is no published hotel multiple

Assetica publishes indicative bands for nine sectors, from retail and F&B at 3x to 5x normalised EBITDA through to technology and SaaS at 8x to 15x. The full table is in our UAE valuation multiples guide. Hotels are not on it.

The omission is honest rather than accidental. A sector multiple assumes the thing being valued is an earnings stream. For most hotels the larger part of the value is a building in a specific location, and two hotels with identical trading profit can differ enormously in worth because one sits on land that is worth more. A single multiple cannot carry that, and quoting one would mislead.

The three approaches, and how they fit together

Approach	What it answers
Income capitalisation on a stabilised year	What the trading business is worth to an operator at normal performance
Discounted cash flow	What it is worth where performance is still ramping or a refurbishment is due
Per-key comparison	A sanity check against transactions of similar assets
Underlying asset value	The floor, and often the larger part of the answer

A credible report runs more than one and explains why they disagree. Where the asset value exceeds the trading value, that gap is itself the finding: the property is worth more than the business currently operating in it.

The stabilised year is the central judgement

Hotel trading moves with seasons, events, refurbishment closures and the opening of competing supply. Valuing on last year alone embeds whatever was unusual about last year into the price for the life of the deal.

A stabilised year strips that out: a normal occupancy, a normal rate, a normal cost base, with the refurbishment cycle reflected rather than ignored. Getting it right matters more than any other single input, and it is where most of the argument in a hotel transaction happens.

RevPAR, ADR and occupancy say different things

Three numbers dominate the conversation, and conflating them hides the story.

Average daily rate tells you what the hotel charges. Occupancy tells you how full it is. Revenue per available room combines both and is the one buyers compare. A hotel holding rate at lower occupancy and one discounting into high occupancy can report similar revenue per available room while being very different businesses, because discounting is easy to reverse and rate positioning is not. A buyer will want the trend in all three, not the latest figure.

The operating business and the property are two assets

This separation is the heart of a hotel valuation, and it determines what is actually for sale.

Where an owner holds both, the valuation addresses the whole. Where the hotel operates in leased premises, the lease terms become decisive: length remaining, rent review mechanism and assignment rights can make an otherwise healthy operation close to unsaleable. Where a management agreement is in place, the operator takes a share of the economics and the owner's return is what remains. Each of these produces a different number from the same trading accounts, which is why the report must state exactly which interest it values.

An illustrative split

Round numbers, illustrative only. A hotel generates AED 12 million of stabilised EBITDA. Capitalising that trading stream produces one figure. A per-key comparison against recent transactions of similar assets produces a second. A valuation of the land and building, on the basis appropriate to its tenure, produces a third.

If the asset figure is the highest of the three, the honest conclusion is that the current operation is not the highest use of the property, and the report should say so rather than averaging the numbers into a single comfortable answer. That conclusion is frequently the most commercially useful output of the exercise.

Brand, management agreement and what transfers

A franchise or management agreement with an international brand brings distribution, a loyalty base and operating standards. It also brings fees, capital commitments and termination provisions.

For a buyer the question is whether the agreement transfers, on what terms, and what the exit cost is if they want their own operator. An agreement with a long remaining term and a punitive break can reduce value for a buyer who intended to reposition the asset. Read the agreement before fixing the number, not after.

F&B inside the hotel

Restaurants and bars within a hotel are frequently treated as a single line in the accounts, which obscures a lot. Some outlets subsidise the rooms business and some are carried by it.

Where the F&B operation is genuinely separable and material, it can be looked at against the published retail and F&B band of 3x to 5x normalised EBITDA as a cross-check, with the caveat that an outlet dependent on hotel footfall is not the same asset as a standalone restaurant. Our guide to restaurant and F&B valuation covers that sector properly.

Tax, fees and the cash that actually reaches the owner

UAE corporate tax applies at 9 per cent on taxable income above AED 375,000 and 0 per cent below, with Qualifying Free Zone Persons at 0 per cent on qualifying income, as set out on the Federal Tax Authority corporate tax pages. VAT applies to hospitality supplies; see the FTA VAT pages.

Hospitality in the UAE also attracts tourism and municipality charges that vary by emirate and by property classification. The rates and the basis on which they apply should be confirmed with the relevant authority for your emirate rather than assumed, because they affect the cash a buyer actually receives and therefore the price they will pay.

Serviced apartments, holiday homes and where the line sits

Not every hospitality business is a hotel, and the distinction changes the method. Serviced apartments with longer average stays behave partly like residential property and partly like a hotel, and the balance depends on the length of stay and the service level provided.

Short-term holiday home operations are different again. Where the operator does not own the units and simply manages them under agreements with individual owners, there is no property in the valuation at all. What is being sold is a management contract book, and it is valued on the durability of those agreements: how long they run, how easily owners can leave, and how concentrated the portfolio is among a few landlords.

That last case is the one most often mispriced, because owners describe it as a hospitality business and buyers price it as an agency with cancellable contracts. Both readings are defensible, and the gap between them is settled by what the agreements actually say.

Seasonality, and the trap of a strong quarter

UAE hospitality is markedly seasonal, and a valuation discussion that starts after a strong season tends to begin from an unrealistic place.

The useful discipline is to look at full years and at the same months across several of them. A rolling twelve-month view removes the seasonal distortion without smoothing away a genuine trend. Where a single event or an unusual period lifted a year, it should be identified and treated as non-recurring, in the same way a one-off cost would be added back. The test is simple: would a buyer reasonably expect it again next year, and can you evidence why.

Sellers sometimes resist this because it lowers the headline. It also removes the strongest argument a buyer has for discounting the whole set of numbers, which is usually worth more than the point conceded.

Staff, visas and the cost base a buyer inherits

Hospitality is labour-intensive, and the employment position transfers with the business. Accrued end-of-service benefits, accommodation provided to staff, and visa commitments all represent real obligations that a buyer will quantify and deduct.

These are rarely hidden deliberately. They are simply not presented, and a buyer finding them during diligence treats the omission as a reason to look harder elsewhere. Quantifying end-of-service liability properly before a process, and presenting it alongside the accounts, costs nothing and removes a predictable late deduction.

Capital expenditure is not optional

Hotels consume capital. Rooms need refurbishing on a cycle, plant reaches end of life, and brand standards impose requirements whether or not trading supports them.

A valuation that capitalises earnings without reflecting the next refurbishment is overstating the answer, sometimes substantially. Buyers price the deferred capital explicitly, and a seller who has a credible condition survey and a capital plan is in a far stronger position than one who argues the point from memory.

What to prepare

Three to five years of trading, with rooms, F&B and other departments separated.
Occupancy, average daily rate and revenue per available room by month, not just annual averages.
The tenure position, whether freehold, leasehold or usufruct, with the documents.
Management or franchise agreement, including term, fees and termination.
Capital expenditure history and the forward plan, with a condition survey where one exists.
Departmental cost structure, so fixed and variable can be separated for a stabilised year.

The documents checklist covers what any engagement needs, and plant and machinery valuation covers the equipment side where it is material.

Getting a hotel or hospitality valuation

Assetica values hospitality businesses to the International Valuation Standards and the RICS valuation standards, which deal specifically with trade-related property of this kind, from Office 304, Icon Tower, Barsha Heights. We do not audit and we do not broker deals, so we have no stake in the number.

Where the property itself is the larger part of the value, we will say so and set out what that means for your options. A standard report takes five to seven business days from complete documents, two to three expedited. Use the valuation calculator for an indicative starting point on the trading business, read about our business valuation service, or book a scoping call through our contact page.

Been quoted a multiple for your hotel?

Ask what it was applied to and whether the property was valued separately. If neither question has a clear answer, the number is not one you can rely on.

Book a scoping call

Frequently Asked Questions

What EBITDA multiple do UAE hotels sell for?

Assetica does not publish one, and any figure quoted as a hotel multiple deserves scrutiny. A hotel is a trading business sitting on real estate, and the property usually represents the larger share of value. Hotels are valued by capitalising a stabilised year of trading profit, cross-checked against a per-key figure and against the underlying asset value.

What is a stabilised year and why does it matter?

It is a normalised view of trading at typical performance: ordinary occupancy, ordinary rate, an ordinary cost base, with the refurbishment cycle reflected. It matters because hotel results swing with seasons, events, closures and new competing supply, and valuing on a single unusual year carries that distortion into the price permanently.

What is per-key value?

The value of the hotel divided by the number of rooms, used to compare against recent transactions of similar assets. It is a sanity check rather than a valuation method in itself, because it says nothing about trading performance, condition or tenure. It is most useful for spotting a result that is implausible against the market.

Does it matter whether we own or lease the building?

Substantially. Where the owner holds both the property and the operation, the valuation addresses the whole. Where the hotel trades from leased premises, the remaining term, rent review mechanism and assignment rights become decisive, and restrictive terms can make an otherwise healthy operation difficult to sell.

How is the F&B operation treated?

Separately where it is material and genuinely separable. Outlets inside a hotel are often reported as one line, which hides whether they subsidise the rooms business or are carried by it. A separable F&B operation can be cross-checked against the published retail and F&B band of 3x to 5x, noting that an outlet relying on hotel footfall is not a standalone restaurant.

How is upcoming refurbishment reflected?

As a deduction, explicitly. Hotels consume capital on a cycle, and brand standards can impose requirements whether or not trading supports them. A valuation that capitalises earnings while ignoring the next refurbishment overstates the result. A condition survey and a costed forward plan put the seller in a much stronger position.

Speak to Assetica about Business Valuation

Assetica is an independent business valuation firm in Dubai. We do not audit and we do not broker deals, so the number carries no conflict. Read more about business valuation, or book a scoping call. Standard reports are issued in five to seven business days.