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Valuation Multiples For Lodges or Resorts

The gross revenue multiplier approach to estimating market value is a simplified method that can be used for estimating the market value of a lodge or resort. It analyzes comparable lodge or resort sales by dividing their sale price by their gross annual revenue.


A lodge has Gross Annual Revenue of $500,000 and sells for $1,500,000 then it has a Gross Revenue Multiplier of 3.

$1,500,000 / $500,000 = 3

Conducting this analysis on a group of comparable sales yields a range of multipliers that can be used to estimate the market value for a similar property. This is done by multiplying its gross annual revenue by the appropriate multiplier that is determined by analyzing comparable sales.

This is a simplified method of estimating market value because there are no expenses to consider and is particularly useful for situations where expenses may be difficult to verify or justify. This can often be the case with fishing lodges for example. Many fishing lodge owners will expense personal boats, all terrain vehicles, trucks, groceries, etc. through the lodge business artificially inflating expenses.

The value estimate determined via this method Indicates the total going-concern value of the lodge or resort. The going-concern value of a property is effectively the sum of the value attributed to; 1) land; 2) building and site improvements; 3) furniture, fixtures, and equipment (FF&E) and operating supplies and equipment (OS&E); and 4) goodwill and intangibles, if any.

Determining the revenue amount to apply the multiplier to

Depending what ups and downs the lodge or resort business being analyzed has had in the recent past (such as Covid-19), several things must be considered when deciding the revenue amount to apply the multiplier to:

  • In some cases, it may be appropriate to take the average annual revenue from the past 3 years;
  • In some cases, it may be appropriate to consider historical revenue, or;
  • In other cases, if the business has been on a steady upward trend, it may be appropriate to use the business’ current revenue over the past 12 months.

It’s really a judgement call that must be made as situations can vary widely.

Market Derived Gross Revenue Multipliers

The following chart summarizes recent gross revenue multipliers for going-concern lodge and resort transactions:


Sale Price

Gross Revenue


Fly-in lodge with 9 guest cabins




Fly-in outpost operation with 22 guest cabins




Drive-in lodge with 11 guest cabins




Drive-in lodge with 15 guest cabins




Boat-in lodge with 12 guest cabins




Fly-in resort with 6 guest rooms




Drive-in lodge with 9 guest cabins




Drive-in lodge with 6 guest cabins




Drive-in lodge with 9 guest cabins




Drive-in lodge with 5 guest cabins




Drive-in resort with 12 guest cabins




Drive-in lodge with 10 guest cabins




Drive-in lodge with 8 guest cabins




Drive-in resort with 16 guest cabins










Recent transactions suggest gross revenue multipliers ranging from 1.37 to 5.69, with a mean of 3.68.

At first glance, the gross revenue multipliers indicate the higher the gross revenue, the lower the multiplier but again, it’s very situation dependent.

My knowledge of the above operations also indicates that a gross revenue multiplier near the low end of the range is appropriate for a property operating near its full potential.

A gross revenue multiplier at the upper end would be appropriate for a property with significant potential to increase financial performance.

The gross revenue multiplier achievable for a lodge or resort sale is also impacted by the budget constraints of the typical buyer.

Buyers of these properties are typically owner operators that are limited in their purchasing power and the higher the business’ overall revenue after a certain level, the lower the gross revenue multiple that is likely to be obtained.

Hope this article has been informative, please leave your comments below.

This article has been prepared by Frontier Hospitality Advisor for general information only. Frontier Hospitality Advisor makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Frontier Hospitality Advisor excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this article and excludes all liability for loss and damages arising there from.

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