NOI multiples by market and segment

I have sat through 14 sell-side processes on the owner side. The first conversation an investor has about a hotel is almost never "what is your GOPPAR" — it is "what NOI multiple are you expecting?" The multiple is the single number that frames every subsequent diligence conversation, and getting it wrong by half a turn is the difference between a closed deal at €68M and a stalled process at €62M.

What a multiple actually is

NOI multiple = enterprise value divided by net operating income (after a normalized FF&E reserve, typically 3-4% of revenue, and after a management fee, typically 3% base + 6-10% incentive). It is the reciprocal of the cap rate. A 7.0% cap rate is a 14.3x multiple. A 5.5% cap rate is an 18.2x multiple. Investors quote whichever framing makes their offer sound more attractive.

The number that ends up on the term sheet is not the multiple the buyer paid. It is the multiple the buyer paid after the seller agreed to the buyer's view of normalized NOI — which is almost always lower than the seller's view. The fight is in the NOI, not the multiple.

Market ranges, mid-2026

These ranges shift quarterly. JLL Hotels & Hospitality publishes a transaction index every six months; HVS prints European Hotel Valuation Index annually. The numbers above match the mid-2026 sweet spot for stabilized assets — value-add and distressed transact 2-4 turns lower.

What drives the spread within a band

Two assets in the same segment and market can trade 3-4 turns apart. The drivers I have seen actually move the multiple: length of franchise or management agreement remaining (a 22-year Marriott agreement adds 1.5-2 turns over a 4-year agreement up for renewal), capex backlog (a €15M deferred FF&E line item subtracts roughly its present value from EV, not from the multiple, but it suppresses the headline number buyers will pay), brand strength of the operator vs. the bare-asset value, and the credit story of the in-place group base.

Buyers care about renovation timing the way sellers care about peak season. A hotel that just completed a €30M renovation in 2024 trades at a higher multiple than the same hotel facing a 2027 renovation requirement — even though the post-renovation NOI is identical. The certainty premium is real and measurable.

The seller who walks into the process knowing the multiple range, the drivers within it, and where their asset sits in that range has roughly twice the negotiating power of the seller who learns the range from the first investor letter.