What are current hotel cap rates in Orlando?

Orlando hotel cap rates range from 4.5% for stabilized premium brand hotels near I-Drive and theme parks, to 8%+ for value-add motels in secondary markets (downtown, airport, US-192 corridor). Extended-stay properties trade at 5.5–7.5% depending on location and occupancy.

Are Orlando hotel cap rates higher or lower than national averages?

Orlando premium hotel cap rates (4.5–5.5%) are slightly below national averages due to structural tourist demand (75M annual visitors). This reflects lower perceived risk. Value-add motel cap rates (6.5–8%) are in line with or slightly above national value-add averages.

How do I calculate hotel NOI for cap rate purposes?

Hotel NOI = Gross Revenue − Operating Expenses. Gross revenue = (Nightly Rate × 365 × Occupancy Rate). Operating expenses typically run 55–65% of gross revenue including housekeeping, utilities, management, insurance, and property taxes. NOI ÷ Purchase Price = Cap Rate.

Cap Rates/Orlando Hotels

Market Data · 2026

Orlando Hotel Cap Rates 2026

Current cap rate benchmarks for Orlando hotels, motels, and extended-stay properties by asset class and submarket. Updated May 2026.

4.5–8.5%

Cap Rate Range

78%

Avg Market Occupancy

75M+

Annual Visitors

120K+

Total Hotel Keys

Cap Rates by Asset Class

Premium Brand Hotel (I-Drive / Sand Lake)

Marriott, Hilton, IHG flags near theme parks

4.5–5.5%

Occupancy: 80–88%

ADR: $180–280

Note: Institutional buyers, lowest risk, hardest to source

Mid-Scale Brand Hotel (Secondary Corridors)

Hampton Inn, Courtyard, Holiday Inn Express

5.5–6.5%

Occupancy: 74–82%

ADR: $130–190

Note: Most active market, CMBS-financeable, strong cash flow

Extended-Stay Hotels

Residence Inn, Homewood Suites, WoodSpring

5.5–7.0%

Occupancy: 78–85%

ADR: $110–160 (7-night avg)

Note: Lower turnover, higher margin, growing demand post-COVID

Value-Add Motels (Secondary)

Independent 2-3 star motels, downtown/airport/US-192

6.5–8.0%

Occupancy: 55–70%

ADR: $60–100

Note: Highest yield entry, requires renovation plan, operator expertise

Boutique / Independent Hotels

Non-flagged boutiques, design hotels, micro-hotels

5.5–7.5%

Occupancy: 65–78%

ADR: $120–200

Note: Wider range — depends heavily on location and brand strength

Cap Rates by Submarket

Submarket	Cap Rate	Notes
International Drive (I-Drive)	4.5–5.8%	Highest traffic, lowest yield, hardest to buy
Sand Lake / Dr. Phillips	5.0–6.0%	Premium retail + hotel corridor, strong occupancy
Kirkman Road / Universal Area	5.0–6.2%	Universal Studios demand, high nightly rates
US-192 / Kissimmee / Disney Approach	5.5–7.0%	Value range, strong tourist traffic, older inventory
Downtown Orlando	6.0–7.5%	Convention + leisure, more volatility than theme park areas
Airport Corridor (MCO)	6.0–7.5%	Business + transient travel, good occupancy floor
Secondary / Value-Add Markets	6.5–8.5%	Downtown fringes, suburban, older inventory — operator plays

Understanding Hotel Cap Rates

What drives hotel cap rates: Location (theme park proximity vs. secondary market), brand flag (Marriott vs. independent), occupancy history, ADR, operating expense ratio, and remaining franchise term all affect cap rate. Premium brand + prime location = lowest cap rate.

Cap rate vs. DSCR: Always test debt service coverage ratio at conservative occupancy (70%, not OM assumptions). A 5.5% cap hotel financed at 7% creates negative leverage — you pay out-of-pocket monthly. Target entry cap 2–3% above borrowing cost.

Data sources: These ranges reflect Orlando-area transactions tracked through 2025–2026, broker network intelligence, and market data from hotel investment sales databases. Ranges reflect actual trade prices — not list prices.

Related Resources

How to Evaluate Hotel Cap Rates →Vacation Rental Cap Rates →All Orlando Cap Rates →Buy Hotels in Orlando →Hospitality Investments Hub →Deal Analyzer →

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