Hotel FF&E Reserve Calculator

FF&E reserves fund routine replacement of hotel interiors on a planned cycle.

Annual hotel revenue

FF&E reserve %

Cycle years

Keys

Existing reserve balance

Annual reserve contribution

$600,000

Cycle total reserve

$5,000,000

Per-key cycle reserve

$25,000

How the math works

Annual reserve = revenue × %. Cycle total = annual × cycle + existing balance.

$15M × 4% = $600k/yr × 7 = $4.2M + $800k = $5M cycle / 200 keys = $25k/key.

How to Use

Enter total hotel revenue.
Enter FF&E reserve % of revenue.
Enter FF&E cycle years.
Enter number of keys.
Enter existing reserve balance.
Read reserve contribution and cycle total.

Frequently Asked Questions

Typical FF&E reserve %?

Franchise agreements typically require 4-5% of gross revenue. Full-service luxury: 5-6%. Limited-service: 3-4%. Management agreements specify as % of revenue funded to escrow monthly. Not expensed but offsets depreciation. Property taxes pay on full value but deduct FF&E reserve from taxable income in some states. IRS treats as ordinary capital spend when used.

What does FF&E cover?

Furniture (case goods, seating, tables): 35-50% of FF&E. Soft goods (bedding, drapery, rugs, wall covering): 25-35%. Electronics (TVs, phones, in-room tech, POS): 10-20%. Kitchen/F&B equipment: 8-15%. Housekeeping equipment (vacuum, carts): 2-5%. Excludes building systems (HVAC, elevators, roof — separate capex). Excludes major renovations (full gut-outs are PIP or renovation capital).

Typical cycle?

Soft goods (bedding, drapes): 5-7 years. Case goods/furniture: 7-10 years. Bathroom fixtures: 10-12 years. Carpets (public): 7-10 years. Carpets (guestroom): 5-8 years. Lobby refresh: 5-7 years. Full room refresh: 7-10 years (coincides with PIP). Accelerated cycles in high-use properties (resorts, airports). Longer in low-turn (extended-stay). Brand standard often enforces.

Reserve vs actual spend?

Funded monthly but spent on lumpy replacement cycles. 5-year reserve at 4%/year = 20% of annual revenue accumulated. Funds next full refresh. Over-funded reserve after efficient spending periods: reduce %-rate or refund partial. Under-funded: reserve deficit, owner must contribute additional at brand renewal. Trigger events: PIP, brand change, major capex. Reserve disclosure in annual hotel financials.