Overview
Car wash underwriting and hotel underwriting both focus on cash flow and collateral, but lenders evaluate the risks differently. Hotels are typically underwritten as operating businesses with significant demand volatility. Car washes are also operating businesses, but they often have different cost structures, different demand patterns, and different collateral considerations.
Revenue volatility and demand drivers
Hotels can be highly sensitive to tourism, events, and broader economic cycles, and daily rates can change quickly. Car wash revenue is often more repeat-driven, but it can still be impacted by weather, competition, and downtime.
Expense structure and operational leverage
Hotels have high labor and fixed operating costs tied to occupancy and service levels. Car washes can have meaningful utilities and maintenance costs, and uptime is a critical variable. Lenders typically underwrite both using realistic expenses and conservative assumptions.
Collateral and marketability
Hotels are specialized assets and resale can depend on brand, flags, and market conditions. Car washes are also specialized, but strong corridor sites with functional layouts can be viewed as more adaptable within the car wash operator universe. Lenders focus on whether the collateral remains marketable if performance declines.
Documentation lenders emphasize
- Hotels trailing occupancy, ADR, RevPAR trends, and management performance
- Car washes deposit support, wash counts, membership reporting, uptime and maintenance history
Bottom line
Hotel underwriting often centers on demand volatility and operating intensity, while car wash underwriting often centers on verifiable performance and uptime. In both cases, clean reporting and realistic budgeting are what make underwriting move smoothly.