Module II· Multiples & Sector SpecificsIntermediate

Question

How do you use EV/Bed in hospital or hotel valuations?

Answer

Mechanics

EV/Bed measures value per bed of capacity, useful when the asset base is limited and profitability is driven by occupancy.

Application

hospitals, care homes, hotels.

Typical values

Hospitals: $100–250k per bed.
Care homes: $50–100k.
Hotel beds: $100–500k (budget vs. luxury).

Complementary multiples

EV/Room (hotels), EV/Patient (outpatient clinics), EV/Resident (care homes).

Pitfalls

Asset-quality differences are huge — location, renovation status, occupancy.

Rule of thumb

EV/Bed × annual revenue per bed gives the implied EV/Revenue multiple. In the wave of care-home consolidation (and the distress at some large listed operators), EV/Bed multiples were central and swung sharply over 2018–2024.

Deep diveShow more details

Pitch tip

'EV/Bed of $120k, blended revenue/bed of $60k → implied EV/Revenue of 2.0x — which at a ~27% EBITDA margin corresponds to an EV/EBITDA of 7.5x.'

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