What really drives hotel values?

Article Abstract:

Sound hotel investments requires a complete understanding of the relationships between asset value, cost and age. Essentially, hotel value is associated with the net return to the property, sales comparison and cost. Hotel values appreciate over time depending on factors relating to changes in market supply and demand balances, capital availability, property quality and life cycle position and the current replacement cost discount represented in the purchase price. A case study is presented to demonstrate how appreciation is driven by future replacement cost and the principle of substitution.

Analysis, Case studies, Real estate investment, Real estate investments, Valuation, Fixed assets

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Hotel investment strategies: objectives

Article Abstract:

Two major investment techniques are to purchase properties with less replacement cost and/or to purchase them with lower market value. The pricing of real estate requires sufficient research and must be affected by emotional considerations. These techniques, however, should be done according to the market cycle timing approach. The proper time occurs during the peak stage of construction and occupancies periods and when the average rates are getting better. Investors must also focus on the appreciation maximum scheme instead of the current income scheme.

Hotels & Motels, Hotels (except Casino Hotels) and Motels, Management, Hotel and motel management

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Why now is the time to invest in hotel real estate

Article Abstract:

Any cautious buyer would not ordinarily purchase hotel real estate but in the past such prudence may no longer be necessary. The factors that caused the negligible performance of the industry such as poor underwriting techniques, a capital-influenced rather than market-influenced development, unreasonable taxes and unrealistic goals no longer exist. The investor who buys well-located hotels at half the expense from sellers, holds them for about a decade, and sells them at current construction costs profits the most.

Subdividers and developers, not elsewhere classified, Real estate developers

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