Mastering hotel valuation: A comprehensive guide for investors and owners
Hotel valuation uses three approaches income capitalisation, sales comparison, and depreciated replacement cost and the right answer usually requires all three. Here's what to request from a seller, how cap rates and RevPAR benchmarking work, and the errors that lead buyers to overpay by 20–40%.
Hotel Valuation: Methods, Metrics and the Numbers That Drive Deals Valuing a hotel is not the same as valuing an office block or a restaurant. A hotel is simultaneously a real estate asset, a trading business, and where there's a franchise a brand licence. Get the weighting wrong between those three components and your acquisition price will be wrong, often by 20–40%. This article covers the three main valuation approaches used by RICS-qualified valuers and hotel lenders, the financial metrics that buyers and sellers actually negotiate over, and the practical steps to arrive at a defensible nu…