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  • Finance & Investment
  • Due Diligence Procedures for Hotel Appraisals

  • What is the first thing that comes to mind when you hear the phrase "business valuation"? Mathematics? Formulas perhaps? Maybe even WACC (weighted average cost of capital) for those of you with a MBA. The end product of an appraisal is often a numerical value and people sometimes perceive the process to be math intensive. Although it is true that the use of formulas and equations is essential to the valuation procedure, due diligence procedures encompass far more than mathematical models. The importance of due diligence research cannot be overlooked because of its crucial role in justifying the outcome of a valuation.

    There are many factors that directly influence the value of a subject business or hotel, and they can generally be classified under the following three main areas contributing to value: company environment, industry dynamics and economic conditions. These factors then form different aspects of due diligence research. In the following paragraphs, we will discuss the three areas of due diligence research in more detail.

    Company research encompasses several different factors, and in most cases, these have the most direct impact on a company's day-to-day operations. Some examples of company research are customer demographics, management/directorship structure, suppliers, advertising and intellectual property. ...

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Mobile Technology: The Necessity for a Well-Defined Strategy
Mobile technology has altered the way the world does just about everything. With mobile devices in our hands (smart phones and tablets) and media and information up in The Cloud, the possibilities for immediate, worldwide, personal access are limitless. Smart mobile devices are dictating how we live our lives and as a result, these developments are game-changers for all businesses, but especially for service industries, including the hotel sector. These advancements are literally redefining how guests interact with a hotel in virtually every aspect of its operation, and savvy hoteliers who are implementing the latest mobile technologies and best practices in each critical channel will steal market share from their competitors, decrease dependency on their Online Travel Agents, and generate incremental revenues which will substantially increase their bottom line. A well-defined mobile strategy is no longer a "nice-to-have" but an essential weapon in an industry that is evolving at a blistering pace, and those operations that are slow to respond do so at their peril. The January Hotel Business Review will examine which mobile strategies some operators have adopted in order to meet these challenges, and will report on the solutions that are proving to be most advantageous for both companies and their guests.