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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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Hotel Business Review Finance & Investment

Steven Belmonte
Bob Carr
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Paul R. Kremp
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Mike Handelsman
Mike Handelsman
Coming Up In The April Online Hotel Business Review




Feature Focus
Guest Service: The Personalized Experience
In the not-too-distant future, when guests arrive at a hotel, they will check themselves in using a kiosk in the lobby, by- passing a stop at the front desk. When they call room service to order food, it will be from a hotel mobile tablet, practically eliminating any contact with friendly service people. Though these inevitable developments will likely result in delivered to their door by a robot. When they visit a restaurant, their orders will be placed and the bill will be paid some staff reduction, there is a silver lining all the remaining hotel staff can be laser-focused on providing guests with the best possible service available. And for most guests, that means being the beneficiary of a personalized experience from the hotel. According to a recent Yahoo survey, 78 percent of hotel guests expressed a desire for some kind of personalization. They are seeking services that not only make them feel welcomed, but valued, and cause them to feel good about themselves. Hotels must strive to establish an emotional bond with their guests, the kind of bond that creates guest loyalty and brings them back time and again. But providing personalized service is more than knowing your guests by name. Its leaving a bottle of wine in the room of a couple celebrating their anniversary, or knowing which guest enjoys having a fresh cup of coffee brought to their room as part of a wake-up call. Its the small, thoughtful, personal gestures that matter most and produce the greatest effect. The April issue of the Hotel Business Review will document what some leading hotels are doing to cultivate and manage guest satisfaction in their operations.