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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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Coming Up In The March Online Hotel Business Review


Feature Focus
Hotel Human Resources 2015: Recruiting and Retaining the Best Employees
Due to the ever-increasing demands for improvements in guest experience, intense pressures are brought to bear on hotel workforces, as well as on the Human Resource professionals who are responsible for recruiting, training and retaining them. Meeting and exceeding guest expectations requires a substantial investment in recruiting and development, so that top talent can be hired, and career paths can be established to ensure the continuation of five-star service performances. So important is staff development that most HR professionals believe that retaining and rewarding their best employees, and cultivating the next generation of corporate leaders represent their greatest challenges. And they are expected to accomplish these feats at a time when competition for in-demand skilled talent has never been greater, and when HR budgets are still constrained due to the slow-growth recovery following the Great Recession of 2007-2009. HR strategies continue to evolve as social media has become an accepted means for recruiting purposes, and there is also a greater emphasis on metrics so that investments in HR practices and policies can be measured and justified. In addition, issues surrounding demographic changes in the workforce are being addressed. A large percentage of existing workers are ageing out of the industry, just as the Millennial generation is entering it, and there is also greater diversity in the workforce which affects many aspects of HR operations. The March Hotel Business Review will examine some of the challenges facing HR professionals, and will report on some of the best practices they are employing to achieve their goals.