How do you value hotels ?

[Hobo]

As per the title, how do you value a hotel ?

The one in question is a 24-bed with seperate restaurant & function room facility in a nice area of Leeds.

[Chrisgr31]

Hobo said:

As per the title, how do you value a hotel ?

The one in question is a 24-bed with seperate restaurant & function room facility in a nice area of Leeds.

Depends what for! Often on income, but they are a nightmare as it will depend on the number of stars, whether they are in a chain etc.

Some work on a formula of the number of beds!

[vwanorak]

Chrisgr31 said:

Hobo said:

As per the title, how do you value a hotel ?

The one in question is a 24-bed with seperate restaurant & function room facility in a nice area of Leeds.

Depends what for! Often on income, but they are a nightmare as it will depend on the number of stars, whether they are in a chain etc.

Some work on a formula of the number of beds!

Also look at rate / occupancy (REVPAR) growth over the past couple of years, paying particular attention to more recent (3-4 month) trends and business on the books. It will all come back to ROI in the end.

Good luck - it's a nice business to be in, but can be tough where the ecconomies of room count (sub 70 or so rooms)are lower.

Andy

Edited by vwanorak on Friday 7th September 11:47

[rpguk]

Obviously if the freehold to the property is included, that'll have a big impact on the value and what others are willing to offer, it could be a terrible business with no prospects but if the buildings ripe for redevelopment it'll sill attract a lot of interest.

[srebbe64]

Go on a few web-sites of agencies selling hotels and get a feel for the market. Ultimately, the market will dictate value not any particular formula.

[Noel]

It's a specialist area of valuation, need to establish the profitabity of the business itself, the value of the building and stock. Get a chartered surveyor on the case....

http://www.ricsfirms.com/vw/search/location.aspx