Hospitality

Full-service to extended-stay: RevPAR, going-concern valuation, and brand-standard compliance.

Property Types

  • Full-service hotel (F&B, meeting space, concierge)
  • Select-service (limited F&B, focused amenities)
  • Extended-stay (kitchenette suites, weekly+ stays)
  • Boutique / independent lifestyle hotel
  • Resort / destination property
  • Convention / conference hotel

Physical Attributes

  • Key count and average guest room size (SF per key)
  • F&B outlets: restaurant, bar, banquet, room service capacity
  • Meeting and event space: ballroom SF, breakout rooms, AV infrastructure
  • Brand affiliation and franchise agreement terms (PIP requirements)
  • RevPAR positioning within competitive set (STR comp set definition)

Value-Add

  • Property improvement plan (PIP) execution to meet brand standards
  • F&B concept refresh: new restaurant operator, lobby bar conversion
  • Repositioning / rebrand: flag change to higher-tier franchise
  • Loyalty program migration and revenue management system upgrade
  • Meeting space expansion to capture group and convention demand

Appraisal Approach

  • Income approach with going-concern value allocation: real estate, FF&E, business value
  • CUSPAP and USPAP hospitality standards for component allocation
  • RevPAR-based comparable analysis within STR-defined comp sets
  • Management fee and franchise fee deductions below the NOI line

Management

  • Gross operating profit (GOP) management and departmental P&L review
  • ADR and occupancy optimization through revenue management systems
  • OTA dependency management: channel mix, commission rates, direct booking incentives
  • Brand standard compliance: quality assurance inspections, PIP timeline adherence

Strategic Concepts

  • RevPAR growth: ADR-driven vs occupancy-driven strategy trade-offs
  • Cap rate vs exit multiple: hospitality valued on trailing and forward metrics
  • Distressed acquisition opportunity in cyclical downturns
  • Management contract vs franchise: operator selection and alignment of incentives
  • Seasonality management and revenue diversification across demand segments

Related topics

Going Concern Value in CRE AppraisalDCF Valuation in Commercial Real EstateNet Operating Income (NOI) in Commercial Real EstateOpportunistic CRE Investing: Risk, Return, and StructurePro Forma Analysis in Commercial Real EstateCapital Expenditure Planning in CRE Asset Management
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