Consulting
New Appraisal Method Could Limit Lending
If you‘re not a real estate appraiser, you’re probably unaware of a major catastrophe looming that could effectively eliminate all types of hotel financing, making it all but impossible to either build or sell a hotel. Under potential new governmental lending regulations, hotel appraisers will be forced to utilize an appraisal methodology that will lower their hotel valuations by as much as 40%, forcing borrowers to finance significantly less of their acquisition prices at greatly inflated interest rates. While this topic is somewhat technical, I will attempt to describe the issues in simple terminology....
Burwash Hits 37 Years of Tennis Management
Peter Burwash has been teaching tennis since the 1970s. After seven years on the professional circuit, he moved into the field in a big way — managing tennis programs for clubs and resorts....
Vendor News April 15, 2012
A roundup of news and notes from hotel vendors....
How to Estimate Hotel Mortgage Interest Rates
In today’s low mortgage interest rate environment, hotel investors need to constantly monitor the cost of financing to ensure they lock-in the lowest possible rate. Generally, a hotel investment consists of a large amount of mortgage money (55%-75% of the total investment) and a smaller amount of equity capital (25%-45%). Thus 55% to 75% of a hotel project's cost of capital ...
Melchiorri Brings Lodging to TV with “Hotel Impossible”
Anthony Melchiorri isn’t a TV personality doing a hotel show. He’s a hotel guy doing a TV show. His resume and approach on camera make that clear from the first episode of “Hotel Impossible,” a new original weekly one-hour series premiering Monday, April 9 at 10 p.m. on the Travel Channel....
Vendor News March 15, 2012
Roundup of vendor news and notes....
Plenty of Opportunities Ahead in 2012
The U.S. lodging market experienced strong demand recovery throughout 2011. However, despite the recovery brought on by a resurgence of corporate travel, average rates in 2011 recovered at a more moderate pace when compared with occupancy. The lodging sector appears coordinated in its efforts to improve average rate as occupancy trends continue to stabilize....
Valuing the Same Hotel Across Five Regions
In a previous column, I showed the development of a projection of revenue, expense and net income for five regions of the world: South America, China, Europe, India and the U.S. These projections were made under the assumption the hotel would be a 200-room Marriott type hotel with identical revenue per available year numbers for each of the five regions. ...
Occupancy During Holidays May Stall, But Rate Won’t
AAA forecasts 42.5 million Americans will travel 50 or more miles during Thanksgiving weekend, a 4% increase from a year ago, and the first significant holiday travel increase of the year. But will those travelers be staying in hotels or with grandma? ...
Vendor News Nov. 15, 2011
A roundup of hotel vendor news and notes....
Hotel Data Guru Lomanno Leaves STR to Pursue Passions
If you’ve been to any hotel industry conferences in the past two decades, you probably know Mark Lomanno. He was the guy from Smith Travel Research with the scores and scores of PowerPoint slides, roaming the stage, talking a mile a minute about his favorite subject: the history, current health and future outlook for the hotel industry. Lomanno, who joined the fledgling Smith Travel Research in 1990, left the company at the end of last month to pursue new business passions and, more importantly, to spend time with his family. ...
Vendor News Oct.. 15, 2011
Recent news and notes from hotel vendors....
Don’t Forget Market Study With Your Appraisal
A hotel appraisal presents an estimate of the market value of a hotel, which simply put, is the likely price the hotel would be expected to sell for on the open market under normal conditions. Since a hotel appraisal concludes with a hotel’s market value, it should include a market study for the hotel. ...
The Truth Behind Hotel Feasibility Studies
Over the years hotel consultants have been blamed for hotel feasibility studies that seem to have missed their mark and came to conclusions that didn’t seem to reflect reality. As a consultant and appraiser who has worked on thousands of my own studies and have reviewed hundreds of studies prepared by others, I have found in many instances users of these studies have unrealistic expectations as to what the results actually mean and ...
Comparing Same Hotel Across Five Regions
I always wondered how a hotel would operate financially if it were located in different parts of the world. To demonstrate these differences and show the impact on the net income, I developed the following side-by-side comparison of the revenue and expense for a proposed 200-room Marriott type hotel, assuming it was located in the following five regions: China, Europe, India, South America and the U.S....
Vendor News Sept. 1, 2011
Roundup of hotel vendor news and notes....
Ins and Outs of Analyzing Feasibility of a Destination Boutique Hotel
Most feasibility studies for new hotels start with a somewhat clearly defined set of competitors. This may not be the case when working on the first hotel in a new submarket. As we recently found, this might also not be the case with a destination boutique hotel in a drive-in market. ...
Values Catching Up to Replacement Cost
Every so often I like to look at the current relationship between a hotel’s market value and its replacement cost. This information is useful in setting strategies for new hotel development, acquisitions, when to buy and when to sell. It can also forecast volatility....
How to Test Hotel Feasibility
When designing a hotel, the architect and development team need to create a project that is ultimately economically feasible. Unless the hotel’s owner is ego driven rather than economically motivated, most investors are looking for a return on their invested capital. Since feasibility means different things to different people, and as a hotel consultant having prepared thousands of feasibility studies, I have been asked to provide my perspective on this topic....
Vendor News June 15, 2011
A roundup of vendor news and notes....
