Periodic posts for hospitality consultants and those considering transitioning to the hotel consulting profession.
Superior Features of a Hotel Investment
Why some hotels are better investments than others. Location is always a top characteristic BUT isn’t the only feature that’s important. Good locations eventually get over-built. Here are a few aspects to consider during your due diligence.
Positioning. Was the hotel actually designed and flagged to capture maximum share?
Condition of the asset. Is it up to current brand standards? How long since last upgrade? The cost of any improvements will have to be added to purchase price for “all in” true cost of investment.
Economic health of the market. Can the economic environment in which the hotel operates be measured?
Proximity to guest room demand generators. Will any new hotel development be closer or more convenient to current generators of room demand?
Quantification of guest room demand by segment – Is a large percentage of guest room demand dependent on a few demand generators?
Barriers to entry. The difficulty level for new hotel development to obtain zoning and permits.
Competition. Is your investment target out performing its hotel competitive set in market share and rate? If not, what will it take to gain market share?
Thinking About Becoming a Hotel Consultant?