Hotels are the riskiest of the major real estate investment options. They are dynamic businesses and unlike any other type of real estate.
This is why prudent hotel investors go through a thorough due diligence process, using independent experts who, apart from real estate, understand all key aspects of the hotel business that influence the current and potential value of the asset.
Not only do we verify information that was brought up during the deal process and identify potential defects, we evaluate various hotel specific factors to obtain information that would be useful in valuing the deal.
Our insights and practical understanding of hotel operations, as well as our knowledge of market supply and demand, makes Horwath HTL an invaluable member of your due diligence team.
- Evaluate the Physical Asset, Facilities & Standards
- Analyse the Hotel’s Competitive & Market Position
- Assess Short, Medium & Long Term Capital Expenditure Requirements
- Review Historical Performance against Industry Benchmarks
- Analyse Proforma Financial Statements in View of the Market Outlook
- Conduct a Market Demand & Supply Study, if preferred
- Consider Immediate Operational Improvements to Support Future Cashflows
- Evaluate Brand and/or Marketing Affiliation
- Evaluate Proposed Performance Improvement Plan (PIP)
- Assess Management Agreement for Terms that may affect Future Returns
- Negotiate with Brand Company
- Consider Potential Risks from Deferred Maintenance, Capital Spending or Unsustainable Cost Containment applied to increase the Sales Price
- Assess Potential Liabilities arising from Supply and Employment Agreements
- Review Information Technology Systems
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