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Hotel Valuation: A Look at the Main Approaches and Key Valuation Components

By Russ ReynoldsValuation Methodology • 4th April 2011

 

Hotel valuation is a subjective process that involves many variables and assumptions. Consequently, the final value or value range can vary greatly from one appraiser to the next. However, it is important to remember that at the end of the day the valuation results must hold up to the “reasonable appraiser” test. The value estimated is dependent upon the purpose of the report and the Approach taken. For instance, an appraisal for insurance purposes will invariably result in a much different value than an appraisal for mortgage financing purposes. The following is a look at the three Approaches to value…

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