IHA International Partners with the BC Hotel Association

IHA International (IHA) and the British Columbia Hotel Association (BCHA) have entered a partnership, effective June 15, 2026, to bring hotel valuation, brokerage and property tax expertise to British Columbia’s hotel community. With this, IHA will be providing market intelligence insights for key BC markets to all BCHA members. In addition, IHA will be launching a pilot program that is focused on one of the main issues facing the hotel appraisal industry today, how to determine how much of a hotel’s value is genuinely real estate. First, let’s review this question in context.

Real Estate and a Business in One Asset

A hotel is both real estate and an operating business. This duality shapes how they’re valued for property tax purposes. Under the British Columbia Assessment Act, a property is “assessed on the actual value of its land and improvements”.¹ Additionally, hotels are required to be valued as a “going concern”, meaning the property is assessed as an operating business running at typical market levels (rather than an empty building).²

The income a hotel generates does not come from land and improvements alone. A hotel is a business that has a trained workforce, brand/franchise affiliation, reservation systems, management, and furniture, fixtures and equipment (FF&E). When a hotel’s operating income is capitalized into a value, the result is a going concern value that bundles all those components together even though only part of that value is taxable real estate.³ The remainder is tangible personal property and intangible Business Enterprise Value (BEV).

Separating the Business from the Real Estate

Separating those components is established appraisal practice. Removing FF&E from a hotel's going-concern value is routine and BC Assessment already provides for it.⁴ The more technical question is the intangible business value. Brand affiliation, an assembled workforce, reservation and loyalty systems and management expertise all contribute to a hotel's earnings, yet none of them are land or improvements.

In British Columbia, the treatment of that intangible value is evidence-driven. An intangible deduction is recognized only where the value is measurable, transferable and not inextricably linked to the real estate.⁵ A general assertion of goodwill does not meet that test. A defensible, market-supported analysis of specific intangible assets is what the framework calls for.

A Pilot Program for Better Evidence

That is the focus of the partnership's pilot program, which aims to establish defensible BEV levels for property tax purposes. The goal is methodical rather than promotional. The pilot aims to build the kind of rigorous, evidence-based analysis the BC framework requires, so that owners and assessors are working from sound numbers rather than broad claims.

IHA's View

The principle that property tax reaches real estate rather than the business within it is well settled. The work is in the evidence. This partnership is designed to put that analytical work in front of BC's hotel owners and to support a clearer, better-supported conversation about how hotels are assessed.

IHA International provides hotel valuation, feasibility and advisory services across Canada and the United States. To learn more about the BCHA partnership, contact our team at info@hotelappraisals.com.