Our Method

Learn about our valuation method.

Valuation Methodology

IHA utilizes three approaches to value (Income, Market, and Cost) and relies upon four separate reliable methods of valuation.

Income Approach

  • Discounted Cash Flow Method
  • Direct Capitalization Method

Direct Comparison Approach – Estimate of Value per Key base upon Market Transactions

Cost Approach – Estimate of Underlying Land Value as a Check against the Going Concern Valuation

IHA’s Discounted Cash Flow is second to none in the industry, and relies upon an 11 year forecast model, which utilizes our own sophisticated stabilization and projection methods. IHA’s Direct Capitalization method acts as a check against the Discounted Cash Flow method to ensure that the valuation is accurate. Further, IHA utilizes its database of the most recent and up to date hotel sales information in order to provide an opinion of value by the Direct Comparison Approach. Typically, we rely upon 10-15 sales in rendering an opinion of value by this method. 

Finally, the Cost approach is relied upon in circumstances where the hotel is functioning at a value less than its Highest and Best Use. The purpose of the Cost approach in these scenarios is to assess whether the underlying land value exceeds the present going concern value.

Technology

Technology is a primary focus area for International Hotel Appraisers. We believe that by utilizing the most current technology available, we can ensure that our clients receive an accurate and timely appraisal. In fact, IHA has created its hotel valuation software, which relies upon our own proprietary valuation methodology as well as data from our unique database storage and data collection systems. IHA software is not available for public distribution and is only available to licensees of IHA, International Hotel Appraisers Inc.

Econometrics

Recognizing a need in the market for reliable data, IHA has created an econometrics division specializing in providing the most reliable and up to date data to our clients. IHA’s market data database includes information collected by our in-house hotel experts. Our econometrics division focuses on providing our appraisers with traditional hotel performance metrics such as Occupancy, ADR, and RevPAR data, as well as hotel sales data, stabilized cap. rate information, accommodation pipeline reports, and market segmentation analysis.

Confidentiality

IHA pledges to maintain the strictest confidentiality of all sensitive aspects of client information. All IHA appraisers are members of professional organizations and licensed under provincial and state laws; thus any breaches of codes of ethics or laws are dealt with the utmost severity.

valuation method

Our valuation method is #1 in the business. 

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