Real Estate Division

CPD 104 - Hotel Valuation

Pre-requisite: Recommend BUSI 331 or a thorough understanding of the theory and application of income valuation.

These lessons introduce hotel appraisal, examining the reliability of each of the three approaches to value and the supply and demand factors which affect a hotel's income producing potential. The second lesson provides a practical demonstration of hotel valuation, focusing on the identification and analysis of relevant market factors, and the application of the income approach (discounted cash flow) and direct comparison approach.

Course Outline

Foreword: Introduction to Professional Development Courses

Lesson 1: Appraising Hotels

  • Instructor's Comments
  • Introduction to Hotel Valuation
  • Executive Summary
  • Nature of the Assignment
  • Description of the Real Estate
  • Description of the Improvements
  • Assessed Value and Taxes
  • Market Area and Neighbourhood Analysis
  • Supply and Demand Analysis or Competition
  • Market for Transient Accommodations
  • Forecast of Occupancy and Average Room Rate
  • Highest and Best Use
  • Approaches to Value
  • Reconciliation of Value
  • Conclusion
  • Glossary
  • Review and Discussion Questions

Lesson 2: Hotel Case Study: Super 8 Hotel

  • Introduction
  • Direct Comparison Approach
  • Income Approach
  • Review and Discussion Questions

Afterword

  • The Final Examination

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