The value and risk of investing in a hotel (iii). Asset Assessment and Pricing(B).
Methods involved in hotel value assessment
1, market comparison method
Market Comparison: Compare the prices of similar hotels that have been successfully traded recently
This approach is more difficult to achieve, even if the hotel size and construction costs are close, it is more difficult to compare. Each hotel’s own characteristics are different, the geographical location, the hotel guests received, as well as the hotel design style is not the same. In particular, high-end hotel projects are more diverse and cannot be corrected with samples.
The valuation of the hotel market comparison method can only be used as a reference value for the hotel valuation. According to the sample comparison of the hotel’s different characteristics, a wide range of reference valuation.
2, cost method
The cost method consists of two parts: hotel fixed assets and revenue profit (depreciation is required). Take the sum of the two parts as a preliminary valuation.
Hotel fixed assets: This easier means of approval can be based on the total development costs of the hotel preparation and the sum of the financing costs of the hotel construction funds.
Revenue profit: After valuation based on operating profit in the hotel industry, the depreciation is deducted (estimates of the mutually agreed hotel payback period, net of the annual construction costs incurred). ）。 Fixed assets may also be deducted from depreciation and operating profit shall not be depreciated when the actual assets of the hotel are valued after the sum.
The hotel construction cost method can only analyze the past revenue data, the hotel is in different stages, its income is also different, for the better-yielding hotels it is difficult to objectively reflect the value of the hotel’s future earnings. Therefore, it can only serve as the basis for comprehensive pricing.
3, income method
Income law is also known as income capitalization method, income reduction method. The yield method is the future net profit of the pre-valued hotel, which is added after selecting the appropriate rate of return or capitalization and the profit multiplier to discount it to the point of valuation. To estimate the objective reasonable price or value of the hotel, predict the future return of the hotel, use the rate of return or capitalization, the income multiplier to convert it into value to obtain the value of the valuation object.
Financial experts are more simply based on this data, combined with the stock market to assess the price-earnings ratio(PE)used by companies to roughly value hotels. The approach is too single, ignoring the hotel characteristics and hotel operating characteristics. The hotel’s stage period is longer, the operating profit value of the previous stage is estimated as the profit of the future stages, the deviation will be very large.
Through the above assessment method to assess the advantages and disadvantages of hotel real estate value, the hotel value comprehensive assessment should be used to price hotel assets.
Hotel asset pricing principle
In the principle of enterprise asset pricing, there are two main forms of enterprise value: book value and market value. Book value is the total assets and net assets reflected on the balance sheet, mainly reflecting historical costs. Market value, such as the market value of the stock, the price paid in the merger and acquisition, etc., mainly reflects the number of future earnings.
There is a big difference between book value and market value, which can’t really reflect the future income of the hotel. Book value is mainly used for accounting purposes, and investors in capital markets are concerned about the market value of hotels. The value of a hotel is essential because it can operate to generate future cash flow for investors. The value of assets is more to consider the hotel’s ability to generate cash flow in the future, the hotel’s asset prices to the hotel’s business value as the core, and ultimately reflected in the hotel’s property value.
The main factors affecting the price of hotel assets are: the essence of hotel asset value is the combination of property value, business value, and potential value in the era of big data.
1, hotel business value
Whether the hotel’s market positioning is in line with the future development trend of the hotel, for hotel owners, the use of the right management methods to improve the efficiency of hotel operations, can greatly increase the saleability and market value of hotel assets. Hire the right operators and adopt advanced management methods to enhance the saleability and market value of the hotel.
The business value of the hotel is reflected in the improvement of the hotel’s operating efficiency, which is directly subject to the hotel’s own cash flow. The hotel’s operating performance is closely linked to the return on investment of the hotel’s owners. It is important to ensure that the hotel achieves a high degree of professional operation, improve the efficiency of the hotel operations, thereby enhancing the value of the hotel.
2, hotel property value
The value of a hotel property is the existing value of the hotel’s future earnings. Experienced investors take future risks and return on investment into account while caring about the hotel’s cash flow. As a result, hotel value is increasingly affected by market conditions, investor willingness, and hotel performance.
The “hidden return” of hotel property value to owners can be achieved through equity premium transfer or oversubscription in the capital market. The realization of hidden returns is closely related to the hotel boom cycle. Hotels benefit from the sale and acquisition of hotel assets between different hotel boom cycles while complementing the rest of the portfolio to maximize investment returns.
Hotel investment with the development of the hotel capital market has been more rational. The evaluation method of hotel value, the valuation performance of hotels, and hotel investment strategy are all the most important concerns of hotel investors.
3, hotel big data value
The hotel’s high-quality membership is an extension of the hotel’s potential value and another touchpoint for cross-border corporate investment in high-end hotels. High-end hotels Investors early on focused on the promotion of local government and social influence and corporate image. In the age of big data, customer information value will also be considered as part of hotel value.
The value of a hotel management company is not only how many hotels to manage, how many hotel rooms, the core value is how many active members. The hotel management company’s business direction is relatively single and failed to hotel members this big data information has a good way to use.
High-end hotel member information collection, accumulation, integration, optimization, which is also the hotel investors can expect value, but also the value of the hotel. Hotel member diversion and effective use of the way has been a lot of enterprises began to try, if this hot spot can get a good value effect, then the advantages and disadvantages of data information will also become another additional valuation of hotel value.
The battle for hotel property acquisition by real estate enterprises has been ignited, and I believe that the large-scale acquisition of hotel brands by real estate enterprises will not be far away.
