Hotel Valuations: the Income Capitalisation Approach

Abstract

Discusses hotel valuations based on a ten‐year forecast of income and expense and a discounted cash flow analysis allowing a valuer to factor in a recovery in demand. Argues that many practitioners would agree that the most reliable estimate for open market value for a hotel is arrived at by examining the profit potential of the subject property. Concludes that the importance of this approach should be based on a long term forecast of income and expenditure in today′s marketplace where hotel values, as with other forms of commercial property, have suffered a decline.

Citation

Menorca, E.S. (1993), "Hotel Valuations: the Income Capitalisation Approach", Journal of Property Valuation and Investment, Vol. 11 No. 3, pp. 211-216. https://doi.org/10.1108/14635789310027301