Valuing a hotel or resort property is a complex process that goes beyond simple real estate appraisal. In the Philippines, as in many parts of the world, it’s essential to distinguish between the valuation of the property itself and the business operations that drive its income. This dual approach – evaluating both real estate and business assets – is known as “business valuation.” Understanding this distinction is crucial because an accurate valuation can mean the difference between a successful acquisition or merger and a risky investment.

Understanding Hotel and Resort Properties

Hotels and resorts differ significantly in structure and operation. City hotels are often high-rise buildings that cater to business and urban travelers, while resorts tend to be located in popular tourist destinations and usually offer villas, lodges, and expansive spaces. The revenue generation capabilities of these properties also differ, as city hotels rely heavily on room bookings and catering services, while resorts may have additional revenue streams from activities, events, and outdoor experiences. For any hotel or resort valuation, it’s essential to consider vacancy rates, room rates, selling price, and income from various sources.

Our Portfolio in Hotel and Resort Valuation

At AA+ Appraisal & Consultancy, we have extensive experience appraising some of the Philippines’ most sought-after hotel and resort properties. Our portfolio includes a diverse range of locations, such as:

• Islands Resort in Northern Samar
• Fun Park & Resort in Dasmarinas, Cavite
• Beachfront properties in Panglao, Bohol
• Prime beach resorts in San Vicente and Puerto Princesa, Palawan
• Hotel and Resort in Cordova, Cebu
• Mountain Resort in Pinamungajan and Toledo Cebu
• Exclusive beachfront sites in Punta Engaño and Tabogon, Cebu
• Five-star hotels in Cebu City and other major destinations

Our team’s expertise in valuing these high-profile locations, which attract both local and international tourists, enables us to deliver accurate and reliable appraisals that reflect the true potential of each property.

Key Valuation Approaches for Hotels and Resorts

1. Cost Approach: This method focuses on the cost of land and building improvements, plus the cost of materials and equipment used in hotel operations. This approach can provide a reliable baseline, but it may not fully capture a hotel’s revenue-generating potential, especially if the valuation excludes certain equipment or decorations.
2. Market Approach: For properties with substantial market data, the market approach offers a more comparative valuation based on similar hotels or resorts. It’s critical, however, to have detailed information on comparable properties to perform an accurate market comparison.
3. Income Approach: Since hotels and resorts are revenue-driven properties, their valuation often hinges on projected income and profitability. Factors like occupancy rates, average room rates, and food and beverage sales provide a clear picture of a property’s income-generating potential. Additionally, for properties managed by hotel chains, an understanding of management contracts and performance benchmarks is necessary for a comprehensive valuation.

Importance of Expert Valuation Services for Owners and Investors

Valuing a hotel or resort property is more than just a calculation – it requires a nuanced understanding of the market, operational revenue streams, and industry trends. Here’s why expert valuation services are indispensable:

• Informed Decision-Making: A detailed and credible valuation report empowers owners and investors to make informed decisions. Whether developing a new hotel, investing in a resort, or expanding a portfolio, a well-researched valuation reveals a property’s true potential.
• Credibility and Accuracy: Expert appraisers bring industry knowledge and experience to the table, ensuring that valuations are both credible and accurate. This is especially important for lenders and financiers who need reliable data to support refinancing or loan issuance decisions.
• Tailored and Timely Reporting: Hotel and resort valuations often require tailored approaches due to the unique nature of each property. Professionals provide customized reports that are delivered on time, even for portfolios of various sizes and locations, allowing clients to move forward with confidence.
• Market-Specific Insights: Changes in real estate markets, local regulations, and competitive landscapes affect hotel values. Professional appraisers stay informed about these shifts, using advanced methodologies and analysis to adjust valuations accordingly.

Required Documents for a Comprehensive Hotel Valuation

Accurate hotel valuations rely on a comprehensive set of documents, which may include:

• Land ownership documents
• Building permits and plans
• Business licenses and occupancy rates
• Financial statements of business operations over the past three years
• Environmental Impact Assessments (for larger hotels)
• Management contracts, where applicable

Partnering with Experienced Professionals

The valuation of hotels and resorts requires specialized knowledge and experience, as these properties are often more complex and financially dynamic than standard real estate assets. At AA+ Appraisal & Consultancy, our appraisers are experts in hotel and resort valuation, equipped with in-depth market insights and a commitment to delivering reliable, actionable results. Our services help owners, investors, and financiers achieve clarity and confidence, enabling them to pursue their projects and investments with a firm grasp of the property’s worth.

By leveraging our expertise, particularly in high-demand areas like Panglao, Palawan, and Cebu, you gain an edge in understanding the full value and potential of your hotel or resort property.