Hotel Valuations: the Income Capitalisation Approach Available to Purchase

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.