Hotel business valuation is the method of deriving a fair market value for your business. Whether you are interested in buying or selling a business, assessing its correct value should be your first priority. Consider all factors when you value a hotel business, such as the number of rooms you have, the number and types of hotels in your area and the types of tourist amenities in the area. As there are multiple factors going into assessing your business’ worth, there are also a few different ways in which you can come about the information. You can use an outside valuator to assess the fair price of a business or do it yourself. There are plenty of valuation resources offered.

Getting a business assessment is a very useful tool to help you make sound business choices. Follow these steps to find your hotel business’ worth:

1. Get business valuation software to gauge your hotel business’ worth yourself.

2. Think about a local business appraiser and profit from in-person meetings.

3. Use helpful resources to value a hotel business’ unique sector.

Action Steps
The best contacts and resources to help you get it done

Appraise a hotel business with specialized software solutions that incorporate industry factors

Being able to value your business can help you obtain financing if you ever want to open up other hotels or improve or remodel your existing one. It will also assist you with deciding on a selling price if you ever want to give it up. Learn how to value a business by using helpful hotel business valuation software solutions that are available online. These tools have the factors and formulas created especially for valuating a hotel business already written into the program, ensuring that you will get an accurate report that takes into account your area, as well as the nation's hotel business market.

I recommend: RDS Associates offers a software called BizPricer that can determine the market value of any type of business that has at least three years of income and expense data. Business-Valuations.biz is an online tool that allows you access to their business valuation tool for the specific amount of time you purchase. In that time frame you can value any number of your hotel businesses. This is a cost-effective method if you want to run a business valuation on more than one location.

Work with a local specialist with experience in the industry to purchase a hotel appraisal

When looking to value a hotel business, a local professional will have a better idea of regional economics, allowing you to time the sale of your business better, for example. They will also be able to meet with you and explain the different reports and formulas that are necessary for a proper hotel business valuation.

I recommend: Gifford, Hillegass & Ingwersen is located in Atlanta and have many years of experience in hotel business valuation. Paradigm Hospitality provides business valuations for hospitality industry assets. They are located in Los Angeles.

Make use of important business reports to appraise a hotel business' distinctive sector

A general economic report will show how the overall economy is faring. A hotel industry-specific report will go into much more detail regarding the performance of the hotel sub-division you are in. This gives you all of the information you will need when you go to value a hotel business.

I recommend: Industry Eye has industry specific reports needed for a hotel business valuation such as an industry financial date report. Infiniti Research is a good resource to find industry-specific information such as hotel market sizing and forecasting.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Since hotels generally have more rooms than they will normally book, most use discount services to book vacant rooms at lower prices. Allow for this lower revenue when you are forecasting your sales figures for the coming years as you are preparing your hotel business valuation.