Hotels and other lodging businesses are among the most complex types of investments. We believe whether you are placing debt, investing equity or entering into a franchise or management relationship, understanding the underlying dynamics of supply, demand and pricing is critical to making informed decisions and affects the success of investors, lenders, operators and hotel companies.
To help meet these and other challenges, PwC teams provide advisory services to offer you the tools to make profitable, educated decisions.
If this is your situation
- You are looking to acquire a lodging REIT, but there is market or competitive uncertainty that might impact the current or future value of the underlying assets.
- You are competitively bidding on a portfolio of hospitality assets and your return on investment will be tied to the amount of value you can create by improving the properties' positions in the marketplace.
- The major demand generator in your market moved and you need to address your property's business strategy going forward.
- Your management team came to you with a comprehensive expansion plan and wants you to sign off on a major capital spend.
- A borrowing group defaulted on its loan and you foreclosed on its off-shore resort property.
- As an institutional investor, you acquired a portfolio of hotels spread across the country.
- Your management company walked out on your property, leaving line-level employees and middle managers, but no senior-level direction.
- You feel pressure from investors as a result of deteriorating financial ratios.
- You recently purchased a portfolio of hotels and made a commitment to significant capital expenditures or a repositioning.
How PwC can help you
Our network of experienced Hospitality & Leisure professionals is committed to analyzing your specific market(s). This analysis of market conditions in which a hotel will operate includes an evaluation of current and future competitive supply, including brand representation, demand trends, market positioning, management effectiveness, unique characteristics of demand generators and external factors such as macro- and micro-economic events that affect a lodging market.
Our lodging services include:
- Site analysis and selection
Our specialists conduct inspections of development sites to assess location attributes including access, visibility, proximity to demand generators and perceived strengths and weaknesses relative to other competitive hotel facilities and locations.
- Market research
We define and evaluate the local market area to assess market conditions and to identify factors that may positively or negatively influence future demand trends and usage of a hotel’s accommodations. Our professionals assemble and analyze key economic and demographic data pertaining to the overall area to evaluate the present economic climate and to estimate the future growth potential of lodging demand.
- Supply analysis
Our specialists develop a census of competitive lodging facilities, including the type, number and quality of guest rooms, meeting/banquet space, ancillary amenities and other facility considerations.
- Future supply
We identify proposed hotel developments and changes to the existing competitive room supply.
- Demand analysis
Our lodging specialists estimate the growth rates for lodging demand by demand segment, based on the factors studied in the market analysis that may affect future room demand, and they estimate the potential market penetration of this demand by a particular hotel.
- Brand and operator selection assistance
We provide assistance in the solicitation and evaluation of brand affiliations for a given location, the selection of an operator for management and negotiation of agreements.
- Facility programming
Our professionals analyze a facility’s programming, including number and mix of guest rooms, meeting space, food and beverage outlets, and amenities to position a property.
- Pricing strategy
We assess a property’s existing or contemplated pricing strategies and identify potential changes to market positioning.
- Financial analysis
Our teams analyze revenues and expenses including: occupancy and average daily room rate; other departmental revenues and expenses; administrative and general expenses; marketing costs; energy and property maintenance expenditures; fixed operating costs; construction and development costs; expected ongoing capital expenditures; cash flow; and potential returns.
Improving return on investment
Whether buying, selling, financing, refinancing, repositioning, renovating or holding a lodging asset, PwC Hospitality & Leisure specialists possess the in-depth experience you need to help make strategic business decisions. Many of our staff members have come from public and private hospitality companies or Wall Street firms.
Our clients include owners, hotel companies, independent management companies, rating agencies, lenders and public and private investors. Institutions that hold direct investments or stock often look to the professionals at PwC for our research and industry insight to help address their immediate, medium and long-term plans.
What sets PwC apart is our ability to help you maximize your return on investment by providing comprehensive research of past and likely future industry trends, then analyzing supply issues and effects that will impact your bottom line.