Transaction services: How to drive decision making
The intricacies of the hospitality industry and the intensely complex nature of hospitality operations fuel the need for sophisticated analysis of the risks and rewards associated with potential investments or divestitures. This complexity, combined with increased pressure to maximize return on investment in a volatile economy, further stresses the need for such analysis.
PwC specialists' thorough understanding of the hospitality and leisure industry allows us to provide insightful services to buyers and sellers. We offer solutions that support the need to make important decisions before a transaction and to enhance value after a transaction. In addition to helping you determine the accuracy of financial information, our transaction services professionals help you understand the performance of the intended target and how it relates to projected market conditions and competition.
If this is your situation
- You are considering acquiring a lodging company, but there is market or competitive uncertainty that might impact its current and future value.
- You are looking at buying a casino company, but market saturation and potential anti-trust rulings could impact growth projections set by management.
- After completing your initial due diligence on a hospitality company, the revenue and EBIT projections put forth by the seller appear to be aggressive relative to historic levels.
How PwC can help you
From a single asset to portfolios of 100 or more properties, our professionals provide an industry-dedicated team approach to each transaction. This approach is supported by hospitality research that leads the industry in econometric-based national and local market forecasting.
PwC teams serve the hospitality industry in mergers and acquisitions advisory, due diligence support and related transaction services.
As an investor enters the due diligence process for a potential acquisition, our professionals perform the research and analysis that supports the final decision on the purchase of an asset or a portfolio of properties. Our services include analyses of market performance trends and property historical operating performance; financial analysis of estimates of future performance property by region, chain scale, brand and lender; and evaluation of management contracts, franchise affiliations, tax assessment levels, technology, life safety, competitive positioning, local market risks, and property improvement plan requirements and capital expenditures.
Valuation of individual assets and portfolios is often an element of our transaction services solution. Individual property appraisals form the foundation for financing and equity investment decisions, while the ability of our specialists to analyze overall portfolio values through rollups by lender, region and brand offers the essential intelligence into the portfolio's performance against initial investments and against local and national trends. Our Hospitality and Leisure professionals combine financial knowledge with industry experience to provide our clients with the most comprehensive and reputable valuation services in the hospitality industry.
- Portfolio analysis
PwC teams analyze portfolios to provide a lender, owner or asset manager with a performance-driven perspective of the current state of the portfolio and prospective financial statements over a the holding period. Our specialists develop dynamic, client-specific financial models that measure the strength of the entire portfolio, specified segments and individual assets under a series of scenarios.
The scenarios incorporate:
These detailed evaluations offer perspectives on non-strategic assets, gaps and maximization of performance through a portfolio approach to management.
- A property and market inspection
- An analysis of lodging market dynamics
- An evaluation of the competitive supply
- An evaluation of projects in the development pipeline
- A detailed line-item analysis and prospective financial analysis
- A cash-flow sensitivity analysis
Providing key information
The transaction services offered by our professionals provide clients with key information and analysis throughout each stage of a transaction. Access to this knowledge helps drive your strategic decisions and enables you to maximize your return on investment.