Valuation and appraisal: A key to decision making

Considered high-risk/high-reward investments, hotels may be the most challenging type of asset to value. Combining real estate with an operating business, hotels have high operating leverage and economic sensitivity, and they are management, marketing, energy and capital intensive. Despite this, hotels generally generate favorable long-term yields among institutional-quality real estate investments. Proper valuation requires a combination of strong valuation fundamentals, detailed operational knowledge and real-time access to proprietary competitive trends. These skills represent the starting point for the PwC Hospitality & Leisure valuation team.

If this is your situation

• You are considering a bid on a large portfolio of select-service hotels and you need to determine which properties to hold and which to sell.
• You are involved in a dispute about partnership interests.
• You want 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 need to underwrite a complex, mixed-use leisure development consisting of multiple hotels, a casino, resort whole- and fractional-ownership residential units, and a marina.

How PwC can help you

Fully dedicated to the lodging industry, PwC professionals hold the highest designations in appraisal certification (MAI) and real estate consulting (CRE). Combining financial expertise with industry knowledge, we help our clients understand the issues that underlie value and provide them with the most comprehensive and reputable valuation services in the hospitality industry. We recognize the individuality of each valuation engagement and develop a scope of services that emphasizes the most important issues. While fundamental valuation theory applies across all projects, each hospitality asset's unique characteristics are critical to accurately understand its underlying value. Our extensive range of industry valuation expertise can help you resolve issues involving:

• Portfolio size
  We perform valuation services for single-asset appraisals to 100-plus asset portfolios.
• Asset size
  Our group's experience extends to valuing hotel assets of every size from boutique properties to full-scale, mixed-use resorts.
• Property use
  We possess experience in asset valuation for every use of the hospitality industry from conference centers to casinos to convention hotels and mixed-use developments.
• Chain-scale
  Our valuation experience ranges from the most basic of economy-segmented assets to the most recognized and prestigious of luxury assets.
• Use of valuation
  Our valuation services help our clients secure financing, execute transaction due diligence, evaluate tax and insurance, and make a multitude of other investment decisions.

Offering value to our clients

PwC's hospitality and leisure clients benefit from our responsiveness, efficiency, accuracy, commitment to using the best industry data, renowned research and econometric models, and comprehensive analysis. Our extensive engagement experience, combined with access to more databases featuring richer informational data, often makes us the first choice for many high-profile institutions, lenders and owners, and we are frequently called upon to perform valuations too complex or too large for other firms. Whether valuing partnership interests, appealing tax assessments, exercising transactions options or securing financing, we provide you with sound and comprehensive analysis from which to base critical business decisions. Further, we provide litigation support services to stand behind our analyses in a legal environment or for use in disputes requiring expert testimony.