How to evaluate the value when buying a hotel project?

Before buying a hotel, it needs to be valued. The cost of hotel construction and facilities, the level of hotel net income and performance, industry market and future rate of return are closely related to the valuation of hotel projects, which directly affects the level of hotel transaction turnover.

In order to ensure the accurate valuation of hotel projects, buyers and sellers or valuation agencies involved in the valuation will value hotel projects through replacement cost method, transaction amount comparison method, single capitalization ratio method and synchronous valuation formula method.

The acquisition of hotels needs to be appraised in advance, and the replacement cost method is applicable to newly opened hotels. The replacement component method is a traditional valuation method. Its calculation method is to subtract the depreciation from the hotel construction cost (based on the service life), and the final result is the hotel value.

When some newly opened hotels are sold, their construction costs and infrastructure investment will not depreciate too much. In addition, hotel net income, industry market and future rate of return are less affected by time. Therefore, they will be valued by the replacement component method.

In addition, when the hotel project is hindered by the government and policies in the preparation process, or it cannot be continued due to some uncontrollable factors, this valuation method can also be used to evaluate the project and provide reference data for the acquisition.

Taking the recent transaction amount of the hotel as the reference element of valuation is more acceptable to both parties. For hotel buyers and sellers, the recent transaction amount of the hotel can reflect the current market situation. Therefore, when buying a hotel, some sellers only pay attention to the recent transaction amount of the hotel, and the appraisal agency will advise the buyer to provide the transaction data that can be confirmed and compared in time to facilitate the acquisition of the hotel.

Different from the replacement cost method, the recent hotel transaction volume does not involve the cost of hotel construction and facilities, but only collects the relevant data of the recent hotel transaction volume. However, once the data provided by the hotel or the data collected by the evaluation agency are deviated, it will harm the interests of the acquirer.

Capitalization ratio is the main factor of hotel valuation at present, and it is determined by the market, which fundamentally ensures the objectivity of value. The appraisal agency takes the ratio of the hotel's net income to the capitalization ratio in a certain year as a reference, and then determines the hotel's valuation data. Similar to the replacement component method and the transaction amount comparison method, the single capitalization ratio method does not consider the future rate of return of the hotel. Therefore, in order to understand the future economic benefits of the hotel, the appraisal institution must combine other appraisal methods as a reference.

The synchronous valuation formula method adds the future income of the hotel to the valuation, and the valuation process is complicated. The synchronous valuation formula method is similar to the discounted cash flow method method. The future income of the hotel is added in the valuation process, and the installment repayment period, value ratio and interest rate of the hotel loan are taken as reference factors, so the valuation process is complicated.

However, the seller's purpose of buying a hotel is to invest. It is forward-looking to predict the future income of the hotel through the synchronous valuation formula method, which considers many factors and the valuation results are convincing.

In addition to the above valuation methods, hotel evaluation can also use income reduction method, cash flow discount method, joint investment method and so on. However, no matter how to estimate the value of the hotel, it is inseparable from factors such as the cost of hotel construction and facilities, hotel income and performance, and future income. If you want to know how to estimate the hotel value, you need to make a judgment according to the specific situation in order to be objective and fair.