Things to Consider When Buying a Hotel and How to Avoid Potential Pitfalls

In simplistic terms, the value of a hotel is the price that a prospective purchaser will pay for the property if it has been effectively marketed. There are many things that determine the price that potential purchasers will pay for the property, including potential earnings from the property, the need to provide geographic coverage to maintain the integrity of a brand and potential increases in value of the asset over a period of time. A big proportion of larger hotels are purchased (and sold) with the above criteria in mind, where returns on capital employed are considered to be just as important as strategic ones.