Hotel lobby with gold decor and seating

How to Run a Hotel: Managing Your Hospitality Business

Navigating the dynamic terrain of the hotel industry requires a keen understanding of the pivotal areas that hold the key to success for your investment. In this ever-changing landscape, where competition is fierce and guest expectations are constantly evolving, orchestrating effective strategies becomes more critical than ever. Success is not merely a product of chance but rather the result of meticulous planning, foresight, and unwavering dedication.

For hotel owners and operators, the journey toward prosperity necessitates a collaborative approach, where the collective efforts of key stakeholders, including owners, asset managers, and brand operators, converge harmoniously. Together, they forge a path that defines objectives, nurtures potential, and steers the team towards the realisation of their shared vision.

In this article, we delve deep into the core aspects of how to run a hotel business successfully. We explore the pivotal success factors and strategies that have the potential to transform your hospitality venture into a thriving and enduring establishment. Join us as we unravel the roadmap to prosperity and discover how the amalgamation of these essential elements can lead your hotel business to new heights.

Effective Human Resource Planning

The hotel management landscape has seen significant expansion in recent years, with a surge in development and signings, yet without a proportional increase in corporate office resources. This growth imposes additional pressure on Hotel Executive Teams to devise and implement a unique strategy for their individual hotel.

Due to the rapid expansion of hotel companies, expertise and experience within hotels have become scarce commodities. It’s imperative for hotel owners and companies to invest in effective human resources to ensure the longevity and success of their business. Hotel operators should:

  • Invest in on-site leadership: This includes making strategic appointments of a General Manager and Executive Committee Team with an emphasis on commercial expertise to drive performance.
  • Offer mentoring and support: First-time General Managers and Executive Team members can benefit through “buddying up” with a senior colleague or with regular mentoring programs.

Asset Managers also play a crucial role in mentoring. For instance, Axsia HTL actively mentors General Managers and Executive Committees, which we consider key to the success of a hotel team’s performance.

In the face of global competition for talent across all industries, effective human resource recruitment and retention strategies have become more critical than ever for companies.

Financial Planning for Profitability

As the annual budgeting cycle commences, hotels and hotel operating companies are tasked with preparing a business plan for the upcoming 12 months. While this is a requirement of Hotel Operators, it’s often seen that hotels merely go through the motions of preparing a budget or business plan.

These plans, by nature, focus on the short term (12 months) and are designed to meet the operator’s targets and appease the owner. However, owners typically have longer-term objectives for their assets. It’s incumbent upon Hotel Operators to develop a strategic plan that extends beyond the 12 months.

This plan should aim to grow EBITDA and increase the asset’s value over the long term, which may involve investing more in the short term for long-term financial returns. For instance, a new or renovated hotel might increase its investment in sales and marketing as it stabilises.

How Much Does It Cost To Run A Hotel?

When it comes to the intricate web of expenses in running a hotel, the numbers can be quite staggering. Beyond the initial investment, a hotel’s daily operations entail various costs that significantly impact its profitability and long-term viability. These expenses encompass a wide spectrum, ranging from employee salaries and utility bills to maintenance and marketing expenditures.

Salaries often constitute one of the most substantial portions of a hotel’s operational costs. From front-of-house staff like concierges and housekeeping personnel to back-of-house teams such as kitchen staff and administrative employees, the workforce is a cornerstone of any hotel’s service delivery. Employee compensation is not limited to basic wages; it extends to benefits, training, and, in some cases, incentive programs.

Utilities, including electricity, water, heating, and cooling, are another major cost category. Hotels consume significant quantities of these resources to maintain guest comfort, often leading to substantial utility bills. Moreover, hotels must adhere to sustainability practices to minimise their environmental footprint, necessitating investments in energy-efficient systems and practices.

Maintenance is yet another significant cost consideration. Ensuring the upkeep and aesthetics of a hotel property is paramount, from interior furnishings to exterior landscaping. Repairs, renovations, and preventive maintenance measures are essential to safeguard the property’s value and guest experience.

Marketing is a cost that no hotelier can afford to overlook. To attract guests, boost occupancy rates, and enhance their brand’s reputation, hotels need to invest in various marketing channels. These may include digital marketing efforts, advertising campaigns, and public relations strategies, among others.

Sustainable hotel with solar panels

Sustainable Resource Management

The hotel industry accounts for 1% of global carbon emissions, and research predicts that hotels must reduce carbon initiatives by 90% by 2050 to have any impact on their carbon footprint. Embracing sustainability can also result in financial benefits for hotels, and these days, it forms the basis of how to run a hotel effectively.

Sustainability initiatives in the hotel industry encompass a broad spectrum of practices aimed at reducing environmental impact. These include a concerted effort to minimise energy consumption through measures like the use of energy-efficient lighting, heating, ventilation, and air conditioning systems. Additionally, hotels can invest in renewable energy sources, such as solar panels, to further diminish their reliance on fossil fuels.

Addressing food and plastic waste is another crucial aspect of sustainability. Hotels can implement waste-reduction strategies, such as optimising food portion sizes, donating excess food to local charities, and incorporating composting practices. Reducing single-use plastics in guest amenities and replacing them with eco-friendly alternatives not only curbs plastic pollution but also elevates a hotel’s sustainable image.

Water conservation is paramount, given that the hotel industry consumes vast amounts of water in its daily operations. Implementing low-flow fixtures, regular maintenance checks to repair leaks, and utilising greywater systems for non-potable uses all contribute to significantly decreasing water consumption.

The digitalisation and automation of the customer experience also represent an essential element of sustainable resource management. By minimising paper use through digital check-in and check-out processes, automating lighting and climate control in guest rooms, and employing smart energy management systems, hotels can streamline operations while reducing their environmental footprint.

Streamlining Operations with Technology

The profound impact of the COVID-19 pandemic, along with the emergence of digital-first Gen Z travellers, has catalysed a digital revolution within the hotel industry. Automation and technology enhancements have swiftly transitioned from being optional to becoming indispensable tools for Customer Experience Management (CEM).

One of the most visible changes has been the implementation of contactless solutions, which include mobile check-in and QR codes for menus and ordering. These innovations have drastically reduced physical touchpoints and facilitated a seamless and secure guest experience. Mobile check-in, for instance, allows guests to bypass crowded front desks and head straight to their rooms, while QR codes minimise the need for physical menus and facilitate touchless dining.

Behind the scenes, back-of-house operations have also embraced automation. Functions such as rostering, payroll management, and purchasing processes have been optimised through the integration of technology. Rostering and workforce management software allow hoteliers to efficiently allocate labour resources while adhering to labour laws and regulations. Automated payroll systems simplify salary disbursements and tax reporting, reducing administrative overhead.

Moreover, technology has redefined the procurement and inventory management processes. Automated purchasing systems help hotels optimise their supply chains, monitor inventory levels, and secure the best possible prices for goods and services. This increased transparency within the supply chain ultimately translates to cost savings for the hotel.

Perhaps the most profound impact of this digital transformation is the transition to paperless processes, leading to cost reductions and operational efficiencies. Many hotels are now operating in an environment where paper is replaced by digital counterparts, resulting in streamlined workflows and enhanced guest services.

Further, the data collected through these digital solutions offer an invaluable resource for hotels. The ability to collect, interpret, and analyse data opens new avenues for revenue management, operational optimisation, and sales and marketing strategies. With access to real-time data, hotels can make informed decisions, identify trends, and tailor their offerings to meet the evolving demands of guests.

Customer Relationship Management (CRM) in the Digital Age

In the age of digitalisation, customer relationship management (CRM) has become a crucial aspect of hotel management and forms a critical component of how to run a hotel.

With the help of CRM systems, hotels can gather and analyse customer data to understand their preferences and behaviours better. This information can be used to personalise the guest experience, leading to higher customer satisfaction and loyalty.

Moreover, CRM systems can automate various tasks such as sending out promotional emails or reminders for upcoming stays, freeing up staff time for other important tasks. However, it’s essential to ensure that the CRM system is integrated with other hotel systems for seamless operations and data flow.

Marketing and Branding

In an increasingly competitive market, the effective marketing and branding of a hotel are paramount to attracting guests and establishing a strong brand reputation. A well-structured marketing strategy can significantly impact a hotel’s visibility, customer engagement, and ultimately, its bottom line.

Digital marketing strategies play a pivotal role in modern hotel marketing efforts. These encompass a range of practices, including:

Organic activity on social media platforms, such as Facebook, Instagram, and Twitter, provides an invaluable means of connecting with a wider audience. Hotels can leverage these platforms to create engaging content that fosters guest interaction and builds brand loyalty. Regular posts, stories, and live streams keep followers informed and engaged while reinforcing the hotel’s brand identity.

Reputation management is another critical aspect of maintaining a strong brand image, which is at the crux of how to run a hotel business successfully. Hotels should actively seek guest feedback, both positive and negative, to understand their experience and make improvements where necessary. Addressing guest concerns promptly and professionally demonstrates the hotel’s commitment to providing a high-quality guest experience.

Hotel space with palm fronds

Crisis Management and Resilience Planning

The hotel industry has weathered numerous crises in the past, including the Global Financial Crisis (GFC), SARS, 9/11, and most recently, COVID-19. These crises can disrupt the industry on multiple levels, be they global in nature or localised to an individual hotel.

Local crises can include safety and security breaches, loss of key personnel to labour strikes, technology failures, or reputational crises due to negative media coverage.

When it comes to how to run a hotel business successfully in the face of such crises, it’s crucial for hotels to have a comprehensive Crisis Management Plan in place. This plan should include robust procedures that identify potential risks, establish a chain of command, define roles and responsibilities, and set up a communication protocol.

The industry has adapted and learned from each crisis it has faced. A key takeaway is that the industry must be prepared, have robust processes in place, and most importantly, be nimble when a crisis arises. Some owners believe that their obligations as a director have been transferred to hotel operators under the terms of the contract, however this is not true, owners and directors still have the normal directors’ liabilities.

To ensure business continuity in the face of such situations, hotels need to have contingency plans in place. These could involve having insurance coverage, maintaining a crisis management team, and regularly updating and testing emergency response plans. In essence, resilience and adaptability are key to navigating the ever-changing landscape of the hotel industry.

How To Run A Hotel Business Successfully

Managing a successful hotel business involves careful planning and management of various resources. By focusing on these critical success factors, hotels can drive performance, increase profitability, reduce costs, enhance guest experience, ensure business continuity, and build a strong brand reputation.

Remember that success in the hotel industry is not achieved overnight but is the result of consistent efforts over time. Stay focused on your goals, be adaptable to changes in the market environment, and strive for continuous improvement in all areas of your business.

For tailored assistance and guidance in running your hotel successfully, contact Axsia HTL. We are here to help you navigate the ever-evolving hospitality landscape and achieve your goals.

Gen Z guests in a hotel lobby

Is Gen Z Driving Hotel Trends and Opportunities?

As the hospitality industry evolves, staying ahead of the curve is crucial for sustainable success. Axsia HTL’s Director of Hotels, Daniella Tonetto, recently took the stage at the HICAP ANZ event to explore emerging trends and opportunities.

Daniella led an insightful panel discussion featuring luminaries from the field that delved into the intriguing topic of Gen Z travel trends and young people’s influence on the hotel industry.

This increasingly mobile and discerning demographic is reshaping the travel landscape. They seek immersive experiences that connect them with their destinations. Culture, art, wellness, and sustainability are paramount to this generation, making it essential for hotels to cater to their evolving preferences.

So, what exactly are the emerging trends dominating the Gen Z population, and how can hospitality leaders keep up to not only accommodate them but exceed their expectations? Let’s look at some key points and how we can all stay ‘on trend’ in the competitive hotel industry.

Gen Z Travel Preferences

Gen Z, born between 1997 and 2012, is already making a significant impact on the tourism industry as the newest generation of travellers. This tech-savvy generation, having grown up with technology from a young age, has unique preferences and behaviours that hoteliers must consider in order to cater to their needs and develop loyalty.

Understanding Gen Z’s travel preferences is crucial for hotels to stay relevant and thrive in the evolving travel landscape.

Embrace Technology

Gen Z, as digital natives, embraces technology throughout all stages of their travel journey. They’re smart and adaptable, relying on mobile devices and social media for travel inspiration, research, booking, and cancellations or modifications.

Hotels must provide a seamless digital experience, with mobile-friendly websites, easy online bookings, and personalised interactions through social media platforms. Think along the lines of:

  • Digital check-in and check-out
  • Premium online booking services
  • Online guest portals
  • Hotel apps
  • QR codes on-site for things like room service, contest entries, and hotel amenities information
  • Quality interactive websites
  • Active presence on social media

Safety and Security

According to the European Travel Commission (ETC), safety and security rank high on Gen Z’s list of priorities when choosing a travel destination.

Hotels can cater to this preference by emphasising their safety measures, implementing contactless check-ins, and showcasing their commitment to maintaining a secure environment.

Immersive Experiences

Gen Z travellers are not just looking for a vacation; they want immersive experiences that allow them to connect with local culture, gastronomy, and traditions.

Hotels can offer unique local experiences within their premises, such as hosting cultural events, collaborating with local artists, or providing local food and drink options.

If that’s not feasible, try promoting or partnering with local businesses through digital spaces. Cross-posting on social platforms and housing deals or initiatives on your hotel’s website can go a long way in swaying a potential Gen Z guest to book.

Sustainability and Transparency

Gen Z is a generation that cares deeply about sustainability, ethical practices, and authentic experiences. They seek brands that are transparent, truthful, and socially responsible.

Hotels can demonstrate their commitment to sustainable practices by implementing eco-friendly initiatives, promoting local engagement, and sharing their sustainability efforts.

Personalised and Authentic Content

Gen Z travellers heavily rely on peer reviews, travel review sites, official tourism websites, and social media for travel inspiration and itinerary planning.

Hotels should focus on creating engaging and authentic content that showcases their unique offerings, such as local partnerships, personalised experiences, and immersive activities.

Mobile-First Approach

Finally, and possibly most important to generate efficiencies that attract a younger traveller, prioritising your hotel’s mobile-friendliness is key. Gen Z has a strong preference for mobile booking and expects a seamless mobile experience from hotels[^1].

Hotels need to offer mobile-friendly websites with easy navigation, fast-loading pages, and booking options optimised for smartphone use. Implementing a reliable mobile booking system is crucial to capture and retain Gen Z customers.

HICAP ANZ panel with Daniella Tonetto

Credit: The Hotel Conversation

Staying on Hotel Trends

Staying on the pulse of these evolving trends is key to attracting and retaining guests, especially the tech-savvy, socially conscious Gen Z. However, Daniella states the path to success lies in balancing innovation with product durability and sustainability.

On discussion during the HICAP ANZ panel were several key methods that hotels can employ to stay on trend and remain competitive in the market. Here’s what Daniella and the speakers highlighted:

Balancing Innovation and Lifecycle

While innovation is essential, it must be grounded in a strategic approach that ensures a healthy and profitable lifecycle.

Cutting-edge technology, such as concierge robots and digital room keys, can boost efficiency and reduce environmental impact when adopted effectively.

However, gaining buy-in and understanding across the entire hotel team is essential to harness the full benefits of these advancements.

Tech’s Role in Hotel Efficiency

The hotel industry must recognise that technology isn’t merely a gimmick but a powerful tool that can optimise productivity and guest experience while alleviating labour shortages.

Hotel-wide awareness and comprehension of technology’s advantages for both guests and staff are crucial to success.

Alongside implementing the digital tools we spoke about above, such as digital (or contactless) check-in and online guest portals, think about investing in some high-quality Customer Experience technology (CET).

This kind of software provides hotels and management teams with a wealth of important data in a much more streamlined, automated system, saving time and enabling you to improve the guest experience based on customer preferences.

Sustainability in Hospitality

Sustainability is no longer an option; it’s a necessity, especially among Gen Z travellers. Sustainability should seamlessly integrate into the guest experience, going beyond superficial gestures.

This might be a good time to look at your property asset management and strategy. Is there room for improvement in the sustainability space? Think about on-site water tanks, solar panels, and eco-friendly in-room toiletries.

Meeting Modern Guest Expectations

To meet the expectations of contemporary guests, the industry must embrace a holistic approach that unites culture, technology, sustainability, and remarkable guest experiences.

Having a good customer experience strategy and management system in place also helps to boost loyalty and return bookings, a very fruitful opportunity when considering the many years of travel ahead for Gen Z.

Smartphone technology for hotels

Get the Hospitality Edge With Axsia HTL

The future of the hotel industry is a captivating blend of culture, technology, sustainability, and unforgettable guest experiences, and Axsia HTL stands at the forefront, guiding the industry toward this promising future.

To embark on your journey of embracing these trends, enhancing your property’s value, and ensuring a sustainable and innovative hotel experience, reach out to Axsia HTL. Let our expert team assist you with your hotel investment and asset management ventures, shaping the future of hospitality together.

Your success begins with a conversation—contact us today to get started.

Customer experience management team

How Customer Experience Management Can Enhance Property Asset Value

In the dynamic world of the hospitality industry, the brand of a hotel stands as a formidable asset, capable of attracting and retaining customers. This allure becomes particularly potent within the fiercely competitive landscape of Australia.

Yet, as robust as the brand may be, it does not, in and of itself, guarantee the triumph of a hotel. In this ever-evolving market, where guest preferences and expectations are continually evolving, it’s the hotel management team that holds the key to success.

In this article, we delve into the pivotal role played by hotel management in crafting an exceptional guest experience. We’ll explore how the confluence of brand strength and adept customer experience management can elevate a hotel’s market standing, asset value, and overall financial performance.

The Revenue Contribution of Brand Companies

According to our expert asset and customer experience managers here at Axsia HTL, the brand company can contribute an impressive 30% to 50% of the hotel’s revenue per available room (RevPAR) through its strong distribution systems and brand promise.

These twin pillars empower the brand to attract and engage a substantial portion of the clientele, ensuring that rooms are occupied and revenue streams flow consistently. It’s this very strength that often draws hotels into partnerships with renowned brand companies.

The rest of a hotel’s RevPAR depends on managing customer experience in a way that enhances guest satisfaction, loyalty, reputation, and demand through creating a “mini-brand” that resonates with its target market.

This “mini-brand” should mirror the aspirations, preferences, and expectations of the guests, acting as the bridge between brand promise and customer fulfilment. Here, every interaction, from the initial reservation to the final checkout, is a carefully orchestrated act, designed to leave an indelible impression. This is where a strong CEM strategy is essential when looking to enhance overall property asset value.

The Pitfalls of Cost-Cutting in Hotel Management

Unfortunately, many hotel managers resort to cost-cutting measures as a quick fix to maintain profitability, especially in the wake of the COVID-19 pandemic. This can have negative consequences for the quality of service, customer retention, and long-term value creation.

Instead, owners should actively engage with their hotel managers, posing critical questions about the strategy in place and how it aligns with the overarching brand vision and customer requirements. Hotel success is not just about numbers; it’s about creating a memorable and lasting experience for guests that keeps them coming back and recommending the establishment to others.

By taking a holistic approach and focusing on customer experience management, hotel owners can steer their properties towards sustainable success, even in challenging times.

Family arrives in a hotel room

Customer Experience Management (CEM) as a Solution

In the ever-evolving landscape of the hospitality industry, managing customer experience has emerged as a powerful solution to unleash the full potential of a hotel property. At Axsia HTL, we firmly believe that customer experience management (CEM) is the cornerstone upon which a hotel’s success is built.

CEM represents a comprehensive approach to crafting and optimising the interactions between customers and the hotel at every touchpoint of their journey, from the initial pre-arrival phase to the post-departure experience.

It’s more than just ensuring guests have a pleasant stay; it’s about orchestrating a symphony of experiences that resonate with guests on a personal level.

The essence of CEM lies in its dedication to understanding the guests’ unique identity, preferences, and desires. This in-depth comprehension is crucial in shaping the experiences that not only meet but exceed their expectations.

Every guest interaction, be it during the booking process, check-in, dining, or any other aspect of their stay, is seen as an opportunity to delight and create lasting memories.

Customer Experience Management Platforms

Pivotal tools in a hotel’s CEM arsenal are its customer experience management platforms, often referred to as customer experience technology (CET). There are plenty of tools available from the more basic CEM designs to advanced software for large chains.

The technology in these platforms empowers hotels to gather and analyse data from various sources to construct a detailed profile of their guests.

This profile, built upon demographics, behaviours, preferences, and feedback, serves as a blueprint for personalised experiences. From room preferences to dining choices and even recreational activities, a customer experience management platform allows hotels to tailor every aspect of a guest’s stay.

CET allows hotel management to better understand their guests’ behavioural psychology, allowing them to:

  • See important customer information
  • Track how customers interact with the hotel’s website and booking system
  • Navigate the hotel’s website
  • Automate better customer interactions with AI
  • Identify guest pain points
  • Gain valuable data from wider market pools

By integrating a preferred platform into their operations, hotels can ensure a seamless and consistent experience throughout a guest’s journey. This cohesiveness builds trust, enhances guest satisfaction, and ultimately fosters loyalty.

Benefits of Implementing CEM Principles

By applying CEM principles and practices, hotel managers can achieve several benefits, such as:

Increasing Customer Loyalty

Loyal customers are more likely to return, recommend, and spend more at a hotel. They also provide valuable feedback and insights that can help improve service quality and innovation.

Improving Online Reputation

Online reviews and ratings are influential factors for customers when choosing a hotel. Positive reviews can boost the hotel’s visibility, credibility, and attractiveness on online platforms and social media.

Generating More Demand

By creating a distinctive and consistent customer experience that matches the brand promise, hotel managers can differentiate themselves from competitors and attract more customers who are willing to pay a premium for their services.

Enhancing Profitability

By increasing customer loyalty, reputation, and demand, hotel managers can also increase their RevPAR and profit margins. Moreover, by investing in customer satisfaction through key areas like strategic property asset management, they can reduce customer acquisition costs, staff turnover, and operational inefficiencies. This, in the long run, is a much more viable option than cutting costs.

Strategic Approach to Effective CEM

A strategic approach to effective customer experience management (CEM) is the bedrock upon which hotels build enduring relationships with their guests and ensure long-term success in a highly competitive industry.

To successfully implement CEM, hotel managers must embrace a multifaceted strategy that is both proactive and deeply attuned to guest preferences. Here’s a closer look at the strategic approach that underpins effective CEM:

Conduct Comprehensive Customer Research

At the heart of CEM is a profound understanding of the guests. Hotel managers need to conduct extensive customer research to gain insights into their target audience. This research encompasses various dimensions, including demographics, preferences, behaviours, needs, and pain points.

Such in-depth knowledge provides a foundation for crafting experiences that truly resonate with guests. To gather this information, hotels can employ a variety of research methods:

  • Surveys: Surveys are a traditional yet highly effective means of collecting feedback and data from guests.

They can be administered before, during, or after the guest’s stay to gain insights into their expectations and experiences.

  • Focus groups: Focus groups bring together a select group of guests to explore their perspectives, delve into specific areas of interest, and brainstorm potential improvements.
  • Observation: Observing guest interactions and behaviours within the hotel provides a wealth of information. From their choice of amenities to their dining preferences, every action offers insights.
  • Online analytics and CET: Leveraging customer experience technology (CET), hotels can gather data from online interactions, booking histories, and website visits to create a more comprehensive view of their customers.

Advanced analytics tools provide real-time data that can be analysed to spot trends and patterns.

Segment and Target Customers

Building upon the insights garnered from customer research, hotel managers should focus on segmenting and targeting customers. Not all guests are the same, and recognising this diversity is key to delivering personalised experiences. The strategic approach involves:

  • Identifying profitable and loyal segments: Not all customers are created equal. Some are more profitable and loyal than others.

By identifying these segments, hotel managers can allocate resources more efficiently and create tailored experiences for their most valuable guests.

  • Defining value proposition and positioning: For each customer segment, hotels need to develop a unique value proposition and positioning strategy. This entails crafting a clear and compelling message that reflects what the hotel can offer to that specific segment.

Whether it’s a family-focused experience, a luxury getaway, or a business-oriented stay, the message should align with the needs and preferences of the targeted audience.

CEM management with hotel staff

Discover Premium Customer Experience Management with Axsia HTL

Elevating your hotel’s customer experience can transform it from a place to stay into a cherished destination where guests return time and time again. At Axsia HTL, we understand the pivotal role of customer experience management in nurturing guest loyalty, enhancing your online reputation, driving demand, and ultimately boosting profitability.

Our strategic approach, grounded in comprehensive customer research and thoughtful segmentation, ensures that every guest’s journey is distinctive and memorable. By offering personalised experiences that align with the diverse needs and preferences of your guests, you can set your hotel apart in today’s competitive landscape.

Contact us today to embark on a journey towards customer-centric excellence. Our CEM services empower your hotel to offer the exceptional experiences that modern travellers crave. It’s time to go beyond traditional hospitality and embark on a path that nurtures long-term success.

Resort pool and buildings

Property Asset Management: Key Steps for Optimising Your Investment Return in Hospitality

Hotel brands are a crucial element in any hotel investment strategy, playing a pivotal role in determining financial success. They offer consumer recognition, trust, and provide critical booking platforms and systems that significantly impact room revenue, often constituting up to 50% of total room revenue.

Investors can choose to acquire brands from recognised international or domestic chains or successful independent hotels, typically through franchise licence agreements or hotel management agreements with brand operators. However, it’s important to note that a brand’s primary focus is on short to medium-term room revenue delivery rather than formulating a strategic, long-term asset value growth plan.

The key to optimising return on investment lies in comprehensive property asset management. So, let’s look at how to optimise your investment return in hospitality with successful property asset management.

What is Property Asset Management and Why is it Important?

Property asset management, a dynamic process, is integral to the financial and reputational performance of a hotel property throughout its lifecycle. This method involves strategic property asset planning, implementation, and consistent monitoring of activities.

Professional property asset managers, like the team here at Axsia HTL, possess the expertise to set and execute these actions in alignment with the investor’s goals and market conditions.

Adding Value Through Property Asset Management

What does a property asset manager do? These figures are instrumental in adding value to a hotel investment in multiple ways:

Developing a Strategic Vision

Property asset managers analyse various facets, including the property’s strengths, weaknesses, opportunities, and threats. They assess the competitive landscape and customer segments, enabling them to define a clear and realistic vision for the property. Additionally, they outline objectives and strategies to achieve this vision.

Enhancing Operational Efficiency

Property asset managers oversee and evaluate the performance of the hotel operator to ensure they deliver expected service quality and customer satisfaction. They identify and implement operational improvements, encompassing cost reduction, revenue management, marketing and sales, human resources, and more.

Optimising Capital Expenditure

Property asset managers are responsible for planning and managing capital expenditure projects aimed at enhancing the property’s value. This may include renovations, expansions, upgrades, and other strategic initiatives. They also ensure that these projects are completed within the designated timeline, budget, and with minimal disruption to the property’s operations.

Maximising Asset Value

Property asset managers continuously monitor and adjust the asset value based on market trends and demand fluctuations. Furthermore, they provide advice on the best timing and terms for activities like refinancing, repositioning, or selling the property.

The Role of Hotel Brands in Investment Strategy

Hotel brands play a pivotal role in shaping the investment strategy of hotel properties. These brands are not mere names; they are powerful symbols of tradition, quality, consistency, and the promise of exceptional guest experiences.

They possess the ability to instill trust and recognition among consumers, making them a crucial element in a hotel’s investment journey. However, their contribution goes beyond the superficial aspects of logos and taglines.

Consumer Trust and Loyalty

When guests choose a hotel associated with a trusted brand, they bring a level of expectation based on previous experiences or the brand’s reputation. This trust is an essential factor in the decision-making process, often leading to higher occupancy rates and consistent patronage.

Hotel brands leverage their historical performance to build consumer loyalty, ensuring that guests return for future stays.

Revenue Generation

Hotel brands are not just a name on the building; they offer a comprehensive system that encompasses booking platforms, distribution channels, and marketing efforts. These systems are designed to drive room revenue, a significant portion of the total revenue for any hotel.

The seamless integration of these brand-provided systems and strategies ensures that the hotel can effectively fill its rooms, achieve competitive pricing, and maximise revenue potential.

Quality Assurance

For investors, the inclusion of a reputable hotel brand offers a level of quality assurance. Brands often have strict standards and quality control measures to maintain consistency across their properties.

Guests, therefore, know what to expect when choosing a brand-affiliated hotel, reducing the risk of unpleasant surprises.

Distribution Power

Hotel brands come equipped with well-established distribution networks, partnerships with online travel agencies, and international exposure.

This translates into increased visibility, both for direct bookings and through third-party platforms, ultimately resulting in higher room occupancy and revenue.

Operational Support

Hotel brands often provide operational support, including staff training, best practices, and access to reservation systems. This support enhances the efficiency of hotel operations and ensures that employees are well-versed in delivering a superior guest experience.

Collaboration is Key

While hotel brands offer numerous advantages, it’s important to recognise that their primary focus is typically on short to medium-term room revenue delivery. The broader strategic goals and long-term asset value growth plans fall beyond their immediate scope.

This is where property asset management comes into play, complementing the efforts of the brand and focusing on the holistic performance and value of the property over its lifecycle. The alignment of these two strategies, and the collaboration between parties, is instrumental in achieving optimal investment returns and positioning a hotel property for long-term success.

Hotel investors and property asset manager meeting

Investor Strategies for Property Asset Management

While investors with multiple hotel properties tend to employ in-house asset managers who recognise the value of property asset management for their investment returns, this may not be the case for those with smaller portfolios.

Some may not fully appreciate the benefits or may perceive property asset management as too costly, which is a common misconception that can potentially limit their returns.

Property asset management, however, is not exclusive to large portfolios and offers advantages for any hotel investor seeking to optimise their returns in the hospitality sector.

Various options for accessing property asset management services exist, including outsourcing to external consultants or partnering with specialised firms like Axsia HTL.

By embracing these services, hotel investors can augment their brand strategy with a comprehensive and strategic approach, ultimately enhancing property performance and value.

Unlocking the Potential: Property Asset Management Services

Now we know why asset management is so important in the complex world of hotel investments, let’s take a look at how we actually achieve it.

When performed correctly, property asset planning and management services emerge as the key to unlocking a hotel property’s true potential. At Axsia HTL, we specialise in providing tailored solutions that cater to the distinct needs of each property owner, which is exactly what good property asset management should look like.

A Partnership Built on Success

The foundation of our approach is the alignment of objectives with key stakeholders. By fostering a relationship-centric strategy, we consistently deliver market-leading returns. Our team’s profound understanding of operator brands, their value propositions, and the hurdles they face are pivotal in shaping our property asset management services.

Driving RevPAR Excellence

Revenue management, often defined by the balance between Average Daily Rate (ADR) and occupancy, plays a pivotal role in enhancing a hotel’s performance.

Our deep insights into this equilibrium allow us to craft strategies that result in robust Revenue per Available Room (RevPAR) figures, outperforming competitors and maximising profitability.

Our property asset management services encompass a comprehensive range of activities that can assist in your property ventures:

  • Develop a vision statement: To align stakeholders and set a clear and achievable direction for the property.
  • Review annual budgets and Capital Expenditure Planning: Ensuring that financial planning is not only realistic but optimised for asset growth and success.
  • Key staff recruiting, onboarding, and appraisals: Assisting in acquiring and managing the right talent to steer the property toward its goals.
  • Refinance and support asset valuations: Offering insights and guidance for timing and terms when it comes to refinancing or evaluating the property’s worth.
  • Operational optimisation: Enhancing efficiency and effectiveness in hotel operations, including areas like restaurants, retail, and amenities.
  • Sales and marketing: Crafting strategies that drive occupancy and revenue growth while maintaining the property’s unique appeal.
  • Project management: Ensuring that property improvement and expansion projects are executed on time, within budget, and with minimal disruption.
  • Contracts, deals, and negotiations: Expertly navigating the complex landscape of agreements to secure the best terms for the property.
  • Renovation and repositioning Strategy: Identifying opportunities for renovation and enhancement, aiming for long-term growth.
  • Grow revenue and enhance guest experience: Maximising revenue and guest satisfaction by going beyond room rates to include other services, such as F&B, spa, events, and more.

Achieving Consensus for Strategic Success

In the contemporary landscape, progressive asset managers play a crucial role in fostering consensus among investors, brands, and employees.

They possess an in-depth understanding of consumer demographics and their evolving requirements, focusing on engaging all stakeholders toward a common goal. Achieving consensus is pivotal, as no strategic plan can succeed without it.

Enlist a Property Asset Manager Today

Property asset management is an indispensable tool for optimising investment returns in the hospitality sector. It offers a holistic and strategic approach that compliments brand strategies, leading to improved property performance and value.

By embracing property asset management services, investors can gain a competitive edge and achieve their investment goals in the dynamic world of hospitality.

Contact us today to consult with our experienced Asset Managers, who can provide recommendations and a path forward to increase the value of your asset.


The Future of Revenue Management in the Hospitality Industry

The landscape of revenue management in the hospitality industry is undergoing a seismic shift. In an age defined by technology and changing customer preferences, the tried-and-true practices of revenue management have evolved, creating both challenges and opportunities for businesses.

With the emergence of innovative tech, shifts in customer expectations, and ever-changing market conditions, revenue management professionals are at the forefront of a dynamic industry.

In this article, we’ll explore some of the trends and developments that are shaping the future of revenue management in the hospitality industry, and how revenue managers can leverage them to optimise their revenue performance.

Definition of Revenue Management in Hospitality

Revenue management in the hospitality industry is the art of applying data-driven strategies to maximise revenue and profitability.

It encompasses everything from predicting demand, determining the best prices, managing inventory, and distributing products and services through various channels. It has played a pivotal role in the success and competitiveness of many hotels and resorts for decades.

At Axsia HTL, we have extensive experience in designing and optimising such strategies. One of our best examples of revenue management and asset management is our recent collaborative approach for a 5-star resort, which showcases how using data and trends can elevate success even during and after the turbulence of COVID-19.

Speaking of the pandemic, it’s clear that the hospitality industry has changed drastically over the last several years. Even before this abrupt change, however, we were seeing things beginning to shift in the hotel industry.

The Changing Landscape

It’s no secret that good revenue management strategies have been key factors in the success and competitiveness of many hotels, resorts, and other hospitality businesses in the past decades.

However, the hospitality industry is undergoing rapid and profound changes due to the emergence and evolution of new technologies, customer preferences, market conditions, and business models. Let’s take a closer look at the changing landscape of hotel revenue management strategies.

Technological Advancements

Advancements in technology have revolutionised revenue management practices, enabling revenue managers to collect, process, analyse, and act on large amounts of data from various sources. Think valuable and data-rich streams like customer behaviour, market trends, competitor actions, social media, online reviews, weather, events, you name it.

Technology also allows for the automation of many tasks that were previously manual and time-consuming, such as pricing, inventory management, distribution and reporting. Tech programs that streamline these administrative processes have been game-changers in the industry.

Despite these positive outcomes, we’re also seeing technology increase the complexity and dynamism of the market environment. This presents an interesting new landscape that poses some challenges, particularly in customer preferences.

Shift in Customer Preferences

Thanks to technological shifts and subsequent market changes, customers have more choices, information, and power than ever before.

They can easily compare prices, products, and services across different platforms and channels, such as online travel agencies (OTAs), metasearch engines, direct booking websites, and mobile apps. Customers can also switch between different providers and channels at any time, depending on their preferences.

It’s therefore crucial that revenue managers adopt a customer-centric approach to revenue management strategies in the hospitality industry. Managers can effectively use technology to:

  • Understand the needs, preferences, expectations, and behaviours of their customers across different segments, markets, channels, and touchpoints.
  • Segment their customers based on various criteria, such as demographics, psychographics, booking patterns, and loyalty status.
  • Monitor and measure customer satisfaction and loyalty across different channels and touchpoints.
  • Communicate and engage with their customers before, during, and after their stay.

Evolving Market Conditions

Alongside these fast-moving tech advancements, the hospitality industry is constantly evolving, with unforeseen disruptions and changing customer preferences driving shifts in market conditions.

To remain competitive, businesses must adapt and innovate. Revenue managers are essential in helping companies navigate these dynamic changes, such as:

  • Global events and uncertainties like the COVID-19 pandemic: Revenue managers play a crucial role in adjusting pricing models, assessing trends, and handling uncertainties, ensuring businesses can thrive during such disruptions.
  • Intensifying competition: With increased competition, businesses need to innovate continually. Revenue managers offer valuable insights into pricing, distribution, and market trends, enabling businesses to identify growth opportunities and enhance revenue performance.

F&B offerings at a hotelEmbracing Innovation

With so much rapid change in the hospitality industry at the moment, it can be easy to feel overwhelmed. Our core piece of advice when devising new revenue management strategies is to embrace innovation.

Businesses who dare to push the envelope with bold ideas and new technologies will not only stay afloat in times of change, but will rise above the competition to new and exciting heights.

The Need for Creativity and Flexibility

In the ever-changing world of revenue management, adaptability and innovation are non-negotiable. It’s no longer enough to rely solely on traditional methodologies.

Creative solutions and flexible strategies are key to thriving in this dynamic landscape. Revenue managers must go beyond the numbers and embrace a holistic perspective. They need to craft inventive pricing structures, leverage advanced data analytics, and embrace innovative technology to stay ahead.

These imaginative approaches help set new industry standards and create a clear path towards enhanced profitability.

The Role of Revenue Managers

In the current hospitality landscape, revenue managers have evolved into customer-centric strategists. Their role extends far beyond mere number-crunching.

By understanding and segmenting customers based on a myriad of criteria, revenue managers can tailor experiences to meet specific needs and preferences. They employ cutting-edge technology to track satisfaction and foster loyalty throughout the customer journey.

These managers act as conduits between data and guest expectations, ensuring that each visitor’s experience aligns seamlessly with the brand’s vision and market positioning. Their customer-focused approach leads to not only increased revenue but also enriched brand loyalty, setting the stage for continued success in a competitive market.

Trends Shaping the Future

When looking ahead, we’re seeing several clear trends emerging in effective hotel revenue management strategies.

While it’s always important to tailor your own strategies to the needs and circumstances of your business, we recommend looking out for these areas and implementing them as core ways to expand and improve your planning.

Personalisation and Customisation

Personalisation and customisation can increase the revenue and profitability of a hospitality business in a few key ways. It can:

  • Enhance customer satisfaction and loyalty, as customers feel more valued and appreciated by the hospitality provider.
  • Increase customer willingness to pay, as customers perceive more value and differentiation from the hospitality product or service.
  • Create more cross-selling and up-selling opportunities, as customers are more likely to purchase additional products or services that match their needs or preferences.

So, what are some examples of revenue management personalisation strategies?

  • Revenue managers who effectively use technology to collect and analyse data about their customers across different segments, markets, channels, and touchpoints.
  • Customer profiles and personas created from this data that capture the needs, preferences, expectations, and behaviours of the target demographics.
  • Customised products or services offered to customers across different channels and platforms.
  • Revenue managers who monitor the impact of personalisation and customisation on customer satisfaction, loyalty, revenue, and profitability.

Benefits of Integrated Systems

Integrating different revenue management systems is vital to overcoming inefficiencies and errors in the process, such as incomplete data, analyses based on faulty models, inaccurate forecasting due to insufficient data, or inconsistent pricing across different platforms.

To overcome these issues, integrated systems are starting to be operated by different departments or functions within many hospitality businesses, such as sales, marketing, operations, and finance.

We’re also seeing them being used by different external partners or providers, such as OTAs, metasearch engines, and revenue management software vendors.

An integrated system enables revenue managers to:

  • Access and consolidate data from various sources in a single platform.
  • Apply consistent and comprehensive analysis and forecasting across multiple services.
  • Implement optimal and dynamic pricing strategies.
  • Manage inventory effectively and efficiently.
  • Distribute products or services optimally and strategically.
  • Generate timely and clear reports on revenue performance and outcomes.

Expanding Beyond Room Rates

The final trend that’s making waves is expanding beyond room rates. While room rates remain the main source of revenue for most hotels, it’s important to remember that they’re not the only source – far from it.

Customers are more and more seeking a holistic experience from their accommodations that extends beyond their rooms. Expanding revenue management to include other products and services, such as F&B, spa, events, and parking, increases total revenue per available room (RevPAR). This KPI plays a major role in enhancing profitability and customer satisfaction.

Team meeting about hotel revenue management strategiesAdapt to the Future of Revenue Management With Axsia HTL

As revenue management transforms, revenue managers must embrace innovation, flexibility, and customer-centric practices to optimise revenue performance and drive success in the evolving hospitality industry.

By leveraging trends and developments, revenue managers can also optimise their revenue performance and create more value for their customers and stakeholders.

If you’d like assistance with creating your revenue management strategies, the team at Axsia HTL is here for you. Our extensive experience in hotel asset management and advisory services, and with a keen eye on the market and latest trends, we know what makes things tick when it comes to hotel management.

Get in touch with us to talk about your revenue management strategy today.

Men discussing hotel asset management

Unlocking Hotel Investment Success: Axsia HTL’s Expertise in Asset Management

Hotel investment requires a unique set of skills and insights, given its dynamic nature and complex operations. At Axsia HTL, we bring over 150 years of collective experience to the table, helping investors bridge the knowledge gap and maximise their return on investment.

Our Managing Director, David Simpson, offers valuable insights into the asset management landscape, outlining how our expertise sets us apart in this competitive industry. Let’s take a look at how we can help you unlock your own hotel investment success with our tried and true asset management strategies.

Key Benefits of Asset Management

Hotel asset management plays a pivotal role in driving business results for property owners. While operators are essential, owners must also actively engage in setting and monitoring the business strategy to ensure optimal performance.

This alignment with the owner’s vision and investment objectives fills a crucial void, leading to better returns and more successful outcomes.

Several key benefits of approaching asset management in this way include:

  • Strategic Alignment: Asset management aligns owner and operator strategies, ensuring every decision advances the owner’s vision and investment goals.
  • Optimal Performance: It optimises operations, enhancing service quality, cost control, and overall performance.
  • Risk Mitigation: Asset management mitigates uncertainty by proactively addressing challenges, and maintaining the course toward success.
  • Enhanced Returns: The process maximises financial performance, resulting in higher returns for owners and investors.
  • Operational Efficiency: It aligns operations with the owner’s vision, enhancing efficiency and profitability.
  • Customised Strategies: Tailored approaches, from marketing to pricing, ensure the property reaches its unique potential.

We might be biased, but the truth remains: asset management is more than a tool for owners; it’s the driving force behind business success for hotel development. It forges an unbreakable connection between ownership vision and operational execution, harmonising all efforts to deliver enhanced returns, optimised performance, and a shield against uncertainty.

In an ever-evolving industry, asset management is the compass that guides the hotel towards its owner’s vision of prosperity.

Top Trends in Hotel Development

The resurgence of travel, both for business and leisure, has sparked a demand for new, personalised, and experiential offerings. This trend has given rise to innovative lifestyle brands, such as Ace Hotels, 1Hotel, Treehouse, The Standard, and Ennismore.

Additionally, there is a growing interest in franchising and white-label management, giving investors greater control over their business ventures.

Engaging with Axsia HTL

When clients approach us for a hotel project, we emphasise the importance of careful due diligence to determine project viability. We focus on aligning the developer’s vision with realism and optimisation, ensuring a bankable and market-valued project.

For mixed-use developments, we explore how the hotel component can enhance the broader project for maximum investment benefits.

David Simpson, Daniella Tonetto, and David Fraser from Axsia HTL

Meet the Axsia HTL Team

Our team comprises seasoned experts who have worked with international hotel chains across the Asia Pacific. They bring a wealth of experience in various facets of hotel operations. At Axsia, we adopt a multidisciplinary approach, providing invaluable insights to property teams and ensuring a strategic approach across all aspects of the business.

Axsia HTL was founded back in 2019 by a dedicated team of professionals, including Ian Knight (Executive Chairman), Bill Edwards (Executive Director), and David Simpson (Managing Director). We later welcomed David Fraser (Executive Director) as a valued shareholder.

At the heart of our team, Bill and David excel in operations and work closely with our asset management portfolio to ensure optimal performance across all our assets. Together, they bring a wealth of expertise to our projects, which encompass new hotel development, feasibility studies, market research, and operator selection, all culminating in comprehensive asset management strategies.

Our team has recently expanded to include several exceptional individuals who further enhance our capabilities:

  • Daniella Tonetto, an expert in sales and marketing, specialises in driving revenue optimisation.
  • Robert Scullin offers valuable insights and consultation across all aspects of our business.
  • Nicole Grainger serves as our Research Analyst, ensuring we remain up-to-date with the latest market trends and information for our projects.

Additionally, we collaborate with a select group of specialist consultants, covering areas such as regional tourism, technical services reviews, and non-HTL property matters, to offer a comprehensive and diverse range of services.

What Sets Axsia Apart

What sets Axsia HTL apart from competitors is our focus on revenue growth, backed by a strategic approach, to achieve above and beyond client expectations in the asset management and hotel development sector.

We take a comprehensive view of the business, emphasising vision, and strategy to achieve better returns. While we of course look at the hard numbers, everything we do at Axsia is built on the solid and evidence-based foundations of clear, effective, and well-researched strategies.

Our team’s diverse background, with experience in big brand international chains, also allows us to offer a unique perspective on asset management that we feel isn’t being tapped into by many other companies on the market.

Exciting Hotel Projects in Our Portfolio

In our portfolio, we have several exciting hotel projects that showcase our expertise:

  • 1Hotel Melbourne: This upcoming hotel in Australia is the first of its kind by SH Group, set to launch in late 2024. Axsia HTL assisted in sourcing this cutting-edge brand, adding to Melbourne’s luxury hotel landscape.
  • The Tasman Hobart, A Luxury Collection Hotel: This new build Luxury Collection Hotel in Australia demonstrates our ability to develop concepts and source brands suitable for specific markets, winning numerous awards since its opening.
  • Ace Hotel, Sydney: As the first Ace hotel in Australia, this development successfully integrates an upper upscale brand into a smaller footprint, offering thriving F&B spaces and regular community engagement events.
  • Holiday Inn and Indigo Bourke Street: Currently under construction and expected to be completed in early 2026, this dual-branded property in a prime location takes advantage of shared back-of-house operations for efficiency.
  • Sheraton Grand Mirage Resort, Port Douglas: A long-standing asset management project in our portfolio, we’ve worked closely with the owner and hotel management team to renovate and reposition the property, resulting in numerous awards and enhanced investor returns. Our strategic philosophy has optimised the owner’s value and nurtured the development of a top-tier hotel executive committee.

Work With Axsia HTL

Axsia HTL’s expertise in hotel asset management and development, coupled with our team’s vast experience, allows us to bridge the knowledge gap for investors and property owners. Our focus on revenue growth, aligned with a strategic approach, sets us apart in this competitive industry.

Join us in unlocking the success of your hotel investment ventures today!

5 star hotel restaurant

Axsia HTL’s Collaborative Approach for Market Improvement

In this compelling case study, we showcase how a collaborative approach involving owners, hotel management companies (HMCs), and dedicated employees, guided by strategic asset management, can yield remarkable financial benefits and propel market positioning to new heights.

The success story we present demonstrates that a united effort can translate into financial gains for owners, increased brand recognition and fees for HMCs, and elevated employee satisfaction leading to enhanced guest engagement, ultimately resulting in improved market positioning and substantial financial rewards for all stakeholders involved.

Let’s take a look at how our team at Axsia HTL collaborated with these key players in a 5-star resort to generate an impressive 70% capital value growth, estimated at over $30 million. To kick things off, here’s a quick snapshot of the case study and its details in question:

Scenario Property Type Year 1 RGI Year 6 RGI
Asset Management engagement

5 years

5-star Luxury Resort 125 195

Challenges and Opportunities

This engaging case unfolds over a five-year asset management engagement at a luxurious 5-star resort. In the initial year, the Revenue Generation Index (RGI) stood at 125. Fast forward to year six, and the RGI had surged to 195. However, this journey was not without its share of challenges, including the disruptive impact of COVID-19 during years three and four.

Revisiting Vision and Positioning

The story begins in 2017 when the hotel had recently completed a comprehensive refurbishment of rooms, public spaces, and dining venues. Managed under a major brand, it was celebrated as a successful turnaround post-refurbishment, boasting an RGI of 125, signifying a 25% premium over the industry standard benchmark of 100.

While this was considered a significant achievement, the potential for even greater performance became apparent through a detailed competitor analysis.

The All-Inclusive Plan

Compared to its competitors, the hotel had the potential to trade at a minimum premium of 40%, if not 50%, above the natural RGI benchmark of 100. Achieving this premium required revisiting the hotel’s vision, positioning, and target markets, and aligning service offerings with the refurbished product. An overhaul was needed to attract a premium customer base that matched the hotel’s enhanced offerings.

To execute this ambitious vision, a comprehensive and all-inclusive plan was developed. The successful execution of this strategy necessitated a collaborative approach between the owners, HMC, and the managerial staff. Each stakeholder had a vital role to play:

  • Owners: Provide capital and accept short-term operating expense adjustments.
  • HMC: Recognise the need for personnel changes and corporate support enhancements.
  • Management Team: Emphasise service quality, enhance guest engagement, maintain luxury operational standards, and deploy strategic marketing efforts to connect with the refreshed target clientele.

Pre-COVID-19 Success

The plan was set into motion before the onset of COVID-19 and began yielding results in 2019. The hotel achieved a remarkable 90% market share premium (RGI 1.90) and witnessed EBITDA growth of 26%. This growth was primarily driven by a 20% increase in Revenue per Available Room (RevPAR) via room rate optimisation.

Despite beginning our plan before the challenges posed during COVID and the subsequent major shifts to the hospitality industry in a recovering post-COVID landscape, we continued to see successes drive us through this period. This is a testament to the positive effects of the core collaborative approach initially adopted.

5 star hotel restaurant

2023 Achievements

As we step into 2023, the hotel has not only sustained its success but has exceeded expectations. It now commands a market share premium of 95% (RGI 1.95).

The shift away from major occupancy gains and instead into a strategic focus on average room rates played a pivotal role. While occupancy saw a modest increase, the elevated guest demographics resulted in significant room rate growth.

This exceptional performance has led to a 70% improvement in EBITDA and an estimated capital value growth of over $30 million.

The collaborative approach necessitated an additional $3 million in capital expenditure from the owners, increased dedication from the HMC, and meticulous planning from the management team. However, the value gained far surpasses the collective investment, underlining the power of collaboration and strategic asset management.

Investment and Returns

In summary, this case study underscores the remarkable outcomes that can be achieved through collaboration and strategic asset management. Owners, HMCs, and management teams working in harmony can unlock the potential of a property, drive financial growth, and elevate market positioning.

The returns on this collaborative investment far exceed the initial capital outlay, demonstrating the immense value of embracing a united vision and approach.

Achieving Success in a Collaborative Approach

This case study stands as proof of the efficiency of a collaborative approach led by strategic asset management. It highlights that even in the face of challenges, such as the COVID-19 pandemic, the right strategy and commitment from all stakeholders can lead to exceptional financial benefits and improved market positioning.

As we navigate the ever-evolving landscape of the hospitality industry, this success story exemplifies the power of unity and strategic planning in achieving remarkable results.

Interested in exploring some of our other success stories? Check out our portfolio of works across advisory, asset management, hotel acquisition, hotel disposal, and project development sectors.

hotel building exterior

Redefining Hotel Asset Management in the Post-COVID Era: Recovery and Value Maximisation

The COVID-19 pandemic has been a devastating blow to the hotel industry, causing unprecedented declines in travel demand, occupancy, revenue, and profitability. Hotel owners are facing significant challenges and uncertainties as they try to survive the crisis and prepare for the recovery.

One of the most important decisions that hotel owners can make is to engage a professional and proactive hotel asset manager who can help them navigate the recovery process and maximise the value of their hotel assets.

In this guide, we explore the future of asset management in the new and often challenging landscape of the post-COVID hospitality industry. From the crucial role of asset managers to the expanding scope of asset management itself, we’ll investigate fresh ways to generate success with modern hotel asset management.

The Challenging Landscape for Hotel Owners

The COVID-19 pandemic has left an indelible mark on the hospitality industry, reshaping the landscape in profound ways. Hotel owners, in particular, have faced an unprecedented set of challenges as they navigate through the post-pandemic era.

Understanding these challenges is the first step in redefining hotel asset management to ensure long-term success in the new reality.

Demand Uncertainty

The pandemic introduced an unparalleled level of uncertainty into the demand dynamics of the hotel industry. Travel restrictions, lockdowns, and changing consumer preferences have made it exceedingly difficult to predict occupancy rates and revenue streams. Hotel owners find themselves grappling with the challenge of optimising their assets in an environment where demand can fluctuate dramatically from one month to the next.

Evolving Guest Expectations

The pandemic has also fundamentally altered guest expectations, which is now a key component to the future of asset management. Health and safety concerns now top the list of priorities for travellers.

Hotel owners must adapt by implementing rigorous cleanliness protocols, contactless services, and health-conscious amenities. Meeting these evolving expectations requires not only operational changes but also strategic investments in technology and infrastructure.

Revenue Volatility

With occupancy rates fluctuating, revenue management has become an intricate dance. Hotel owners need to employ sophisticated pricing strategies to maximise revenue during peak periods while remaining competitive during lulls in demand.

This calls for real-time data analytics and revenue management tools that can adapt to rapidly changing market conditions.

Labour and Operational Challenges

The pandemic disrupted labour markets and staffing dynamics. Hotel owners are grappling with labour shortages and increased costs as they strive to maintain the quality of service that guests expect. Balancing operational efficiency with labour costs has become a delicate task in the post-COVID era.

Debt and Financial Resilience

Many hotel owners are contending with debt incurred during the pandemic to weather the storm. Part of the future of asset management is ensuring financial resilience and servicing this debt. Navigating refinancing and restructuring options while optimising asset performance is a complex puzzle that hotel owners must solve.

Sustainable Practices

Sustainability has gained even greater prominence in the wake of the pandemic. Hotel owners are under increasing pressure to adopt eco-friendly practices and demonstrate a commitment to environmental and social responsibility. Achieving sustainability goals while managing costs presents an ongoing challenge.

hotel asset manager speaking to staff member

The Crucial Role of a Hotel Asset Manager

One of the most important decisions that hotel owners can make is to engage a professional and proactive hotel asset manager who can help them navigate the recovery process and maximise the value of their hotel asset.

A hotel asset manager is a specialist who works on behalf of the owner to oversee and optimise the financial and operational performance of the hotel. A hotel asset manager typically performs tasks such as:

  • Monitoring and analysing the hotel’s financial results and key performance indicators.
  • Benchmarking and analysing the hotel’s performance against its competitors and the market.
  • Inspecting and assessing the condition and maintenance of the physical asset.
  • Assisting with the preparation and review of annual budgets and forecasts.
  • Liaising and negotiating with the hotel operator on various issues and opportunities.
  • Providing strategic bespoke advice and recommendations to the owner on how to improve the hotel’s performance and value.

However, in the post-COVID era, these tasks are not enough to ensure the recovery and sustainability of the hotel. The future of asset management means that a hotel asset manager needs to deliver more value for the owner by taking a holistic and long-term view of the hotel’s life cycle.

This involves understanding when the hotel reaches its peak performance and value, and when it is time for the owner to exit the hotel and reinvest in another opportunity.

Expanding the Scope of Hotel Asset Management in the Post-COVID Era

The seismic shifts brought about by the COVID-19 pandemic have prompted hotel owners to reevaluate their approach to asset management. In the post-COVID era, the traditional scope of hotel asset management must expand to encompass a broader range of considerations and strategies that align with the new realities of the industry and the future of asset management.

Hotel asset managers can achieve this through the following approaches:

  • Data-Driven Decision-Making: Utilise real-time analytics to inform pricing, marketing, and operations.
  • Health and Safety Protocols: Implement stringent cleanliness and safety standards.
  • Technology Integration: Adopt guest-friendly tech and property management systems.
  • Flexibility in Business Models: Be ready to adapt, repurpose spaces, and explore new revenue streams.
  • Sustainability Initiatives: Reduce operational costs and appeal to eco-conscious travellers.
  • Strategic Partnerships: Collaborate for enhanced offerings and cost-efficiency.
  • Marketing and Branding: Promote safety measures, cleanliness, and flexibility to attract guests.

Expanding the asset management scope means embracing innovation and agility while addressing evolving traveller needs. Incorporating these considerations positions hotel owners for success in the new hospitality landscape. Subsequent sections will delve into specific strategies and best practices.

Axsia HTL: A New Approach to Asset Management

Axsia HTL is a leading hotel asset management company that offers a new approach to asset management that goes beyond traditional tasks. Axsia HTL believes that the key to recovery lies in creating a shared vision and alignment among the four key stakeholders of the hotel: the owner, the operator or brand, the customer, and the employee. Axsia calls this Stakeholder CalibrationTM, which is achieved through:

  • Developing a clear and compelling strategic vision for the hotel that defines its product positioning, target market segments, competitive advantages, and financial goals.
  • Communicating and implementing the strategic vision across all stakeholders, ensuring that everyone understands their roles and responsibilities, and how they contribute to achieving the vision.
  • Monitoring and measuring the progress and outcomes of the strategic vision, using data-driven tools and feedback mechanisms, and making adjustments as needed.
  • Celebrating and rewarding the successes and achievements of the strategic vision, creating a culture of collaboration, innovation, and excellence.

These four components make up the future of asset management, and will go a long way in ensuring you effectively and successfully navigate the new waters of the hotel industry in a post-COVID world.

Hotel staff and asset manager meeting in a hotel lobby

How Axsia HTL Helps Hotel Owners Recover from COVID-19

Our innovative approach to asset management is designed to provide hotel owners with a comprehensive recovery strategy to navigate the challenges posed by the COVID-19 pandemic. Here’s how the expert team at Axsia HTL assists hotel owners in their post-pandemic recovery journey:

1. Revenue Restoration

At Axsia HTL, we focus on reviving revenue generation by developing and executing effective marketing and sales strategies. These strategies are tailored to attract and retain customers, ultimately leading to increased occupancy rates and higher average daily rates.

Through meticulous market analysis and targeted campaigns, we help hotels regain their competitive edge and grow their market share in a rapidly evolving landscape.

2. Cost Efficiency

Efficiency is a key driver of post-COVID recovery, and we recognise the importance of improving cost efficiency. By conducting thorough operational assessments, our team identifies areas for improvement, leading to reduced expenses that aren’t considered long-term investments.

This includes streamlining operations, enhancing productivity, and maintaining a commitment to service quality, all of which contribute to cost savings and financial sustainability.

3. Asset Appreciation

We emphasise the significance of enhancing asset appreciation through strategic investments. By identifying opportunities for capital improvements that enhance the physical condition, functionality, and overall appeal of the hotel, we help owners unlock the full potential of their properties.

These investments not only improve guest satisfaction but also contribute to the long-term value and marketability of the hotel asset.

4. Financial Strategy

In a volatile market, explaining the importance of maintaining and growing market share to financiers is crucial. At Axsia HTL, we collaborate closely with hotel owners to develop compelling financial strategies that align with their recovery goals.

These strategies not only demonstrate the potential for financial resilience but also provide a clear roadmap for attracting the necessary investment and financing to support the hotel’s recovery and future growth.

In essence, our multifaceted approach to the future of asset management is a catalyst for hotel owners seeking to rebound from the impacts of COVID-19.

By restoring revenue, optimising costs, enhancing assets, and formulating persuasive financial strategies, our experienced team at Axsia HTL equips hotel owners with the tools and insights needed to thrive in a post-pandemic hospitality landscape.

Rethinking Asset Management for a Successful Hotel Recovery

In the ever-evolving landscape of post-COVID hotel management, the need for a fresh perspective on asset management has never been greater.

Hotel owners must collaborate with a seasoned partner who can craft a visionary strategy, fostering alignment among stakeholders, optimising performance, and driving maximum value through tailored guidance.

Axsia HTL stands as your trusted ally, offering a transformative approach to asset management. Our expertise and dedication are your keys to navigating the challenges and seizing the opportunities that lie ahead. It’s time to reimagine your hotel’s potential and secure its success in the post-pandemic era.

Ready to embark on this transformative journey to the future of asset management with Axsia HTL? Contact us today and discover the path to a resilient, thriving future for your hotel. Together, we’ll redefine the standards of hotel asset management in this new era.

You can check out our history of success with hotel asset management in our online portfolio, which highlights major players in the Australian hotel industry and how we assisted with their asset needs.

suburban landscape by the seaside

Suburban Hotel Development: Factors and Considerations

When we think of hotel development, many of us likely think of shiny high-rise establishments standing tall in CBDs and city precincts. However, suburban hotel development is quickly growing in popularity all over Australia with a rise in suburban demand, creating more exciting opportunities in the hospitality space.

In this article, we will discuss some of the key factors and considerations that are involved in suburban hotel development, including benefits and risks. We’ll use Victoria as an example, which has seen a significant increase in suburban hotel development in recent years and can act as a good use case for future endeavours to be guided by.

Suburban Hotel Development: Opportunities and Advantages

Suburban hotel development holds several compelling advantages, including cost efficiency driven by lower land and construction expenses. These areas provide a more budget-friendly option without sacrificing quality, ultimately leading to better returns on investment.

Additionally, suburban markets typically offer reduced competition compared to urban counterparts, resulting in higher occupancy rates and more stable revenue streams for new developments.

Another significant benefit lies in the access to untapped or emerging markets. Suburban growth attracts diverse demographics, including business travellers, families, and tourists seeking a quieter atmosphere.

These evolving markets allow hotels to cater to unique preferences, fostering guest loyalty and positive word-of-mouth marketing. In essence, suburban hotel development presents a promising avenue for cost-effective ventures and the opportunity to thrive in less competitive, emerging markets.

Recently, Victoria has been at the forefront of suburban hotel development with successful projects such as Sage Ringwood, M-City, Mercure Doncaster, and the recently announced Standard Hotel in Fitzroy. These projects reflect the state government’s policy to create activity centre zones in suburban locations, to alleviate the pressure on traffic flow in and out of the CBD. They also reflect the emergence of commercial office precincts, retail centres, education institutions, health facilities, and entertainment venues in suburban locations.

Challenges and Risks in Suburban Hotel Development

However, suburban hotel development also comes with its own challenges and risks. Not every suburban location is suitable or feasible for hotel development. Developers and investors need to carefully analyse and evaluate the potential of each location, based on the underlying fundamentals of demand and supply.

They also need to tailor their product and service offering to the specific needs and preferences of their target customers. They need to create a unique and distinctive value proposition that differentiates their hotel from other alternatives.

Understanding Demand Drivers

The first step in suburban hotel development is to understand the demand drivers for paid hotel accommodation in a particular location. Demand drivers are the factors that influence the volume and nature of demand for hotel rooms, such as business travel, leisure travel, events, or other purposes. Demand drivers can vary depending on the location, season, day of week, or time of day.

Some of the most common demand drivers for suburban hotel accommodation include present or planned developments, such as:

  • Infrastructure Investment: Suburban areas experiencing significant infrastructure development can create a need for hotel accommodations, catering to contractors, consultants, workers, or project-related visitors. Infrastructure projects encompass road construction, railway expansion, airport upgrades, port developments, utility enhancements, and public facility construction.
  • Commercial Offices: Office complexes and precincts play a pivotal role in driving demand for hotel accommodations, primarily among corporate travellers conducting business or attending meetings within these areas. Examples of such office settings encompass business parks, industrial zones, and innovation hubs.
  • Education: Educational institutions serve as a source of demand for hotel accommodations, serving students, faculty, and visitors associated with these establishments. These institutions may include universities, schools, colleges, and training centres.
  • Healthcare: The presence of healthcare facilities can generate a need for nearby hotel accommodations, accommodating patients, healthcare staff, and facility visitors. Healthcare settings include hospitals, clinics, medical centres, and aged care facilities.
  • Retail: Retail hubs draw in shoppers, staff, and visitors, fostering the demand for hotel accommodations in close proximity to these bustling centres. Examples encompass shopping malls, outlets, and various markets.
  • Entertainment & Sports: Entertainment venues and sporting attractions create a demand for hotel accommodations, attracting attendees, staff, and visitors to these venues. Notable examples include stadiums, arenas, theatres, cinemas, and casinos.

Market Research and Analysis for Suburban Hotel Development

To identify and quantify the demand drivers for a suburban hotel location, developers and investors need to conduct thorough market research and analysis. This typically involves collecting and analysing data on the current and projected supply and demand of hotel accommodations in the location and its surrounding areas.

Developers and investors also need to assess the competitive environment and the performance of existing or proposed hotels in the location and immediate surroundings. It’s important to identify the gaps and opportunities in the market and estimate the potential occupancy, ADR, RevPAR, GOP, and NOI of their hotel project.

This is a pivotal step in suburban hotel development and can often mean the difference between failure and success. Simply put, if the research shows that there’s not enough demand in a particular area, there’s little point in trying to generate interest there. This is often not obvious until after thorough market research and analysis have been conducted, so we highly recommend taking time and a little extra effort with this step.

Determining the Product and Service Offering

The second step in suburban hotel development is to determine the product and service offering that will best suit the demand drivers and target customers of a particular location. The product and service offering refers to the physical and intangible aspects of the hotel that create value for customers, such as the size, class, design, amenities, facilities, services, brand, or operator of the hotel.

Some of the common product and service offerings for suburban hotel accommodation are:

  • Size: This focuses on the number of rooms or keys that the hotel has. The size of the hotel should match the demand drivers and target customers of the location. For example, a suburban location with strong corporate demand may require a larger hotel than a suburban location with mainly leisure demand.
  • Class: This includes both the hotel product and service. The class of the hotel should also align with the expectations and preferences of the target customers. A suburban location with affluent customers may require a higher-class hotel than a suburban location with budget-conscious customers, for instance.
  • Design: The hotel’s style and appearance, both exterior and interior, are part of its offerings. The design should reflect the identity and character of the location and its community; a suburban location with a historic or cultural heritage could be infused with a more traditional or culturally specific design than a suburban location with a modern or trendy vibe.
  • Amenities: Think room types, bedding, furniture, appliances, bathroom, internet, TV, minibar, safe, etc. The amenities of the hotel must meet the needs and desires of the target customers. For example, a suburban location with family or leisure customers may require more spacious and comfortable rooms with kitchenettes and balconies than a suburban location with business or solo customers.
  • Facilities: Covering common areas and services that the hotel provides for its guests, such as the lobby, reception, restaurant, bar, lounge, gym, pool, spa, business centre, meeting rooms, function rooms, and more. The hotel’s facilities should create demand and value for its customers – a suburban location with corporate or event customers may require more extensive and flexible meeting and function facilities than a suburban location with leisure or transient customers.
  • Services: This includes interactions and experiences that the hotel staff provide for its guests, such as check-in, check-out, housekeeping, room service, concierge, and valet. These are the types of elements that not only need to meet demand, but also need to exceed customers’ expectations with a personalised touch that goes a little ‘above and beyond’.
  • Brand: This refers to the name and reputation that the hotel has in the market. The brand of the hotel should convey a clear and consistent message and image to the target customers of the location. For example, a suburban location with brand-conscious or loyal customers may require a well-known and established brand than a suburban location with brand-agnostic or new customers.
  • Operator: This is the company or organisation that manages and runs the hotel on behalf of the owner or developer. The operator of the hotel should have the expertise and resources to deliver a high-quality product and service to the target customers of the location. A suburban location with complex or specialised demand may require a professional and experienced operator than a suburban location with simple or generic demand.

Feasibility Studies and Market Testing

To determine and deliver the product and service offering for a suburban location, developers and investors need to conduct thorough feasibility studies and market testing. They need to evaluate and compare different options and scenarios for their hotel project. It’s also important to select and negotiate with suitable partners and stakeholders for the hotel project, such as architects, designers, contractors, suppliers, brands, operators, etc.

Above all, it’s essential to ensure that the product and service offerings are aligned with the market positioning and value proposition of the suburban hotel development.

Selecting Partners and Stakeholders

In suburban hotel development, selecting the right partners is pivotal for success. These collaborators significantly influence various project aspects, including financing, construction, operation, and marketing. Here are essential considerations for choosing partners wisely:

  • Financial Backers: Choose investors or lenders experienced in hospitality and suburban markets, ensuring they align with your project’s goals.
  • Development Experts: Partner with reputable real estate developers, architects, and construction firms with suburban experience.
  • Hotel Management: Select a trusted hotel management company with a proven suburban track record and alignment with your vision.
  • Local Authorities: Build strong relationships with local authorities to navigate regulations, secure incentives, and streamline approvals.
  • Community Engagement: Engage with the local community, addressing concerns, gathering feedback, and fostering positive relationships.
  • Marketing Allies: Collaborate with marketing agencies, OTAs, and tourism boards to create effective strategies for attracting guests.
  • Sustainability Advisors: Work with sustainability experts to incorporate eco-friendly practices into your suburban hotel.

Is Suburban Hotel Development the Right Move?

Suburban hotel development can be an attractive and viable option for developers and investors who are looking for new opportunities in the hotel industry. Suburban hotel development can offer lower costs, higher returns, and less risk than CBD hotel development. However, suburban hotel development also requires careful planning, analysis, and execution.

To excel in suburban hotel development, it’s crucial for developers and investors to grasp the unique demand drivers and craft an exceptional hotel experience tailored to their target audience. This entails seizing opportunities and surmounting challenges inherent to suburban development.

With Axsia HTL, your suburban hotel project is in expert hands. We boast a rich track record of successfully delivering and advising on suburban hotels across Victoria and beyond. Count on us to identify and assess prospective suburban locations, enabling you to make informed decisions. Our expertise extends to designing and delivering a product and service offering optimised for market potential and profitability. Further, we excel at risk management and mitigation, safeguarding your suburban hotel project from uncertainties.

If you’re interested in suburban hotel development, please contact us today. We would love to hear from you and discuss how we can assist you with your hotel project. We look forward to working with you on your suburban hotel development journey.

hotel developers analysing financial projections on a tablet

Maximising Hotel Valuation Success in Development Projects

Hotel valuation plays a critical role in development projects, as it determines the feasibility and profitability of hotel investments. You may have grand aspirations for a stunning hotel project, but without a proper valuation, you’re like a ship adrift at sea. That’s why being well-prepared and informed are the keys to unlocking your hotel’s full potential.

The hotel valuation process can be complex. It involves various factors and assumptions that are influenced by the purpose, timing, and market conditions of the project. But don’t panic; in this article, we outline key steps for hotel developers to maximise their hotel valuation success and how we can assist you in your ventures as part of our holistic services.

Key Steps for Hotel Developers in Preparation

There are several key points to obtaining a valuation that accurately reflects the value and potential of a hotel project.

You might find that hotel valuation software can best assist you with the process and methodologies. Programs like Preno, Hotel Valuation Software and HVS come equipped with user-friendly software and tools to guide you through your investment valuation process.

Despite these softwares, it’s still important to understand the steps involved to ensure you’re making informed and calculated decisions.

1. Independent Financial Projections

As a developer, it’s important to create your own financial projections based on your own market knowledge and industry experience. Relying solely on brand or operator projections may be misleading, as those projections are often designed to persuade developers to choose a specific brand or operator.

By using your independent projections, you can have a primary source of data for investment feasibility, while using brand or operator projections as a secondary source for validation. This is a much more reliable method to use when casting financial projections and ensures your decisions remain unclouded by third-party influences.

2. Understand the Valuation Methodology

Developers need to understand the various methodologies used to value hotel properties. While there are various methods and approaches to value a hotel property, the income approach is the most commonly accepted. This method essentially values a hotel property based on its ability to generate income or cash flow.

The income approach can be further divided into two sub-methods: the direct capitalisation method and the discounted cash flow (DCF) method:

  • The direct capitalisation method values a hotel property by applying a capitalisation rate (or cap rate) to its net operating income (NOI). The hotel valuation cap rate is the ratio of NOI to property value and reflects the risk and return of the investment.
  • The DCF method values a hotel property by projecting its future cash flows and discounting them to their present value using a discount rate. The discount rate is the required rate of return for the investment and reflects the time value of money and the risk of the cash flows.

Familiarising yourself with these methods and how they can be applied to your potential investment property is essential in accurately calculating the valuation.

3. Consider Timing and Market Conditions

Hotel valuation is not a static process. It evolves with time and market conditions. Developers must consider external factors such as COVID-19 and its impact on the hotel industry, including demand, occupancy, revenue, and costs.

Developers should be aware of how timing and market conditions affect their project and adjust their projections accordingly. Additionally, understanding how the appointed valuer perceives the market and the assumptions they make in their valuations is crucial, as it can lead to different outcomes.

4. Conduct a Sensitivity Analysis

A sensitivity analysis is a valuable technique that evaluates the impact of changing variables on project outcomes. As a developer, you should conduct a sensitivity analysis to assess how changes in occupancy rates, average daily rates (ADRs), operating expenses, cap rates, or discount rates affect the value of your hotel property.

This analysis also helps to identify components that add or reduce value to the project and enables you to address these factors beforehand. It also helps to assess risks and uncertainties while developing necessary contingency plans.

5. Present the Project to the Valuer

Last but not least, presentation matters. Developers should effectively present their project to the valuer in a clear and convincing manner. This includes providing comprehensive information on the location, market, demand, supply, competition, brand, operator, contract, design, construction, operation, and performance of the hotel.

It’s key to establish a coherent narrative that links your vision, market research, financial projections, and valuation assumptions. Supporting evidence and documentation should be provided to substantiate claims and validate arguments.

a man conducting hotel valuation preparation on a latpopBenefits of Following the Preparation Process

By following these preparation steps, hotel developers like you can maximise their chances of success in the hotel valuation assessment. There are many benefits to following the process outlined above, including:

  • Accurate and Reliable Valuation: Independent financial projections and a solid understanding of valuation methodologies ensure the valuation more accurately reflects the project’s value and potential.
  • Risk Identification and Mitigation: Conducting a sensitivity analysis helps developers identify potential risks and develop contingency plans. This enables them to pre-emptively address factors that may affect the project’s value.
  • Clear Communication: A well-presented project helps valuers understand the developer’s vision and the process employed to develop that vision. It enhances communication and clarity between the developer and valuer.
  • Securing Funding and Achieving Desired Return on Investment: A thorough and well-prepared valuation report increases the likelihood of securing bank funding. Developers have a robust framework against which they can assess the valuation findings and challenge them if needed, thereby increasing their chances of achieving their desired return on investment.

The Bottom Line: Equip Yourself for Successful Hotel Valuation

Hotel valuation is a critical step in development projects. Hotel developers must be well-prepared and informed to ensure a successful valuation process. By following the key steps outlined above, you can maximise your hotel valuation success, identify risks, and secure bank funding.

Understanding the importance of independent financial projections, valuation methodologies, timing and market conditions, conducting sensitivity analysis, and effective presentation to the valuer are instrumental in achieving accurate valuations that reflect the true value and potential of their hotel projects.

Wondering what the next step is in your investment project valuation journey? At Axsia HTL, our experienced team can assist you with the management, planning, refinancing and support of your asset valuations. Speak to us today to get started.