Each hotel is a real estate asset and real estate is the most dominant component of hotel value. Consequently, real estate considerations are obviously paramount in the ownership side of hotel business and modern investors now expect even the operational leaders (such as general managers) to understand the real estate aspects of the business.

This module provides a strategic overview of hotel investments from three standpoints:

1. hotel valuation techniques
2. hotel investment analysis; and
3. behavioural aspects of investment decisions.

Starting from fundamentals of real estate markets, the module quickly moves on to thought-provoking aspects of the descriptive and normative phenomena in hotel investment business. Finally, the participants are sensitised to typical behavioural biases, heuristics and framing effects, mastering which will lead to superior managerial decisions.

Interactive module involving participants in debates, exercises, mini case studies, experiments and traditional lecturing.

Knowledge

• Describe unique aspects of real estate markets
• Define the structure of the commercial real estate markets
• Explain the structure of the hospitality business
  

Competencies

• Critique hotel valuation techniques:

                DCF, cost and market approaches to valuation

                Hedonic approach to valuation

• Conduct basic investment analysis:

                Unleveraged IRR,

                Leveraged IRR

Mindset

• Build awareness about common behavioural errors that managers
  are prone to

Each hotel is a real estate asset and real estate is the most dominant component of hotel value. Consequently, real estate considerations are obviously paramount in the ownership side of hotel business and modern investors now expect even the operational leaders (such as general managers) to understand the real estate aspects of the business.

This module provides a strategic overview of hotel investments from three standpoints:

1. hotel valuation techniques
2. hotel investment analysis; and
3. behavioural aspects of investment decisions.

Starting from fundamentals of real estate markets, the module quickly moves on to thought-provoking aspects of the descriptive and normative phenomena in hotel investment business. Finally, the participants are sensitised to typical behavioural biases, heuristics and framing effects, mastering which will lead to superior managerial decisions.