Financial Analysis of Hotel Investments

Evaluate hotel investment and hotel financing decisions and structure deals that meet the needs of the owner, the operator, and the lender.

Description

A hotel’s real estate is one if its most valuable assets and it is essential to be able to accurately value this critical investment. This course uses practical and theoretically grounded tools of investment analysis and valuation to introduce participants to contemporary practices in lodging investments. Participants will learn to evaluate hotel investments and hotel financing decisions and structure deals that meet the needs of the owner, the operator, and the lender.

This course explores the multiple elements and factors involved in the hotel investment decision including the hotel owner-operator-lender partnership and the different ways each party will evaluate a real estate investment deal. This multi-party view will enable you to negotiate the most favorable agreement based on your priorities and requirements and evaluate alternatives. This course provides thorough coverage of how a deal is structured using debt and equity financing, and the impact of debt financing on equity returns.

Who Should Take This Course?

This course is designed for:

• Managers and professionals in the hospitality industry with financial or operational responsibility for real estate, investments, or management contracts
• General managers, asset manager and others with asset management responsibilities
• Business development professionals with branded operators who have professional interaction with owners
• Lenders, investors, real estate professionals, and developers who seek entrance into the hospitality real estate market

Course Format

All eCornell courses are delivered online and are self-paced. An eCornell instructor leads the online discussions, grades any course projects, and is available to answer specific questions about the course content.

This course contains the following modules:

• The Hotel Owner-Operator-Lender Partnership
• Partnering Owners, Operators, and Lenders
• Different Owners Have Different Reasons to Invest
• Capital Budgeting Decision Models
• Evaluating the Deal: How Owners, Operators, and Lenders Evaluate Proposed Projects
• How the Owner Evaluates the Project
• How the Operator and Lender Evaluate the Project
• Overview of Hotel Market Valuation Methodologies
• Structuring the Deal: Current Equity and Debt Financing Structures
• Hotel Financing Cycle: Equity Financing
• Hotel Financing Cycle: Debt Financing
• Course Project: Investment Construction and Analysis

Benefits to the Learner

Participants who complete this course will be able to:

• Explain the varied motivations of owners, operators, and lenders in pursuing real-estate investments
• Analyze and evaluate investment projects from the perspective of owners, operators, and lenders
• Structure hotel investments that meet the needs of all parties
• Make informed decisions about the attractiveness of hotel investments, especially the decision to invest equity in a hotel

Authoring Faculty

Jan A. deRoos, Ph.D., Associate Professor

Sponsoring School

Cornell University's School of Hotel Administration

Total Learning Time

Approximately six hours over a period of two weeks

Certificate Information

This course can be applied toward the following certificate:

• Hotel Real Estate Investments and Asset Management