Hotel Case Study

Hey!

I am breaking into a boutique REPE Hotel group. I heard about what the case study could look like. I am given pricing guidance plus OM, Financials, STR Reports, Brand PIP, and Capex spending. Suppose to build a valuation model with IRR hurdles. Any input on how to approach this? Appreciate any guidance!


 

Well- you’re going to want to make an assumptions page with all the info they give you, so it’s flexible.

Then use the pricing guidance and some reasonable debt assumptions, along with the financials to build a proforma cash flow page. Have that cash flow move into the waterfall where you have the IRR hurdles. You’ll want to create a return metric page- admittedly I don’t know anything about the key hotel ones- I hope you do. But, unlevered IRR, levered IRR, and equity multiple are standard for every asset. 

 

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