I have an interview with a hotel developer. What are some of the things I should really prep/focus on and what are some of the questions to expect (and ask to show am on point)?
Thanks.
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What is the position you are interviewing for?
You definitely want to let them know that you are familiar with these things:
1.ADR (Average Daily Rate) 2. Occupancy 3. How the two above give you RevPAR (Revenue per available room) and how to calculate it. 4. Different expense categories. Departmental, fixed, and undistributed. 5. STR reports (hotel competitive set reports) 6. A strong understanding of brands and flags. What is a Quality Inn (Choice) compared to in the Hilton/Starwood/Marriott/IHG brands and the value associated with each. 7. Difference between limited service and full service hotels. 8. The business aspect of hotels, and that is isn't just real estate. 9. FF&E, PIP's and franchise fees.
Considering its a development gig, you may want to know something about construction.
Thanks guys. Acquisitions/Development Analyst~Associate role.
Dr. Baltar,
If it is an entry-level position you shouldn't have to worry too much. They'll usually train you because hotel is generally among the most technical areas of CRE. As such, most of the learning is experiential.
Don't forget that you are dealing with 100% fixed costs.
100% fixed costs? Please explain...
Not literally, but in the sense that you have to keep everything up and running, even without a "tenant."
I suppose...although you adjust your operating expenses depending on occupancy...for example, if you are 100% occupied, you have to supply x number of hotel guests with shampoo; whereas if you are 0% occupied, you don't have any shampoo expense...and with other asset types, you still have to pay RE taxes, insurance, etc even if they don't have tenants...
Hotel vacancy changes day to day, and barring holiday seasons it is generally difficult to forecast...and thus, adjust expenses. That is why Orbitz, Travelocity, etc. are a win-win.
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