Hospitality Property Valuation

Land Sterling professional valuers combine their technical and practical experience from many industry sectors to provide a trustworthy and accurate hospitality property valuation service. Below is what to expect during a hospitality property valuation process which you need to know before getting started.

Hospitality Property Valuation In Dubai

Hotel valuation in Dubai experienced a decrease of 15% in 2021 compared to 2019. Given the relaxation of international and regional travel limitations, government backing, and EXPO 2020, which started from October 2021 to March 2022. Due to this, investors and realtors will anticipate a short-term recovery in hotel values.

Land Sterling is among the most highly rated companies in Dubai as a high-quality hospitality valuation service provider. Our valuation team offers highly reputable hospitality valuation services through our global expertise and experience.

Importance of Conducting a Hospitality Valuation

Appraisals are commonly needed by hotel owners, lenders, and operators to determine the worth of properties in which they have a stake. A valuation is necessary to complete market analysis and assessment to determine the viability of the subject property.

Due to the overwhelming number of options that customers are presented with every day, or the paradox of choice—a thorough hospitality valuation becomes essential since it sustains them.

Services Offered During a Hospitality Valuation

Feasibility & Strategic Analysis

Developers conduct feasibility studies to evaluate and validate the ideal product to achieve maximum market penetration, performance, and internal rate of return on investment (ROI) for the product’s desired holding period.

It is typically done to offer unbiased and trustworthy information for the choice of whether to move forward with the project or not. Analyzing the demographic, geographic, economic, market, and financial factors is necessary for feasibility analysis for hotel projects.

Operator Search

The terms, conditions, and hotel operator selection are essential requirements for any hotel investment to succeed. On the other hand, the shortfall in hotel investment can be significantly attributed to bad decisions or poorly written management contracts.


Particular circumstances relating to a specialized business activity must be considered when determining a particular hotel’s value, including revenues and costs from the spa, food and beverage, conference and banqueting, and rooms.

Valuation reports are crucial for any owner or investment firm looking to develop, sell, or invest in real estate.

Investment Risk Monitoring

One of the most crucial tools in supporting the revenue models of a proposed hotel’s activity is the definition of source materials of the market in terms of local market specifics. Making a market analysis and financial projections is one of the first things a new hotel developer needs to do.

The marketing research can inform the client about the economic situation in a market area for new hotel development. In addition to defining the supply and demand for the current or potential hotels, it also defines the supply of hotel accommodations in the relevant market.

Intangibles That Affect Hospitality Valuation

Customer Lists

Customers are necessary for any profitable or successful business. When your hotel has a customer list, it demonstrates that it is a selling enterprise and raises the hotel’s value.

Once compiled, it will provide you with a complete picture of your customer, including what motivated them to make the reservation, which other rooms or dates they showed interest in, their interests, and even the services or amenities they utilized at the hotel.


Telecommunications and automation are among the technologies considered when estimating a hotel’s worth. Hotel operators are investing in systems and technologies that can personalize the experience for guests when they invest in digital apps for check-ins, room service, and other customer-oriented electronic communication. This eventually increases the hotel’s valuation process.

Reservation System

Another intangible asset in a hotel that may impact value is the reservation system. With a reservation system, your visitors won’t have to wait hours for confirmation from your staff, saving them time. The likelihood that a customer will choose another hotel is relatively low if they can book a room in a few simple steps.


Other important intangible assets include the hotel’s staff and management. Independent hotels place a higher value on hotel management. These are crucial in determining how much a hotel is worth.

Noncompete Agreements

Non-compete agreements should be considered because they are effective when valuing a business. This will eventually raise your hotel’s market value. Advocates claim that these contracts safeguard businesses’ intellectual property and stop the loss of essential personnel, clients, suppliers, and customer data.


Hotels may be evaluated for various reasons. It might be carried out for selling or business succession.  The value of a hospitality business can be determined using the various factors discussed above. Although business owners can perform a business valuation themselves, it is best to enlist the assistance of a qualified appraiser.

Land Sterling has over 14 years in providing a precise valuation of hospitality properties for restaurants and hotels in Dubai. Our ISO-Certified services follow RICS&RERA regulations. Having worked on over 10,000 projects, you can be confident with our valuation services. Get in touch with us today for a free quote on your hotel valuation process.

Frequently Asked Questions

Business professionals employ three main types of valuation techniques when determining a company’s value as a going concern. These include; DCF analysis, comparable company analysis, and precedent transactions.

Hotel appraisers use a rate called a room revenue multiplier (RRM) to estimate a hotel’s worth or calculate its gross revenue. It displays the value per room or how much money each room brings in annually.

The hospitality sector uses room revenue as a performance indicator. It is derived by dividing a hotel’s daily average room rate by its occupancy rate.

The following revenue streams are included in the room revenue: no-show revenue, day-use revenue, abrupt departure fees, delayed check-out fees, rental of trundle beds, and service fees.

The sale of a hotel’s primary revenue sources includes rooms, food & beverages, among other income. This will eventually determine the success of the establishment.

Vinodh Mahadevan MRICS


Vinodh Mahadevan MRICS

Vinodh Mahadevan is the Head of Business & Strategy at Land sterling and a Member of MRICS. With over 14 years of experience in investment advisory, consulting, valuation & advisory services, he has gained extensive exposure to valuation engagements. Vinodh's expertise includes due diligence exercises, appraisals of commercial and residential properties, mortgage and collateral appraisals, retail malls, large-scale industrial parks, hospitality and entertainment projects, and other special use real estate valuations.


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