Leisure may be used interchangeably with rest; it refers to a time when a person is not working. On the other hand, entertainment is providing or being provided with amusement.
One might argue that entertainment is part of leisure. It is what people do to enhance their experience while resting. Examples of entertainment include acting or watching plays or movies. Reading, playing games or sports also qualify as entertainment.
These leisure and entertainment activities need specialized buildings and other enabling facilities. Such facilities include movie theatres, hotels, spas, sports stadia, golf courses, country clubs, studios and other facilities in that value chain.
Furthermore, professionals obtain innovations and skills, industry-related patents, licenses and authorizations, formulas, recipes and franchises, etc. All these have quantifiable value and may be part of the leisure and entertainment property.
Why You May Need Leisure and Entertainment Valuation
This is a high-risk, high-reward industry, so insurance companies want to get their valuation right. You also want the correct valuation to ensure you pay the correct premium for your cover.
Leisure and entertainment establishments often get insurance against loss of business. Therefore, it is necessary to have an accurate valuation that will enable you to project possible income. The insurer will then compensate you enough in case of business interruption.
Valuation is part of the investment advisory for investors; they need a clear picture of the business’s financial health. An exhaustive analysis includes future earnings projections, which allow investors to make informed decisions.
Tax assessment is another reason you must have your entertainment and leisure business valued. The entertainment tax levied on this industry is arguably the heaviest globally. You might incur significant losses to the government if your property is overvalued.
Undervaluing, on the other hand, might cause serious trouble with the tax authorities even when unintentional. Therefore, your assessor needs to value your business just right.
Furthermore, valuation forms part of the best-use analysis. Many of these properties are useable for more than one purpose, and assessment enables you to decide the most profitable use.
How to Quantify the Value of an Experience in Entertainment and Leisure
Assessing a business’s value is only complete once you have valued what it sells. Businesses in the leisure and entertainment industry mostly trade in experiences. Thus a building technical consultancy is not enough because it is only possible to effectively value leisure and entertainment property by valuing customer experience.
But how do you assess the worth of something so abstract?
Assessing experiences is challenging due to their highly subjective nature. What one person considers a great experience may be less appealing to another. Nevertheless, certain factors enhance the experience for the average person. These are the factors an assessor may consider.
Social Setting
People want to feel part of society, even during leisure. Therefore, the quality of the experience in a leisure and entertainment establishment partly depends on whether it meets this need. Staff friendliness and opportunities to interact with fellow patrons meaningfully enhance this factor.
Sensory Stimulus
This has to do with what patrons see, feel, hear, taste and smell while in the facility. Some of these entertainment spots offer meals whose taste you can get anywhere else. Many are located near natural phenomena that are impossible to see elsewhere. For part of their value, great sunset views, swimming in hot springs, the smell of rare flowers, etc.
Novelty
The experience will be more valuable if the establishment offers something innovative or rare that you can’t find in most other places.
Challenge and Participation
Some of the more adventurous patrons love a challenge, and the presence of such a challenge enhances the value of the experience for them. In addition, opportunities to participate in a game or a communal activity add value to the experience.
Suspense and Surprise
This enhances the experience in theatrical performances or other types of service in the establishment. Furthermore, the need is met when the joint creates anticipation and delivers something of interest to the patrons.
What Makes a Good Leisure and Entertainment Valuer?
It takes more than one specialist to assess a complex leisure and entertainment establishment. However, for a team member to be effective, they need to be trained and specialised in the aspect they assess. In addition, they should be respected members of professional and peer organisations. Finally, it helps if the valuer demonstrates practical experience in similar work.
Conclusion
Leisure and entertainment property valuation is a speciality field that caters for this field’s specific needs. All establishments dedicated to recreation need to be evaluated to enable management to determine the best way to use them. Valuation also helps when dealing with potential investors and tax authorities.
Land Sterling offers the best Leisure & Entertainment Property Valuation in Dubai. Get a quote from a specialist team. RICS & RERA regulated ISO-certified firm.
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FAQ
What does the leisure and entertainment sector include?
The leisure and entertainment sector includes businesses where people go to spend their free time. These are establishments that offer amusement to their patrons.
How much does leisure and entertainment real estate consultancy cost?
Several factors determine the cost of consultancy for leisure and entertainment real estate. The factors vary from case to case, and a valuer can only assess the costs on a project-to-project basis. The main cost determinant is the scope of work; which aspects of the business do you need to be evaluated, and how complex is the business?
Why should you hire a leisure and entertainment property manager?
You should hire a property manager to ensure the establishment is well maintained. Facilities in this industry must always be in mint condition, and you need someone to keep them. Also, an excellent property manager can help a business determine the most profitable use of facilities.
Why get professional advice before investing in leisure and entertainment real estate?
Professional advice is important before investing in this industry because it is a high-risk venture. You will get advice on where to invest and when to invest for maximum returns.
