Hotel / Motel Appraisals

Hotels and Motels are typically appraised as "going-concerns."  It is not possible to separate a hotel / motel business entity from the building.  Thus, appraisers analyze the income and expenses of a hotel / motel operation over time as part of the appraisal process.  While hotel / motels buildings can be appraised even thought they are not operational, owners and lenders generally want to know what value the property has if it is operating are "stabilized" with the assumption of competent management.     

The hospitality market in Las Vegas is in some ways unique.  A hotel / motel constructed in many parts of Las Vegas can generate significant tourism related income due simply to its  proximity to tourism centers including; the Airport, the Convention Center, the Boulder Strip,  Downtown Las Vegas or the Las Vegas Strip.  The Las Vegas Convention & Visitors Authority (LVCVA) is a significant primary source that tracks and reports on news and research / statistics on the Las Vegas Hotel and Motel market.  Check out the "Stats & Facts" page.

Appraisers consider the Average Daily Room Rates (ADR), hotel / motel occupancy, ancillary income, expenses and revenue per available room (RevPAR) when they analyze hotels and motels.  An article on the Appraisal Articles site discusses "Motels, Hotels and the Hospitality Market in Las Vegas 2013."

Las Vegas hosts about 22,000 conventions each year and the attendance expected to many of them is significant.  For example, the Consumer Electronics Show (CES) (Scheduled this year for November 1, 2013) is expected to draw nearly 150,000 attendees.  Also notable conventions include; Magic International (115,000), the National Association of Broadcasters (135,000) and Specialty Equipment Marketing (130,000).  The National Finals Rodeo (NFR), holidays and other activities are also large-scale draws.  Room rates and occupancy rates can thus vary dramatically depending on whether a convention, rodeo or other special event is in town.

While primary Las Vegas hotel / motel market research is always the best source for appraisal data, we have found that the Korpacz Real Estate Investor Survey, available via the PriceWaterhouseCoopers Internet site offers excellent appraisal information, including trends and capitalization rates on hotel / motel properties.  The Cornell University School of Hotel Administration, PKF Hospitality Research and Smith Travel Research (STR) are additional sources of information that we have found to be useful in our past hotel / motel appraisal assignments.            

Commercial Real Estate Appraisals in the Las Vegas & Henderson, Nevada Area.