IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

The Separation of Real Estate Value From Business Value, in Hotel Buildings Valuation. An Exploratory Work

  • Joao Manuel CARVALHO
Registered author(s):

    Building valuation aims at stating a real estate value, which is the value of land and built premises. Hotel building valuation seems to have departed from the value statement for land and built premises and evolved to the mingling with hotel operating business. This evolution might require hotel building valuation to be performed by hotel business analysts more than by real estate valuers. Though, hotel buildings may be envisaged as income assets and hotel's underlying real estate appraised accordingly. The integration of real estate value on a casuistic business model raises the risk of inaccuracy in the valuation of land and built premises, if taken per se. From this perspective, we considered a simple multiple regression model, in which a set of variables that are easily and directly obtainable from hotel owners and that bear the closest possible connection to real estate value (e.g., age of building and type of tourist location), the dependent variable being the property value per room. Also, normal business variables (e.g. average daily rate multiplied with the occupancy rate) were included in the model as well. The purpose of the model was the comparison of the role of each category of variables (i.e., "real estate" and "business") in the formation of the property value per room (which is the standard benchmark in hotel building valuation) by analyzing a sample of previously valued hotel buildings. The model allows for the explanation of the stated property value to a significant extent, therefore hinting to the relevance of the chosen variables. It also provides for a benchmark of the proportion "real estate" variables should be expected to bear in the stated property value, with the need for deviations to be investigated through further valuation refinement. This outcome could therefore provide hotel real estate valuers with a tool to assess the accuracy of their valuation.

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Article provided by National Association of Romanian Valuers in its journal The Valuation Journal.

    Volume (Year): 6 (2011)
    Issue (Month): 1 ()
    Pages: 106-125

    as
    in new window

    Handle: RePEc:vaj:journl:v:6:y:2011:i:1:p:106-125
    Contact details of provider: Postal: 7 Scărlătescu Street, Sector 1, Bucharest, 011158, Romania
    Phone: +40213156564
    Fax: +40213111340
    Web page: http://anevar.ro
    Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:vaj:journl:v:6:y:2011:i:1:p:106-125. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Radu Pantelica)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.