Document Type

Article

Publication Date

10-2017

Abstract

[Updated October 2017]

The Hotel Valuation Software, freely available from Cornell’s Center for Hospitality Research, has been updated to accomplish two goals:

  1. To reflect the many changes in the 11th Edition of the Uniform System of Accounts for the Lodging Industry (USALI)
  2. To work on any Windows, OSX, and web-based version of Excel without the use of macros or Visual Basic.

Version 5.0 of the Hotel Valuation Software provides numerous enhancements over earlier versions. In addition to a significant increase in functionality and an update to reflect the 11th edition of the USALI, Version 5.0 is compatible with any Windows, OSX, and web-based version of Excel.

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酒店评估软件手册和三个程序(点击这里 ) Users desiring a Mandarin version of the Hotel Valuation Software should click here


Users desiring additional functionality in the valuation model can download Hotel Valuation Software Version 4.0 (available below), which uses macros/Visual Basic and is only compatible with a contemporary Windows computer. Version 4.0 is not compatible with Mac.

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The Hotel Valuation Software remains the only non-proprietary computer software designed specifically to assist in the preparation of market studies, forecasts of income and expense, and valuations for lodging property. The software provides an accurate, consistent, and cost-effective way for hospitality professionals to forecast occupancy, revenues and expenses and to perform hotel valuations. Version 5.0 of the Hotel Valuation Software includes the following updates – a complete update to reflect the 11th edition of the USALI – the most significant change to the chart of accounts in a generation, an average daily rate forecasting tool, and a sophisticated valuation module. Using established methodology, the Hotel Valuation Software is a sophisticated tool for lodging professionals. The tool consists of three separate software programs written as Microsoft Excel files and a software users' guide. The tool is provided through the generosity of HVS and the School of Hotel Administration.

The three software modules are:

Room Night Analysis and Average Daily Rate:

  • Enables the analyst to evaluate the various competitive factors such as occupancy, average room rate, and market segmentation for competitive hotels in a local market.
  • Calculates the area-wide occupancy and average room rate, as well as the competitive market mix.
  • Produce a forecast of occupancy and average daily rate for existing and proposed hotels in a local market. The program incorporates such factors as competitive occupancies, market segmentation, unaccommodated demand, latent demand, growth of demand, and the relative competitiveness of each property in the local market. The program outputs include ten-year projections of occupancy and average daily rate.

Fixed and Variable Revenue and Expense Analysis:

  • The key to any market study and valuation is a supportable forecast of revenues and expenses. Hotel revenue and expenses are comprised of many different components that display certain fixed and variable relationships to each other. This program enables the analyst to input comparable financial operating data and forecast a complete 11-year income and expense statement by defining a small set of inputs:
    • The expected future occupancy levels for the subject hotel
    • Base year operating data for the subject hotel
    • Fixed and variable relationships for revenues and expenses
    • Expected inflation rates for revenues and expenses

Hotel Mortgage-Equity Valuation:

  • A discounted cash flow valuation model utilizing the mortgage-equity technique forms the basis for this program. Values are produced using three distinct underwriting criteria:
    • A loan-to-value ratio, in which the size of the mortgage is based on property value.
    • A debt coverage ratio (also known as a debt-service coverage ratio), in which the size of the mortgage is based on property level cash flow, mortgage interest rate, and mortgage amortization.
    • A debt yield, in which the size of the mortgage is based on property level cash flow.
  • By entering the terms of typical lodging financing, along with a forecast of revenue and expense, the program determines the value that provides the stated returns to the mortgage and equity components.

Comments

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© Cornell University. This report may not be reproduced or distributed without the express permission of the publisher.

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