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The borrowing cost of debt financing continues to remain stable while equity financing continues to remain relatively cheap. We expect prices for large hotel properties to remain flat, but prices for small hotel properties to rise in the first quarter of the new year. We hope that operating performance as measured by EVA will finally become positive vis-à-vis an increase in the cap rate, assuming that total borrowing cost remains stable or it becomes cheaper to borrow debt or equity money. We also introduce a new performance metric, the standard unexpected price (SUP). This is report number 13 of the index series.


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Supplemental File:
Hotel Valuation Model (HOTVAL)
We provide this user friendly hotel valuation model in an excel spreadsheet entitled HOTVAL Toolkit as a complement to this report which is available for download from

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