Advisory & Consulting Services
LW Hospitality Advisors® (LWHA®) provides high-touch customized advisory and consulting services to a broad array of clients. Our experience through changing economic cycles has provided us the ability to effectively navigate today’s opportunities and challenges to provide unparalleled advice.
LWHA® offers a unique combination of experience in hotel operations, hotel transactional work and hotel ownership, which in turn provides our clients with a thorough and hands-on understanding of the hotel business alongside the business of hotels.
A Comparable Sales Analysis, also known as a Sales Comparison Approach, is one of the three approaches to value, commonly used in real estate appraisal. LWHA maintains a database of thousands of hotel transactions, which provides the latest market data to compare a subject property’s characteristics with those of comparable properties which have recently sold in similar transactions. Coupled with a sole focus on the lodging industry, LWHA’s depth and breadth of knowledge of hotel transactions uniquely positions our experts to adjust the prices of the comparable transactions which influence value.
Designed to inform short-term strategic decisions about hotel assets, LWHA Critical Asset Review services include current and future opinions of value, including important hold, invest or sell recommendations. We review market competitiveness, pricing, staffing, margins, sales & marketing, product, physical condition, branding and management effectiveness with a view towards enhancing value for the stakeholders.
Economic feasibility analysis is the determination of the financial viability of an idea, whether that be the development of a new hotel, refurbishment of portions of or an entire existing property, or a complete renovation and repositioning of a lodging asset. Principals of LW Hospitality Advisors (LWHA) have extensive experience developing, refurbishing, renovating and repositioning all types of lodging facilities. LWHA is an expert at the determination of accurate Cost Analysis which is a critical determinant of any economic feasibility analysis.
Principals of LWHA have extensive lodging real estate development, construction, and management expertise. LWHA offers complete site selection, feasibility, development, and construction services delivering hotel assets under an umbrella of leading brand families including InterContinental Hotels Group, Hilton Hotels Corporation, and Marriott International. LWHA has been involved in all types of ground-up hotel developments and building conversions across all market segments. From site selection and design review, to construction oversight, LWHA provides value-added advisory services throughout the development process.
Having executed thousands of lodging valuations and feasibility studies throughout the world, Principals of LWHA have mastered hotel Discounted Cash Flow Analyses (DCF). We have the expertise and the tools to logically and accurately think through the factors that affect an asset, such as future sales and expense growth and profit margins, as well as consider the market-based weighted cost of capital that reflects the risk applicable to projected net income. LWHA’s DCF Analysis services provide a reality check to brokers and other opinions of value.
LWHA Economic Feasibility Analysis services objectively and rationally uncover the strengths and weaknesses, opportunities and threats of an existing hotel or proposed venture, the resources required to carry the project through, and ultimately the prospects for success. Investors and lending institutions have long recognized LWHA for its objectivity, unbiased approach, and the credibility of our Economic Feasibility Analysis findings and conclusions.
LWHA Economic Impact Analysis services examine anticipated direct and indirect monetary benefit(s) or detriments in a given area as a result of the development of a hotel project. Areas of impact study include construction employment, operations employment; visitor spending, and tax (sales, income, hotel room revenues, property, and other) revenues.
LWHA Facilities Planning & Development Consulting services offer multidimensional market research and profit-potential analysis of property requirements and planning criteria for a wide variety of proposed hotel and restaurant projects. LWHA collaborates with architects to identify and recommend the optimal project development sequence, conceptual and space planning, and construction management within a balanced design, operations, and financial framework.
LW Hospitality Advisors (LWHA) is uniquely qualified to render Fairness Opinions as to whether the terms and conditions of a proposed lodging acquisition, hotel management agreement, ground lease, partnership structure, merger, or sale of part or all of a business are fair to the stakeholders of the entity concerned.
LW Hospitality Advisors (LWHA) conducts the Highest & Best Use Analyses of properties as if vacant and as if improved. LWHA is exceptionally skilled to conclude the Highest & Best Hotel Use of an asset and recommends:
- Hotel Type: Brand/ Independent, All-Suite, Boutique, Conference, Convention, Destination Resorts, Extended Stay, Gaming/Casino, Golf, Ski, Spa, and Waterpark.
- Hotel Market Class: Luxury, Upper-upscale, Upscale, Upper-midscale, Midscale, Economy
A highest and best-use analysis can be either completed within an appraisal or as a stand-alone assignment.
LWHA Market Supply & Demand Study – Occupancy & Average Rate Projections include the following steps:
- Analyze key documents relative to the proposed Hotel’s anticipated performance including, but not limited to, Smith Travel Research reports, comparable operating statements, and marketing plans;
- Assemble and analyze key economic and demographic data pertaining to the immediate market area and the regional market area to estimate the future growth potential of lodging demand;
- Interview representatives of local and state economic agencies and other related organizations such as the Convention and Visitors Bureau, Chamber of Commerce, and Economic Development Agency to determine patterns of growth, stability, or decline in the proposed Hotel’s market area;
- Assess the subject’s surrounding market to identify major known external factors that may positively or negatively affect the future lodging demand for the subject Hotel;
- Tour select existing competitive hotels to evaluate the present quality level, mix and scope of facilities, and physical condition. Interview representatives of key competitive hotels regarding market trends and their individual hotel operations, including demand segmentation, historical performance, market positioning, and any proposed improvements and/or renovations;
- Investigate any planned competitive hotel additions or expansions in the immediate and surrounding areas to determine each development’s progress, anticipated size, type, class, chain affiliation, facilities, and timing, plus an assessment of each project’s likelihood of completion;
- Analyze the historical and current lodging demand for the competitive set and estimate future changes in market demand based on factors studied in the market analysis;
- Prepare occupancy estimates for the competitive lodging market through stabilization;
- Evaluate the subject hotel’s facilities program relative to the ability to satisfy the potential demand segments available in the market. LWHA will address the proposed Hotel’s overall quality level, guest room inventory, amount of meeting space, and mix of ancillary amenities (food, beverage, recreational, in-room technology);
- Based upon the subject hotel’s facilities program, estimate occupancy and average daily rate for the initial 10 full years of operation.
LWHA Hotel Market Study – Projections of Income & Expenses include all the steps outlined in our Market Supply & Demand Study – Occupancy & Average Rate Projections plus:
- Development of detailed annual revenue and expense estimates corresponding to the volume of business and scope and quality of operations indicated by the estimates of future occupancy and average daily rate using operating data from comparable lodging facilities, and industry statistics;
- Preparation of a financial analysis for the subject Hotel for 10 full years of operation. Schedules are presented in inflated dollars and conform to the Uniform System of Accounts for Hotels.
Mixed-use real estate projects in urban and suburban locations generally integrate elements of residential, retail, office, recreation, entertainment, transit, and in many cases lodging. LWHA provides advice on the appropriate size, scale, and balance between the hotel component and other real estate components for a mixed-use development to be viewed as one integrated development and operation. Our Mixed-Use Asset Strategy Consulting services often begin at the pre-development stage, working with land planners, lawyers, and architects to create the optimal product concept and market-supported business model for a particular site.
LWHA Asset & Property Management Services provides guidance as to an optimal strategy for pursuing a successful hotel property tax appeal based on an asset’s situation and the jurisdiction involved. In most jurisdictions, a hotel assessed at a higher valuation than other similar properties may bear a very heavy burden of proof in a tax appeal. Before undertaking an appeal based on uniformity or equal protection requirements, owners should consult with LWHA for assistance regarding the relative benefits and costs of pursuing this type of action.
LWHA possesses extensive experience in successful product positioning. LWHA has the knowledge of local markets, the latest in competitive product offerings and effective branding strategies, as well as the skills to formulate a creative vision for a property-specific repositioning. LWHA employs proven methods to analyze and quantify potential financial benefits to reposition a property and suggest implementation of the repositioning strategy.
LWHA Restaurant Consulting services include market feasibility studies, operational reviews, revenue and cost control reviews, concept menu (re)design and development, management/franchise selection and negotiation, site selection, location analysis and lease negotiation, repositioning studies, facility planning, and strategic recommendations.
LWHA prepares Return on Investment (ROI) Analyses to validate or disprove high-dollar investment(s) in hotels by considering the benefits and costs of a given investment, along with the resulting net present value (NPV), payback, and ROI metrics that are required for informed financial decision-making.
LWHA conducts inspections of development sites to assess location attributes including access, visibility, proximity to demand generators, and perceived strengths and weaknesses relative to other competitive hotel facilities and locations.
When deciding or preparing for litigation, LWHA provides independent and objective review services addressing third-party appraisal/ advisory reports. LWHA conducts objective Third-Party Independent Reviews to assist owners/operators, attorneys, accountants, financiers, investors, developers, and government entities with opinions regarding:
- Completeness of the material under review;
- Adequacy and relevance of the data, including the propriety of adjustments (if any) to the data;
- Appropriateness of the appraisal methods and techniques used;
- Whether or not the analyses, opinions, and conclusions are appropriate and reasonable.
As an investor enters the due diligence process for a potential acquisition, LW Hospitality Advisors (LWHA) professionals perform the research and analysis that supports the final decision on the purchase of an asset or a portfolio of properties. Our services include analyses of market performance trends and property historical operating performance, along with financial analysis of estimates of future performance. Additionally, we engage in the evaluation of management contracts, franchise affiliations, tax assessment levels, technology, life safety, competitive positioning, local market risks, and property improvement plan requirements and capital expenditures.
