Asset Management
Detecting weaknesses and finding solutions
Since many years, the hotel industry undergoes a deep structural change with the consequence that many mid-sized companies have increasing difficulties to compete on the market. But also the performance of national and international hotel chains often does not meet the expectations of capital providers regarding to cash flows, yields and the ability to fulfill the debt service. Hence, many lease contracts that appear safe cannot be fulfilled in the long-run.
As part of our asset management, HOTOUR offers different services which can be freely combined aiming at providing customized solutions and quick assistance.
Analysis of weaknesses
This analysis provides the client – hotel owner, operator or financing institute – with a detailled overview of the current performance of the hotel, its weaknesses and suggestions in order to eliminate them.
Services:
- In-depth analysis of operational figures
- On-site analysis of operational processes over several days
- Throrough assessment of the hotel surroundings, relevant competitors and external presentation
- Detailed determination of the ability to cover debt service obligations
Next steps – depending on the results of the analysis:
Creation of a business plan, coaching, controlling / monitoring or restoration surveys.
Controlling and Reporting
In regard to variable lease or management contracts, we support hotel investors with regular and unbiased reports about the development of the ongoing business.
Services:
- Monthly or quarterly-based annotation and validation of the profit and loss statement as well as the most important operational figures
- Benchmarking with relevant competitors and the predefined market
- Regular communication with the operator's management
- Development of recommended actions - if necessary
Controlling/ Monitoring
Following operational consulting and the implementation of the business plan, our monitoring services intend to reassure the long-term viability of the business. They are either requested by the hotelier or the financing institute. In this matter, we moderate the interests of all parties involved and submit reports regarding the current status of the business.
Services:
- Monthly or quarterly reviews of the profit and loss statements, providing our clients with the most important operational figures
- Benchmarking with relevant competitors and the predefined market
- Regular communication with the management of the operator
- Development of recommended actions, if necessary
Consulting in Investment Decisions
If hotels require investments on a large scale, coordination needsbetween the operator (lessee) and the investor (lessor) arise. The aim is to reasonably aligne the separate budgets for building & structure and FF&E. In this context, we moderate between the differenct interests of both investor and operator during the conception and planning process.
Services:
- Hotel-specific advice during the conception and planning process
- Participation in planning and construction meetings
- Monitoring of the FF&E budget
- Moderation between the different interests of the project stakeholders
Contract Negotiations / operating hotels
Our advisory service during negotiations with the operator is based on economic and hotel-specific dimensions and performed in close coordination with the lawyer of the investor or developer.
The aim is to draw up a contract that also fulfils the requirements of other investors, especially institutional ones.
Services:
- Development of basic economic terms for the lease or management contract (term sheet),
- Determinationl of guarantees and minimum rents
- Elaboration of variable lease elements,
- Negotiation of hotel-specific contract elements such as technical assistance fees, takeover modalities, cancellation clauses, references for targeted quality standards, etc.
Next step:
Signing of the contract
Change of Operator
As the replacement of an operator normally occurs while running the business, special
intuition and experience is needed on the part of the investor. The goal is to accelerate and simplify the often tedious process of acquiring an operator, which we succeed in doing thanks to our excellent contacts to decision-makers within the hotel operators.
Services:
- Development of a concept and pre-selection of a suitable operator,
- Creation of exposés and information material,
- Support during contract negotiations,
- Handling the interests of the Owner/ Constructor.
Next step:
Contract negotiations
Sale / Investors search
Our support during the sales period enables our clients to save valuable time since we address only suitable investors, having all the required information at hand.
Services:
- Concept developtment and short listing of suitable investors
- Development of a sales particular or an information memorandum
- Contacting potential investors,
- Preparation and attendance of negotiation meetings
Next step:
Signing of contract
Assessment of Acquisition/ Hotel-Specific Due Diligence
Goal: basis for pricing and purchase decision, overview about opportunities and risks of the hotel real estate, the location and the operator.
Services:
- Assessment of the opportunities and risks of the hotel property and the site, the local hotel market, the type of operation and the operator´s contract,
- Evaluation of the alternative use in the sense of a different operator,
- Evaluation of a potential need for renovation,
- Assessment of the need for investments,
- Evaluation of potential in the operation and its environment.
Next step:
Purchase
Hotel Check
The hotel check acts as a first site analysis for the client – hotelier owner and operators as well as financing institutes or potential buyers. Created as a basis for internal decision making, it quickly and informally reflects the hotel's weaknesses and outlines the potential ways to eliminate them. This brief analysis is also highly suitable prior to a planned hotel purchase.
Services:
- Brief evaluation of the operational figures, the hotel surroundings, its external presentation and marketing as well as the sustainability of the debt service coverage
- Assessment of the future potential of the hotel property and the operator,
- Evaluation of re-leasing, sale or purchase prospects.
Next steps – depending on the results of the analysis:
Creation of a business plan, coaching, controlling or in-depth analysis of the weaknesses, change of operator, sale / investor search.
Business Plan analysis
This tool provides valuable feedback to hotel owners on the quality and soundness of the self-produced business plan. This service also benefits investors and financial institutes that try to validate the business plan of operators and other borrowers. Particularly, we focus on the feasibility of financial forecasts and the ability to cover lease or debt service obligations in the long-run.
Services:
- Thorough analysis of the operational figures and financial forecasts
- Assessment of forecastsbased on the market environment
- Assessment of cost forecasts based on the operating concept
- Verification of the ability to cover debt service obligations
Next steps – depending on the results of the analysis:
Coaching, Controlling/Monitoring
Business Plan development
The future positioning and business policy of the hotel will be based on the thorough development of the business plan. Additionally, we support our clients with the implementation of all recommended actions.
Services:
- Definition of the short-term, medium-term and long-term corporate goals,
- Conception of a marketing plan,
- Development of a 5-year financial forecast,
- Listing of all recommended actions and single steps.
Next steps – depending on the results of the analysis:
Coaching, Controlling/Monitoring
Business plan implementation/ Coaching
During the implementation period of a new business plan, we accompany and advise hoteliers on request, on demand of the financing institute or the hotel owner and provide support in all strategic and operational matters.
Services:
- Implementation support of the marketing plan
- Establishment and implementation of a controlling system
- Management meetings on a regular basis
- High level of operational advice
Next steps – according to the needs of the business:
Controlling/Monitoring
Validation of budgets and marketing plans
With regards to variable lease or management contracts, investors often need hotel-specific knowledge in order to verify operational or investment budgets and marketing plans of the operator. We can help to bridge this gap through our industry intelligence and operational experience.
Services:
- Thorough analysis of actual operational figures and financial forecasts, which are the basis for budget allocations
- Verification of turnover forecasts based on the marketing plan
- Verification of cost forecasts based on the operational concept and actual figures
- Realistic assessment of required investments
- Validation of the expected lease or operational cash flow (management contracts)
Next steps – depending on the results of the analysis:
Controlling/Monitoring
Restructuring analysis
Our restructuring analysis are mainly based on the IDW standards (German Institute of accountants) for restructuring concepts, adjusted to the specific needs of the hotel industry.
Our aim is to assess the current status of the business in order to develop a sustainable long-term positioning.
Services:
- Assessment of the external environment conditions of the business
- Detection of operational difficulties that led to the current economic situation
- Evaluation of future potential
- Assessment of required investments and necessary funding
Next steps:
Bank financing, coaching
Bank financing
Due to a long-standing collaboration with financing institutes, HOTOUR enjoys an excellent reputation within the branch. We know the requirements of the banks which finance hotels and we take care that the required processes are implemented quickly.
Services:
- Consulting during the research phase for a suitable financing institute
- Creation of the required surveys according to the needs of the financing bank
- Preparation of the hotel-specific relevant information for the credit request
Next step:
Hotel related advice and support during the realization phase.
Services for Investors
Hotels - an asset
Hotels belong to the most complex investment typeswithin the real estate industry. In order to achieve a long-term increase in value, it requires an intense collaboration between the lessor and the lessee. Nevertheless, the interests and goals of the investor and operators often diverge.
Our task is to mediate between these different interests, while taking the special aspects of the hotel business into account. As part of our investor services, HOTOUR focuses particularly on the owner's interests.
Objectives:
Value-enhancement of the property as well as the optimization of cash flows and profits.
The scope of services includes:
Services for Privately-Owned Hotels
Operational consulting
Operational consulting of privately-owned businesses is mostly concerned with refinancing and restructuring of the hotel, which often occurs due to expansion or modification needs and during periods of business succession.
Objectives:
The goal of our work is to establish the long-term direction of the business and the conservation of the property's value.
The range of services includes:
