Maximising hotel value through effect asset management: Knight Frank
Due to the increasingly challenging environment facing the UAE’s hospitality sector (attributable to both supply and demand factors), hotel operators and owners are looking at how to drive incremental value from their existing portfolio.
In order to bridge the gap between actual and budgeted returns, concerned stakeholders are turning to new ways of increasing the bottom line both by streamlining costs and creating new revenue streams.
The recent Knight Frank Hospitality report: ‘Driving Hotel Value’ highlights key initiatives that can impact hotel value. If many small changes are implemented to the way hotels operate, net revenue can be stimulated in a meaningful way. The implications are clear as increasing net revenue leads to increased hotel value and as shown below, this can result in hotel values increasing by up to 22 per cent with nominal capital investment.
The potential uplift in hotel value can be achieved through a combination of initiatives aimed at both increasing revenues and decreasing expense:
- Rooms based initiatives can increase room revenue by over 10 per cent
- F&B based initiatives can stimulate outlet revenue by over 10 per cent
- Spa & recreation based initiatives can enhance net revenue by over two per cent
- Energy based initiatives can create utilities expense savings of up to 20 per cent