Financial Feasibility & Appraisal Services

SPHM Hospitality completes Market & Financial Feasibility Studies, Appraisals, Economic Impact Studies, and Impact Analyses for hospitality properties. Lenders, developers, investors, and property owners utilize SPHM Hospitality for their financial feasibility and appraisal needs.
 

Market & Financial Feasibility Study

SPHM Hospitality sets the standard for high-quality, thorough market and financial feasibility studies. We understand that an insightful, well-researched feasibility study is the most important aspect of informed decision making when planning a hospitality property. Our studies assist our clients in the decision-making process as they determine how to proceed with a proposed project. 

 

Appraisal & Tax Appeal Appraisal

Because SPHM Hospitality is solely focused on the hospitality industry, we have the resources and expertise to ensure well-researched and reasoned appraisal reports for our clients. Our thorough and expert analysis of market data, financial acumen, sophisticated hospitality valuation model, and understanding of hospitality concepts makes us uniquely positioned to deliver a credible appraisal report that can be used by lenders, developers, and owners.

 

Economic Impact Study

As a complement to the feasibility study, the economic impact study focuses on the data that attracts municipal incentives for a project or helps a developer sell the vision to local officials. A governmental entity may also use the economic impact study to determine whether to offer incentives to a developer.

 

Impact Analysis

SPHM Hospitality works with major hotel brands to examine the effects of a franchise hotel entering a market where a same brand hotel is already in operation. The owner of the existing franchised hotel or the franchise company may order the study when a new similar brand is being considered near an existing franchise.


 

Market & Financial Feasibility Study

SPHM Hospitality sets the industry standard for high-quality, thorough market and financial feasibility studies. We understand that an insightful, well-researched hotel or leisure property feasibility study is the most important aspect of reasoned decision making when planning a hospitality property. Our studies assist our clients in the decision-making process as they determine how to proceed with a proposed project.
 

A market and financial feasibility study is typically prepared for proposed projects or for existing properties being considered for significant changes.  The study analyzes market conditions, economic and demographic factors, site conditions, and competitive properties entering or leaving the market.  We research properties that are closing and new supply additions. We analyze existing and projected demand generators in the market. The study estimates the operating performance of the proposed project and may suggest variations in size or scope. Lenders, developers, owners, and managers rely on SPHM Hospitality to provide insightful and accurate analysis regarding the feasibility of proposed projects. We tailor the scope of our assignment to each client’s needs.

The market and financial feasibility study includes the following components:

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• Area, demographic, and neighborhood analysis

• Site review

• Proposed development recommendations and costs

• Market analysis

• Proposed development usage and pricing analysis

• Financial analysis

• Valuation analysis

• Comparison of value created to projected development costs

 

As part of our studies we:

• Conduct extensive supply and demand interviews when researching performance levels of hotels and leisure real estate within local and regional markets.

• Utilize a sophisticated hospitality valuation and analysis model that provides a detailed analysis of a market by evaluating competitive factors, our databases of comparable financial information, comparisons with similar properties, and industry standard reports.

• Review data generated from STR, the Host Study, International Association of Amusement Parks and Attractions, the World Waterpark Association, National Ski Area Association, the American Resort Development Association, the National Golf Foundation, and the National Restaurant Association.

 

We offer hotel feasibility studies, waterpark feasibility studies, golf course feasibility studies, ski resort feasibility studies, conference center feasibility studies, sports complex feasibility studies, and amusement park feasibility studies.

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View the Table of Contents for a typical Feasibility Study.

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Hotel Appraisal & Tax Appeal Appraisal

Because SPHM Hospitality is solely focused on the hospitality industry, we have the resources and expertise to ensure well-researched and reasoned appraisal reports for our clients. Our thorough and expert analysis of market data, financial acumen, sophisticated hospitality valuation models, and understanding of hospitality concepts makes us uniquely positioned to deliver an appraisal report that can be utilized by lenders, developers, and owners.

 

SPHM Hospitality’s expert appraisers and consultants analyze the market to determine the value of a property. This analysis considers the income capitalization approach, sales approach, and cost approach. We analyze data generated from STR, CoStar, the HOST Study, CBRE Trends, International Association of Amusement Parks and Attractions, the World Waterpark Association, National Ski Area Association, Themed Entertainment Association, American Resort Development Association, the National Golf Foundation, and the National Restaurant Association.

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The appraisal report includes the following components:

• Property inspection

• Area, demographic, and neighborhood analysis

• Market analysis

• Subject performance analysis

• Highest and best use analysis

• Financial analysis

• Valuation analysis utilizing:

  • Income Capitalization Approach

  • Sales Comparison Approach

  • Cost Approach

• Reconciliation of value

 

SPHM Hospitality has two consultants who hold the Appraisal Institute’s MAI designation. An appraiser with the MAI designation exceeds the state certification and licensing required of all appraisers. When you hire an MAI, you receive the services of a professional with specialized training and experience in the appraisal industry who adheres to specific standards and ethics and must fulfill continuing education requirements. Our experienced SPHM staff prepare the highest quality real estate appraisal reports for the hospitality industry. All of our appraisers are state licensed and adhere to the strict state and national standards of appraisal practice.

 

Additional appraisal services we offer include:

• Appraisal reviews

• Tax appeal appraisals

• Appraisals to determine value of the going concern

• Appraisals to allocate value among real estate, personal property, and business value

• Expert witness testimony in relation to any appraisal we prepare

 

We prepare hotel appraisals, waterpark appraisals, golf course appraisals, ski resort appraisals, conference center appraisals, casino appraisal, and amusement park appraisals.

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View the Table of Contents for a typical MAI Appraisal.

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Economic Impact Study

As a complement to the feasibility study, the economic impact study focuses on the data that attracts municipal incentives for a project or helps a developer sell his vision to local officials. A governmental entity may also use the economic impact study to determine incentives offers available to a developer.

An economic impact study analyzes temporary and permanent effects on the local economy generated by the development and operation of a new hotel or resort. Temporary impact includes jobs and revenues created during construction and future tax revenues. Permanent economic impact is generated by permanent jobs created, ongoing revenues realized by service providers, and tax revenues once the hotel or resort is operational.

 

The economic impact study report will analyze the following impacts:

• Construction Impact

• Operation and Visitor Impact

• Employment Impact

• Tax Revenue Impact

• Other Impact

 

Our study evaluates three types of economic impacts from a project on the city, county, and state. These include:

• Direct-Effect Impact: jobs and spending directly created by the construction and operations of the proposed property

• Indirect or Induced Impact: production changes in downstream industries associated with the initial direct spending and employment at the facility

• Final Impact: overall economic impact of a change in final demand on output, earnings, and employment on a region’s economy. The final impact calculations represent the increased output, earnings, and employment that occur in an economy because of spending caused by the proposed development.

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Impact Analysis

SPHM Hospitality works with major hotel brands to examine the effects of a franchise hotel entering a market where a same brand hotel is already in operation. The owner of the existing franchised hotel or the franchise company may order the study when a new similar brand is being considered near an existing franchise. The applicant property and the objecting property are analyzed to determine how much impact, if any, the objector will experience as a result of new supply addition of the same brand.

 

Our impact analysis includes the following components:

• Interview representatives of the applicant and objecting properties and others knowledgeable about the market.

• Conduct an area review of the market

• Analyze the actual performance of the existing hotel and consider demand sources for the proposed hotel.

• Determine the current demand at the objecting property and consider specific demand segments that may switch to a new property if it were constructed.

• Analyze potential additional demand that would come to the objecting property from having another brand affiliation in a general market.

• Estimate the occupancy, average daily rate, and room revenue impact that may occur from the addition of new supply.

• Estimate both base and incremental impact.