SAMPLE HOTEL VALUATION by Osman Cenk Demiroglu, 2001
Operational Analysis
| Fiscal Years ended | Year 2005 | Year 2006 | Year 2007 | Year 2008 | Year 2009 | Year 2010 | Year 2011 |
| at the last day of Decembers | |||||||
| SALES | |||||||
| Rooms Revenue | 8.163.225 USD | 9.312.975 USD | 10.462.725 USD | 10.462.725 USD | 10.462.725 USD | 10.462.725 USD | 10.462.725 USD |
| Number of Rooms | 150 | 150 | 150 | 150 | 150 | 150 | 150 |
| ADR | 210 USD | 210 USD | 210 USD | 210 USD | 210 USD | 210 USD | 210 USD |
| Occupancy Rate @ (%) | 71 | 81 | 91 | 91 | 91 | 91 | 91 |
| Food and Beverage | 4.081.613 USD | 4.656.488 USD | 5.231.363 USD | 5.231.363 USD | 5.231.363 USD | 5.231.363 USD | 5.231.363 USD |
| Other (Parking, Car Rental etc...) | 1.632.645 USD | 1.862.595 USD | 2.092.545 USD | 2.092.545 USD | 2.092.545 USD | 2.092.545 USD | 2.092.545 USD |
| Total Revenues | 13.877.483 USD | 15.832.058 USD | 17.786.633 USD | 17.786.633 USD | 17.786.633 USD | 17.786.633 USD | 17.786.633 USD |
| DEPARTMENTAL EXPENSES | |||||||
| Rooms | 1.959.174 USD | 2.235.114 USD | 2.511.054 USD | 2.511.054 USD | 2.511.054 USD | 2.511.054 USD | 2.511.054 USD |
| Food and Beverage | 3.061.209 USD | 3.492.366 USD | 3.923.522 USD | 3.923.522 USD | 3.923.522 USD | 3.923.522 USD | 3.923.522 USD |
| Other | 734.690 USD | 838.168 USD | 941.645 USD | 941.645 USD | 941.645 USD | 941.645 USD | 941.645 USD |
| Total Expenses | 5.755.074 USD | 6.565.647 USD | 7.376.221 USD | 7.376.221 USD | 7.376.221 USD | 7.376.221 USD | 7.376.221 USD |
| DEPARTMENTAL INCOMES | |||||||
| Rooms | 6.204.051 USD | 7.077.861 USD | 7.951.671 USD | 7.951.671 USD | 7.951.671 USD | 7.951.671 USD | 7.951.671 USD |
| Food and Beverage | 1.020.403 USD | 1.164.122 USD | 1.307.841 USD | 1.307.841 USD | 1.307.841 USD | 1.307.841 USD | 1.307.841 USD |
| Other | 897.955 USD | 1.024.427 USD | 1.150.900 USD | 1.150.900 USD | 1.150.900 USD | 1.150.900 USD | 1.150.900 USD |
| Total Operating Dept. Income | 8.122.409 USD | 9.266.410 USD | 10.410.411 USD | 10.410.411 USD | 10.410.411 USD | 10.410.411 USD | 10.410.411 USD |
| UNDISTRIBUTED OPERATING EXPENSES | |||||||
| Operator Related Expenses | 816.323 USD | 931.298 USD | 1.046.273 USD | 1.046.273 USD | 1.046.273 USD | 1.046.273 USD | 1.046.273 USD |
| Operator Related Expenses (%) | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| General and Administrative | 812.241 USD | 926.641 USD | 1.041.041 USD | 1.041.041 USD | 1.041.041 USD | 1.041.041 USD | 1.041.041 USD |
| General and Administrative (%) | 10 | 10 | 10 | 10 | 10 | 10 | 10 |
| Marketing | 649.793 USD | 741.313 USD | 728.729 USD | 728.729 USD | 728.729 USD | 728.729 USD | 728.729 USD |
| Marketing (%) | 8 | 8 | 7 | 7 | 7 | 7 | 7 |
| POMEC | 406.120 USD | 463.321 USD | 624.625 USD | 624.625 USD | 728.729 USD | 728.729 USD | 832.833 USD |
| POMEC (%) | 5 | 5 | 6 | 6 | 7 | 7 | 8 |
| Total | 2.684.477 USD | 3.062.572 USD | 3.440.667 USD | 3.440.667 USD | 3.544.771 USD | 3.544.771 USD | 3.648.875 USD |
| INCOME BEFORE FIXED CHARGES | 5.437.932 USD | 6.203.838 USD | 6.969.744 USD | 6.969.744 USD | 6.865.640 USD | 6.865.640 USD | 6.761.536 USD |
| FIXED CHARGES | |||||||
| Depreciation (DDB Method) | 4.000.000 USD | 2.857.143 USD | 2.040.816 USD | 1.457.726 USD | 1.041.233 USD | 743.738 USD | 531.241 USD |
| Insurance | 200.000 USD | 200.000 USD | 200.000 USD | 200.000 USD | 200.000 USD | 200.000 USD | 200.000 USD |
| Total | 4.200.000 USD | 3.057.143 USD | 2.240.816 USD | 1.657.726 USD | 1.241.233 USD | 943.738 USD | 731.241 USD |
| NET PROFIT | 1.237.932 USD | 3.146.695 USD | 4.728.928 USD | 5.312.018 USD | 5.624.407 USD | 5.921.902 USD | 6.030.295 USD |
| CASH FLOWS | |||||||
| Undiscounted | 5.237.932 USD | 6.003.838 USD | 6.769.744 USD | 6.769.744 USD | 6.665.640 USD | 6.665.640 USD | 6.561.536 USD |
Valuation Analysis
| Fiscal Years ended | Year 2002 | Year 2003 | Year 2004 | Year 2005 | Year 2006 | Year 2007 | Year 2008 | Year 2009 | Year 2010 | Year 2011 | |
| at the last day of Decembers | |||||||||||
| INVESTMENT COSTS | |||||||||||
| Estimated Value of Land | 2.000.000 USD | ||||||||||
| Unexpected Costs | 1.000.000 USD | 500.000 USD | 500.000 USD | ||||||||
| Construction Costs | 1.253.000 USD | 1.897.000 USD | 1.470.000 USD | ||||||||
| Body Construction (120 $/m2) | 336.000 USD | 336.000 USD | 168.000 USD | ||||||||
| Fine Construction (220 $/m2) | 308.000 USD | 616.000 USD | 616.000 USD | ||||||||
| Mechanical Works (120 $/m2) | 84.000 USD | 420.000 USD | 336.000 USD | ||||||||
| Electrical Works (75 $/m2) | 52.500 USD | 262.500 USD | 210.000 USD | ||||||||
| Infrastructure (50 $/m2) | 262.500 USD | 52.500 USD | 35.000 USD | ||||||||
| Architectural-Engineering | 210.000 USD | 210.000 USD | 105.000 USD | ||||||||
| works & Project Control (10%) | |||||||||||
| Furnishing ($ 1100/m2) | 1.155.000 USD | 2.695.000 USD | 3.850.000 USD | ||||||||
| TOTAL | 5.408.000 USD | 5.092.000 USD | 5.820.000 USD | ||||||||
| CASH FLOWS GENERATED FROM OPERATING ACTIVITIES | |||||||||||
| Courtyard by Marriott | 5.237.932 USD | 6.003.838 USD | 6.769.744 USD | 6.769.744 USD | 6.665.640 USD | 6.665.640 USD | 6.561.536 USD | ||||
| Terminal Value | |||||||||||
| NET CASH FLOWS | - 5.408.000 USD | - 5.092.000 USD | - 5.820.000 USD | 5.237.932 USD | 6.003.838 USD | 6.769.744 USD | 6.769.744 USD | 6.665.640 USD | 6.665.640 USD | 6.561.536 USD | 43.743.573 USD |
| CUMULATIVE CASH FLOWS | - 5.408.000 USD | - 10.500.000 USD | - 16.320.000 USD | - 11.082.068 USD | - 5.078.230 USD | 1.691.514 USD | 8.461.258 USD | 15.126.898 USD | 21.792.538 USD | 28.354.074 USD | 65.536.111 USD |
| discount rate | 0,15 | 0,14 | 0,13 | 0,12 | 0,11 | 0,11 | 0,11 | 0,11 | 0,11 | 0,11 | 0,11 |
| DISCOUNTED CASH FLOWS | - 5.408.000 USD | - 4.466.667 USD | - 4.557.914 USD | 3.728.257 USD | 3.954.914 USD | 4.017.514 USD | 3.619.382 USD | 3.210.562 USD | 2.892.398 USD | 2.565.067 USD | 17.100.446 USD |
| CUM. DIS. CASH FLOWS | - 5.408.000 USD | - 9.874.667 USD | - 14.432.580 USD | - 10.704.324 USD | - 6.749.410 USD | - 2.731.896 USD | 887.485 USD | 4.098.047 USD | 6.990.445 USD | 9.555.512 USD | 26.655.958 USD |
| TOTAL INVESTMENT | 14.432.580 USD | ||||||||||
| NPV | 24.090.891 USD | ||||||||||
| IRR | 0,28 | ||||||||||
| ROI | 1,67 | ||||||||||