AHS Advisory specialises in hotel market research, supply and demand analysis, hotel asset management, strategic advice and related professional services in the hospitality sector.
We have a combined 60+ years of hands-on personal experience in the industry, in hotel operations, hotel corporate management, ownership and asset management, food & beverage operations, the tour & travel industry and of course hotel consultancy.
This provides us with a unique and diversified understanding of the dynamics of the hotel industry, allowing us to provide our clients with not just theoretical but also practical services and advice.
The Asset Lifecycle
We work with hospitality asset owners, operators, developers, investors and financiers, providing comprehensive market analysis and forecasts which form the bases for concept development, performance analysis and projections, feasibility studies, due diligence and value assessments.
We have structured our services around the typical Asset Lifecycle, commencing with the gathering and interpretation of market knowledge; the conceptualisation and development of the property; operations; and finally services related to asset disposal.
Market research is fundamental to all our services. Only on the basis of thoroughly researched and analysed information can informed decisions be made. We maintain ongoing records of hotel market performance and monitor the ongoing changes in accommodation supply, as hotels are being conceived, developed, (re)branded and transacted. We apply rigorous and sophisticated modelling techniques to analyse and interpret market information.
Supply & Demand Analysis
Our basic research deliverable, a Market Review, provides an overview of a competitive market environment, assessing existing supply, business mix and historic room occupancy and average room rate performance. This would provide the required background information for an initial development opportunity assessment, for example.
A Market Outlook Report builds on our Market Review and provides an assessment of anticipated future market occupancy and average room rate performance. This report can be useful for the in-house preparation of budgets, an advanced development opportunity evaluation, or to support transaction documentation.
Forecasts & Projections
A Market Demand Study provides projected future market-wide trading projections for a specific property, providing the cornerstone for budget preparations, future cash flow projections, transaction due diligence or a (re)development assessment.
Do not believe in build and they will come. The better approach is to identify and confirm the market opportunity, and then create the product that best satisfies that demand. The conceptualisation of a new accommodation property is a complex and highly involved process, as there are no such things as standard rules and approaches. Every market is different, and within a given market the location of the proposed development can make or break the development opportunity.
Based on our knowledge and analysis of hotel markets, competitive supply, demand sources, accommodation preferences, local transport systems and infrastructure, and any anticipated changes to all of the above, we can prepare a Site Assessment with detailed commentary on the suitability of a site for the development of accommodation product.
Based on our assessment of a development site we can complete a Concept Review based on a suggested development concept and/or prepare Concept Recommendations with regards to the type of product , scale , standard , amenities and facilities such as food & beverage, conferencing and leisure facilities, and proposed services.
The final step in assessing the development opportunity is the completion of full projections of cash flow from operations. The Market Feasibility Study could form the basis for an assessment of the property’s worth on opening, based on a discounted cash flow (DCF) analysis, or a Financial Feasibility assessment, based on a Internal Rate of Return (IRR) calculation against independently prepared development cost estimates.
You’ve spent blood, sweat and tears, and a lot of money, on developing or buying your perfect accommodation property, and then you have to hand it over to a hotel operator. First, you have to find one; then you have to make sure the appointed operator actually performs as promised, and in accordance with your expectations. And what if things don’t go to plan? How can you tell, and more importantly, how do you fix it?
Operator Search & Selection
Rule One: you should be looking for the best operator, not the cheapest one. But how do you know? We have been working with and for hotel operators for a long time: we know their brands, their management styles, their strengths and weaknesses, and often also the people behind the company.
Performance is measured against the budget, but is the budget reasonable? How is the property performing against comparable hotels and, more importantly, its direct competitors? Is it achieving the appropriate market penetration, and average room rate performance?
If the findings from a Performance Review are not satisfactory, it’s time for a more detailed analysis. Are room rates high enough, or maybe too high and is occupancy suffering? Is the hotel targeting the right market segments, or should it change its sales & marketing strategy?
A typical hotel has only a single operational use: to provide transient accommodation services. That operation is far more complex and volatile than, say, managing a retail complex or office tower. To manage your asset well, maintain its competitiveness in the marketplace, enhance the asset value of the building and prepare the property and the business conducted therein for a future sale, you need to understand both the competitive market as well as the operator’s intents and objectives.
Hotel Asset Management aims to protect the asset and maximise the return on investment for the owner, through the optimisation of both operating returns and investment returns. The Asset Manager acts as the Owner’s Representative to insure that a hotel is acquired for a reasonable price; is then operated properly during the period of ownership; and ultimately is disposed of at an appropriate time and price.
Due Diligence needs to be undertaken by both the buyer and the seller of a property. Because the value of an accommodation property is driven by the potential of its operations as a going concern, in preparation for a hotel transaction three main areas need to be investigated: a Property Inspection, historic Performance Analysis and a Competitive Market Outlook.
Unless you need a formal valuation, we can assist you with a more practical and insightful assessment of the Property Worth, as a benchmark for a transaction, as a guide to prepare an offer, or to support your negotiations. We can also assist in determining the potential for a property upon acquisition, through refurbishment, renovations, repositioning, rebranding, extension or complete redevelopment.