Hoteliers and lenders depend on appraisers to decode the most intimate variables that affect a property’s value, but it also helps to focus on the big picture: What type of hotel do you want to run?
By Chris Elder, Senior Project Manager
The most distinguishing feature of a full-service hotel is the abundant provision of food and beverage services suitable for both guests and groups. Full-service hotels, unlike hotels in other segments, typically play a significant role in servicing the meeting and special events needs in their market area. Therefore, on-site restaurants, lounges, and group meeting spaces with banquet facilities are the cornerstones of the full-service offering. Furthermore, selective amenities such as spas, elaborate banquet rooms, doormen, valet parking, extended room service, concierge services, and high-end restaurants and boutiques distinguish many full-service properties.
These multiple services and amenities come at a higher operational cost for the full-service hotel, but they also help the hotel capture more selective demand and command a higher average rate. Groups requiring meeting space are a significant source of business for full-service properties, as are business travelers willing to pay the higher room rates generally charged at these hotels. Leisure and vacation travelers, especially at the upscale and luxury levels, are also a significant market for many full-service hotels. In all cases, full-service hotel guests seek the extra amenities and service levels found only at these properties.
Patronage of upscale and luxury hotels has come under fire since the recession took hold in late 2008, especially with respect to corporate meetings and travel, which have been criticized in some cases as too extravagant amid the economic woes. Some limited- and select-service brands have reported an influx of travelers who normally stay at full-service properties, but for reasons of budget or appearance have begun to choose hotels with fewer amenities. The food and beverage operations and large meeting venues that are unique to full-service hotels, however, should continue to draw demand, and this demand is expected to continue to grow once the economy rebounds.
Examples of full-service hotel brands include:
Regent Hotels & Resorts
Preferred Hotels & Resorts
Knowing where a hotel property fits into the scheme of things is crucial for owners, operators, and lenders alike. As professional hotel consultants and appraisers, we work to stay keenly aware of how demand segments, market conditions, and competitive supply affect valuations of different property types. Please contact us to learn how we can help your hotel succeed.