Buyer Advisory Services - Cayuga Hospitality Consultants

Our Services / Acquisitions, Owner Services & Development / Buyer Advisory Services

Cayuga Hospitality Consultants have decades of experience in leadership roles in virtually all segments of the hospitality industry including:

Asset management
Hotel investment advisory (see below)
Property evaluation (see below)
Advising on acquisitions and dispositions
Site/location analysis
Design and architecture

Hotel Investment Advisory Consulting

Our professionals have a deep understanding of the issues that owners, financial institutions, and operators are facing. Whether you are seeking to invest in a single property or a multi-unit acquisition, our professionals are able to:

Provide hotel evaluations
Make recommendations on the market and location
Review current branding and offer solutions for hotel brand conversion
Advise up-branding or repositioning
Assist with franchise negotiations and contract review work with land planners, architects and designers
And evaluate hotel management company performance with recommendations for improvement or alternatives

Hotel Property Evaluation Consulting

When you evaluate whether to buy a project, rigorous due diligence is required. Our asset experts are fiscally and strategically focused.

Even if you have no understanding of how to evaluate the purchase of a hotel project, our consultants are able to help you with:

Analyzing opportunities for hotel revenue enhancement and maximizing returns
Preparing property condition reports
CapEx/PIP reviews and plans for replacement and renovations
Project management
Financial forecasting and revenue optimization
Procurement, GPO, and vendor evaluations
Assistance with closing due diligence and hotel opinions of value
Trusted guidance from our advisors

How to buy a distressed hotel?

There are several operating costs to consider when buying a hotel.The distressed hotel deal: a property that is generally well-located, in good condition, well-managed, and expertly marketed that was over-financed and cannot meet its debt service requirements. While the tsunami of distressed properties that some expected may not develop, more high-leverage CMBS loans are coming due and lenders are becoming more aggressive about foreclosure, so more “distressed hotels” will become available. Prices will be well below replacement, cost and cap rates higher. The challenge is choosing the deal with the most significant upside potential and offering the best return.

Five steps to identify and buy a distressed hotel

Examine the Market for Distressed Hotel
Review the property and its historical performance
Perform an expert property condition assessment
Identify revenue opportunities and net operating income
Create a financial model

Questions to Ask When Buying a Hotel

How much does it cost to own a hotel?

There are several operating costs to consider when buying a hotel. The beginning stages of purchasing a hotel in the United States averages around $25,000,000. Luxury hotels are much higher priced. Staffing and utilities must also be considered. Maintenance fees are also an ongoing expense while running a hotel. All of these expenses could keep you from turning a profit for years if you are not ready for them.

How much does it cost to own a hotel franchise?

Starting a hotel franchise can be more costly than owning your own hotel brand. On top of normal hotel expenses mentioned above, you will also pay franchise fees. These can include initial franchise fees, ongoing franchise fees such as royalty fees, and advertising fees. Initial franchise fees average in the hundreds of thousands of dollars. Ongoing franchise costs vary widely. It is important to be aware of these costs before considering a hotel franchise.

Can I secure financing for a hotel?

Depending on your experience with operating a hotel, you may need an asset management company to manage your hotel before you can secure financing. Financing fees can add up so be mindful of these when considering how long it will take your hotel to become profitable.

How much is a down payment for purchasing a hotel?

In order to buy a hotel, you will need at least 20% of the purchase price. This percentage is similar to other real estate down payments, such as buying a home for example.

Is the hotel property complaint and up to code?

Compliance and being up to code are very important. The last thing you want to have happen after opening a new hotel is to have it be shut down while you prepare for inspections.