Hotel investment 2014: finance on a different level
The financial crisis has given birth to a superior environment for hotel finance. Lenders learning from past mistakes have undergone significant changes and are ramping up their levels of sophistication to better understand hotel businesses. Drawing on interviews with banks, private equity houses, advisers and hoteliers, the report calls for hotel businesses to address the way they deal with lenders and investors if they are to raise money in the new environment.
The report identifies five key elements needed for a robust proposal capable of attracting funding and financing growth:
- an experienced and incentivised management team
- a compelling equity story which demonstrates the commitment of existing investors
- a business plan containing detailed projections which also demonstrates tight cost control
- a marketing strategy articulating clear target markets and how channels will deliver to these markets
- a strong brand that resonates and creates loyalty with target markets.
To succeed in this new age of lender and investor sophistication, hoteliers and hotel groups must move to another level.