Rates of Return on Hotel Investments

Fall/Winter 1992, Vol 17, No 2

Abstract: In an industry beset with problems, rates of return on hotel investments are extremely difficult to ascertain. Yet sales transactions involving hotels are in fact occurring, and most transactions are being financed, one way or another. While we believe that current hotel financing terms are ascertainable, we find that the equity market is highly fragmented; returns required by equity investors cover a broad range and depend upon numerous property-specific factors as discussed in this article.