Guest Lecturer #4 - Colliers
1. The management objectives focus driving the hotel’s income generating potential for its owners. Vincent implied three key objectives Colliers set for potential opportunities; how many number of rooms (80+), what services do the building provide for and a high quality condition report. Consequently, they structure their quantitative analysis around occupany rates, room rates per night and ancillary services per room. Running Yeilds were important in stabilising cashflows over the investment horizon. These are the quantitative meterics that drive the Hotel’s revenue base. Further Colliers targets 80+ room size pushing it into bigger scale projects where they can add value back into the investment. Vincent spoke
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Colliers’ investment process is a key indicator of the need to split building and equity returns. While their management services focus on building returns their sales and investment teams focus on equity returns for potential stakeholders. Their investment process begins with a market analysis and historical performance analysis. This is an area where building and equity returns are both analysed to give management and investors the ability to assess attractiveness of the opportunity. We then see a divergence and move to the next stage, benchmarking. This stage focuses on comparing the building returns over various time periods and to its competitors. Colliers then will develop trading projections to allow it to forecast future building returns and test this model rigorously. Financials and valuations make up the next stage of the process which is focused on implementing the forecasted building returns and incorporating the various capital funding requirements by investors. The main purpose hear is to analyse the equity returns of a project given the various investor preferences. Quantitatively speaking management looked to unlevered project IRR while investors looked to running yeilds and levered IRR to assess property …show more content…
The key theme driving their cashflow analysis was a detailed analysis of their income streams this has wide reaching implications in order for Colliers to meet their investment objectives. The breakdown of ancillary and core room offering is the pertinent example and drives their analysis by way of occupancy rates, ancillary services per room, rooms per night sold. These meterics allow management to anaylse what are the key areas that make-up revenue and through the value add process can focus efforts of driving particular areas of the business to maximise the owner’s return. This lends itself to the concept of splitting returns to match objectives of the investors. Further Colliers can ascertain what are the sensitive revenue streams to their bottom line, Colliers can then run a sensitivity analysis to really focus and outline to managent and investors alike the risky cashflows. An prudent suggestion would be to discount the different revenue streams are risk adjusted rates. The analysis facilitates a healthy anaylsis of risk vs return, the opportunity of future benefits with the risk that those benefits wont be realised. That is why an analysis of their revenue structure is so important in driving bottom line equity and building
In order to achieve its goal, the managers of Marriott have developed a financial strategy with 4 main decisions.
The 'Standard' of the 'Standard'. Combination of project cost forecasts with earned value management. Journal of Construction Engineering & Management, 958-966. Sitnikov, C. (2012). The 'Standard'.
This company specializes in all aspects of landscaping from construction to landscape to irrigation. The company can help you design and construct the best backyard you can imagine. While some companies handle one aspect of landscaping, this company can be trusted with all the details.
Answer of the question one will give overview progress, update of the primary asset. Financial and performance information needed as major part of the investment planning phase. The investment decision making is then determined by Question two, where the answer will provide in brief the levels of servi...
The hotel or hospitality industry relies on guests who visit their facilities. In order to understand and project revenues it is critical that operators in the industry know how to calculate revenues. On the other hand revenue management in any business not only in the hospitality industry is important. Considering the perishable nature of hotel rooms as the main product under sale, it is important to focus on customer satisfaction in order to increase revenues. Therefore, hotel yield or revenue management is about balancing the demand for hotel rooms and the capacity through proper forecasting in order to maximize effectiveness of resources.
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Fletchers started their business in the construction sector in 1909. Timber weatherboard house in Dunedin, New Zealand was their first project and they built it. They remain the leading construction company in New Zealand until 2001. In late 2001, they change their name The Fletcher Building Company on the stock exchange of New Zealand. Their main office is in Penrose, Auckland. They have near 20,000 employees working for them. They are dealing with mainly six different sections of construction work, heavy and light both building products, panels, and laminates distribution in New Zealand; they also distribute construction products in Australia and constructing the new big buildings there.
Campbell’s views and ideas are something that is spreading within the Hospitality Industry, because when you are aware of the “human factor” as he calls it, properties are able to increase their Revenue per available room (Revpar), and occupancy percentages, above what the software will predict.
For this assignment I have carried out a job study for the Hotel Management industry.
Fletcher building has opened in 1909 in Dunedin, New Zealand and they made a timber weatherboard house. It works in 40 countries and in New Zealand it is one of the biggest company.
One of the key areas of long-term decision-making that firms must tackle is that of investment - the need to commit funds by purchasing land, buildings, machinery, etc., in anticipation of being able to earn an income greater than the funds committed. In order to handle these decisions, firms have to make an assessment of the size of the outflows and inflows of funds, the lifespan of the investment, the degree of risk attached and the cost of obtaining funds.
... be on the facilities and services offered by the hotel to accommodate such persons such as the meeting rooms, conference rooms, ball rooms etc. while on the other hand, when aiming at the persons for a pleasurable visit then the marketer would more likely emphasize on the fun and exciting facilities that would interest them such as sports bar, tennis courts, treatment facility etc.
Brooke (1997), explains Estimation as the technical procedure of anticipating the value of the project. Building construction estimation is the process of acquiring the construction value for the whole project before the project starts. Thus, construction attaining process depends hugely on financial management to sustain workability and smooth operations. The delay in construction is a global issue which is due to improper preparation of estimates and lack of drawings (Ajanlekoko, 1987). In accordance to Gkritza (2008), the source of delay in a project are identified to be in the initial stages, like bad quantification, errors in design and ground conditions. Thus, the purpose of a proper estimate is to foretell the cost needed to finish the
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
The US alone with its world’s largest hotels/market has recorded net value growth, while China has literally doubled the revenue in the same time span. The leisure segment was the industry's most lucrative in 2014, with total revenues of $509.3bn, equivalent to 75.2% of the industry's overall value. The business segment contributed revenues of $167.8bn in 2014, equating to 24.8% of the industry's aggregate value (Global Hotels & Motels 7). The industry’s performance is strong and from 2014-2019 a drive to boost the total value is expected, with the PEST (LE) framework being used to scan the industry’s external macro environment.