V = # of rooms X $100,000 X price of coke in room

[Anonymous]

Researching infor on hotel valuation and the authors came up with technique #7:

Value = Number of rooms X $100,000 X price of coke/pepsi in the hall machine or in the bar.

bizzare at least, but next hotel I go to, Ill try it!!

V = 50 rms x 100,000 x 1.50

V = $7,500,000.00

 

[Anonymous]

Don't know but in the past year I have had to stay at a Renassance and a Hilton, and have stayed at Super8 and Economy Lodge. The high dollar hotels have the crappiest and smallest TV's with about 6 channels - not even the weather channel at the Renassance Houston charged $8 a day to park your own car, whose floors were thread bare, lumpy beds, a $200/night flop house in my book.....The cheapie hotels (Albuquerque and Carlsbad, NM) had 30-40 channels, free HBO, and they were actually CLEAN. So the value may be inversely proportional to the # of channels on the TV.
ps- Cokes in Ren. was $1 in machine and 65 cents in the gift shop.

 

[Anonymous]

Maybe the formula could be rooms x free tv channels x 100,000 divided by the available premium channels, or the average temperture of the pool squared. makes just as much sense.

 

[Paul Ness MAI]

I saw that formula too, written by Steve Rushmore. At first I thought it was a joke. A long time ago one of my AI course instructors said the NNN rental rate for light industrial space in any town was equal to the price of a drink at the local hotel bar. Now that WAS a joke.

 

[Austin]

Sounds like the algorithm for some AVM's I have seen. Based on the same theory too.

 

[Fred]

In the 80's, you could find the cap rate by moving the decimal point in the gallon price of gasoline. $1.20 gas = 12% cap, $0.80 gas = 8% cap.