Case Studies

London Hotel Due Diligence

Grow Revenue & Profitability Case Study:

London Hotel Due Diligence

The Challenge

  • The owner was in the due diligence period of a hotel purchase in London and wanted specifics on the revenue upside.
  • There was also a comprehensive renovation plan proposed, and feedback was requested on the design and other ideas from a sales and marketing lens.
  • The location of the hotel was in an up-and-coming area of London, which needed to be factored into the five year proforma while the location was becoming more popular. The market segmentation would also shift.

The Solution

  1. Analyzed the sales team, including sales leadership, to determine if they were up to the challenge of re-branding and re-positioning the hotel before, during, and after renovations.
  2. Comprehensive market research of the area from the competitive set (to understand who their customers are and why they choose to stay there) to surrounding companies. This diagnostic was the foundation of the new market segmentation.
  3. Developed a detailed revenue budget (by month and market segment with ADR and occupancy) for pre-, during-, and post-renovation. A sales and marketing expense document was prepared to ensure the right amount of resources to support the increase in revenue.

The Impact

As a subject matter expert, reviewing all angles of revenue opportunities meant the potential purchaser was able to determine the revenue upside and the expense necessary to achieve those results. The potential purchaser was able to use this information to establish financing for the project.