Price Ranger(r) Offers a Fast and Inexpensive Way to Obtain Current Price Ranges for U.S. Hotels.
Atlanta, GA. November 16, 2001. The Hospitality Research Group, the
research affiliate of PKF Consulting, announced the launch of a service to help hotel lenders, sellers, buyers, and investors determine the most effective price for at which to sell a hotel. The new product, dubbed Price Ranger, determines a price for a hotel based on sale prices of comparable properties, according Dr. Jack Corgel, Director of Applied Research for Atlanta-based The Hospitality Research Group (HRG).
HRG developed Price Ranger as a unique automated valuation model that selects comparable hotel sales from the Firm's database and adjusts them for time and area differences. The result is a report containing ranges of prices for single hotels, hotel brands, or areas of the U.S., plus details about four (4) comparable sales.
Price Ranger fills an important need for anyone interested in following the paths of hotel property prices, Dr. Corgel says.
These would include not only hotel buyers and sellers, owners and investors, he explains, but also lenders, developers, brokers, analysts, consultants, and appraisers, even tax assessors, and insurance underwriters.
Hotel sale price ranges are determined by means of the large database of hotel property transactions that HRG maintains. This database includes thousands of hotel property sales over the past few years.
Once the customer identifies either the property, market segment, or geographic market for which a price range is needed, along with specific search criteria (for example, only properties sold in the Northeast U.S.), HRG analysts execute searches to create a list of comparable sales. Customers then choose up to four (4) sales from the list. A range of prices is reported from the actual sales prices, and these are adjusted for time and area differences to help customers narrow the range.
The adjustments for time and area differences are a crucial part of the pricing process, since comparable sales often occur in a prior year or in areas at some distance from the subject properties, says Dr. Corgel.
According to HRG, Price Ranger is designed to assist those who
* Monitor large property and loan portfolios for hotel real estate price changes
* Have owned hotels for several years and will benefit from time adjustments from the initial purchase price
* Want to investigate the potential for hotel development, refinancing, or loan approval
* Perform due diligence for hotel acquisitions
* Appeal (or defend against appeal of) property tax assessments
* Review hotel appraisals
* Track movements of hotel property prices in geographic areas and hotel market segments
According to Joe Green, CFO of Winston Hotels, Both profits and real estate price appreciation from hotel properties must be measured to judge performance. We know how much income and expenses are generated, but have a difficult time quickly and inexpensively estimating how property prices changed during the year. It's good to know that this product is available.
Further information on Price Ranger reports can be obtained from HRG by calling toll-free 888-999-9714 ex. 237.
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