Valuation of Hotels in East Asia : A Comparative Study on Valuation Approaches

Though hotels are income properties, they are unique from the point that both of real estate and business management contribute to the value of properties. These characteristic affecting both risks and benefits associated with hostelry valuation could make hotel appraisal assignments particularly difficult. In this study, the peculiarities of valuing hotels are explored to shed some light on the current valuation perceptions, approaches, and tools for East Asian hotels. The analysis is based on information from different valuation approaches. Modified method of cost approach and income approach has been suggested significant for East Asian hotel industry environment through empirical analyses of hotel industry. This study is considered to be useful, for this is the very first analysis research into valuation of hotel industry in East Asia and suggests valuation approach. This research is focused on valuation of hotels of different levels. Especially, analysis of valuation of domestic hotel industries will offer usefulness to investment in hotel industries and management policy, at the very moment business management capability is urgently needed against the landing of multi-national hotel industries to East Asia.