A Reexamination of Current Hotel Valuation Techniques – Which Approach is More Realistic? [Summary]
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This study revisits the issue of accuracy in contemporary hotel valuation. The valuation results are compared to the market values of these firms to assess which technique provides the most robust and supportable estimate. Research results reveal that, at least for the analyzed sample, the discounted cash flow (DCF) technique provides the most realistic estimate of a hotel firm’s value. Results also show that the valuation estimate of AVM is significantly different from both Band of Investment methods. As such, the process of valuing hotel properties is better understood.