Feasibility & investment
Hotel feasibility and investment advisory
A feasibility study is not a document that proves a project works. It is the cheapest place to discover that it does not. We build the one you can defend in an investment committee — and tell you when the answer is no.
The decision
The three questions this engagement answers
Will this asset earn its cost of capital?
Most feasibility studies answer a different question — whether the market is growing — and never bridge to the return the owner actually needs. We start from the required return and work backwards to the ADR, occupancy and exit cap rate that have to be true.
Is the land-use assumption right?
A hotel is usually one of several uses a plot can carry. We test hotel against serviced apartments, branded residences and mixed use before you spend on design, because the highest-and-best-use answer changes the building, not just the spreadsheet.
Where does the equity go, and when does it come back?
Development cost, pre-opening, working capital, debt drawdown and the exit are one cash-flow problem. Splitting them across four tabs is how owners end up surprised in year two.
Deliverables
What you get
- Market and demand analysis built from compset evidence, pipeline and seasonality — with the source and date of every input stated.
- A full development cash flow: land, hard and soft cost, pre-opening, working capital, debt drawdown, interest during construction, and exit.
- Returns stated four ways: unlevered IRR, levered IRR, NPV at your stated discount rate, and equity multiple — plus the exit value assumption and its cap rate.
- Debt sizing and covenant test: loan-to-cost, DSCR by year, and the minimum DSCR the lender will actually hold you to.
- Break-even occupancy and break-even ADR, so you know how much cushion the project has before it fails a covenant.
- Two-way and one-way sensitivity tables on the six inputs that move the answer most.
- A written red-flag list: the assumptions we would challenge if we were on the other side of the table.
| In scope | Not in scope |
|---|---|
| New build, conversion and repositioning cases | Statutory valuations and accredited appraisal certificates |
| Acquisition underwriting and bid support | Architectural design or engineering |
| Highest-and-best-use testing across hotel, residential and mixed use | Land title, zoning permits and legal due diligence |
| Debt capacity and covenant headroom | Audited market data subscription reports resold to you |
How it runs
Stages, timing and output
| Stage | Duration | Output |
|---|---|---|
| 1. Scoping call | 45 minutes | We agree the decision, the date it is needed, and what would make the study useful. If we are not the right party, we say so here. |
| 2. Evidence pack | Week 1 | Market, compset and pipeline evidence assembled and dated. You see the raw inputs, not only our conclusion. |
| 3. Model build | Weeks 2–3 | Cash flow, debt, returns and sensitivities built in the open. You get the model, not only a PDF. |
| 4. Challenge session | Week 4 | We present the answer and then attack it in front of you, so the weak points surface with us rather than with your lender. |
Fees
Fixed fee, agreed in writing before work starts.
Quoted after a scoping call, based on the asset, the number of counterparties and the evidence available. No hourly billing, no success fee, and no commission from any operator or brand. Smaller assignments have a separate fixed-fee product.
- Independent No operator commission, no referral fees, no brand relationship that pays us. The absence of that fee is why the advice can be blunt.
- Twenty years in the region Asset-level experience with hotel groups and investors, including business development and asset management roles in Saudi Arabia and the Gulf.
- Published method We publish our method, our HMA framework and our calculator — including the limits of each, not only the benefits.
Questions owners ask
Questions owners ask before engaging
How long does a hotel feasibility study take?
Four to six weeks for a single asset where the market evidence already exists; longer where a compset has to be built from scratch. We will not compress the evidence phase to hit a date, but we will tell you at scoping whether the date is realistic.
Do I get the financial model?
Yes — the live model, not just a PDF. You should be able to change an assumption and see the return move without paying us again. That is the point of it.
Will you tell me not to build?
Regularly. A study that always concludes ‘proceed’ is a sales document. When the numbers do not clear the hurdle we say what would have to change for them to clear it.
Is this the same as a bank valuation?
No. A valuation certifies a value for a lender at a point in time. A feasibility study tests whether a course of action creates value. You may need both; they are not substitutes.
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