HOTEL INVESTMENT - 2020/1

Module Overview

Focuses on real estate financing for hotel projects through development, franchise and acquisition financing. Lectures will cover the financial returns to the owner, lender, and management company in the lodging investment. Will measure rates of return for owner, lender and manager, purposes of feasibility, valuation, debt and equity financing structures such as joint ventures, management contracts, franchise agreements, operations analysis, & leases. Emphasis will also be placed on the strategic transaction process such as investment underwriting, portfolio management, acquisitions, dispositions, and bankruptcy as well as asset management functions.

Module provider

Hospitality, Tourism & Events Management

Module Leader

GANBERT Sylvia (Hosp & Tour)

Number of Credits: 15

ECTS Credits: 7.5

Framework: FHEQ Level 7

Module cap (Maximum number of students): N/A

Module Availability

Semester 2

Prerequisites / Co-requisites

none

Module content

Indicative content includes:

Intermediate to advanced hotel investment and financial analysis skills Introduction to real estate finance related to the hotel asset class sector

Hotel transaction analysis related to acquisition, development, asset management, dispositions, & bankruptcy

Hotel Asset Valuation – DCF, Sales Approach, Cost Approach Hotel Development – Feasibility studies, construction financing

Hotel investment/financial returns as well as benchmarking analysis

Hotel Management and Franchise Agreement Analysis Hotel Financing and Lending Capital Structuring – Debt, Equity within the capital stack

Assessment pattern

Alternative Assessment

Individual Assignment (2,500 words) for resit

Assessment Strategy

The assessment strategy is designed to provide students with the opportunity to demonstrate a number of learning outcomes that are directly related to the topics delivered in various weeks. The assessments are designed to capture learning in all the topics covered in this module.

Thus, the summative assessment for this module consists of:

The group assignment will use the tools and techniques learned in this module to analyse a hotel transaction (i.e. development, acquisition, and disposition) that is hypothetical whereby the role of an owner, a lender, and management company must be carefully analysed and presented. Transaction data will be provided by instructor. For this purpose students should form groups of 4-6 students. Each group must present in class as well as a written assignment, no later than the tenth week of class. Each group will also be responsible for reading, understanding and reflecting on the various articles, case studies in the classroom. In the case of an alternative assessment being necessary, individual students will be provided with an alternative data set and be expected to carry out a similar set of analyses.The report from this will be up to 2000 words.

The individual assignment will again be asked to evaluate a transaction provided by the instructor whereby the role of the owner, lender and management company should be analysed but also discuss the upside and downside risks and rewards of the transaction through strategic and critical thinking. Use of transactional data may go as far back as 5-7 years. The transaction and data for the individual assignment will be provided by the instructor. Once again this will assess the students abilities in various theoretical, strategic and advanced calculations based competencies in hotel investment and financial analysis.

Formative assessment and feedback

Verbal and written feedback on group presentations Written feedback on group reports 4 scheduled group tutorials Facilitation and feedback from the teaching team

Module aims

• This module aims to enhance students' understandings of hotel Investment concepts and theories
• The module also will allow students to learn contemporary hotel; financial analysis techniques/models. The student will be engaged in hotel appraisal techniques as well as understand the rationale behind hotel development, acquisition, dispositions. The student will be engaged in the various types of management and franchise agreements utilised in the hotel industry and learn the important role of the hotel asset manager.To pass this module the student will demonstrate a familiarity of business finance (corporate finance). The student should display some understanding of the relevant issues and some familiarity with the relevant theories and techniques.
• provide students with understanding of hotel investment and finance concepts and theories.
• earn market based financial analysis, strategy, techniques, models and transactions. The student will be engaged in hotel valuation, and financial analysis techniques as well as understanding the various transaction in the industry which impacts the owner, lender and
  help understanding of some of hotel investment and finance vocabulary, including terms such as NOI, Mgmt/Franchise Fees, IRR, NPV, Cap Rates, DCF, EBITDA, LTV, Yield, LIBOR+spread, ROI, and ROE.
• To pass this module the student will demonstrate a familiarity with hotel investment and finance, The student should display some understanding of the relevant issues and some familiarity with the relevant theories and techniques such as the P&L, financial statements, financial ratios and transactions.

Learning outcomes

Methods of Teaching / Learning

The learning and teaching strategy is developed in this module to facilitate active learning and to support students in achieving the learning outcomes.

The learning and teaching methods include:

Weekly one two-hour lecture incorporating class-room participation for better understanding.

Weekly one-hour tutorial sessions for solving problems to understand the contents covered in lectures.

The tutorials cover worked examples which are an integral part of the module. Tutor will provide the necessary support during these sessions for deeper understanding practical examples, articles, case studies and long problem solutions.

SurreyLearn discussion forums to address any issues related to the content, learning and teaching environment, and delivery of the module and/or specific topics. SurreyLearn will be used for delivering optional mock MCQ examinations as well as case studies thereby giving the participants an opportunity to get formative feedback. Utilizing SurreyLearn as the main pool of resources including lecture handouts, tutorial problems, mock exercises, articles, case studies, and discussions. Besides using SurreyLearn as the main means of communication to establish resource efficiency and communicational effectiveness. Weekly office hours provided by lecturers. Support of lecture material by directed reading and exercises selected.

Indicated Lecture Hours (which may also include seminars, tutorials, workshops and other contact time) are approximate and may include in-class tests where one or more of these are an assessment on the module. In-class tests are scheduled/organised separately to taught content and will be published on to student personal timetables, where they apply to taken modules, as soon as they are finalised by central administration. This will usually be after the initial publication of the teaching timetable for the relevant semester.

Reading list

https://readinglists.surrey.ac.uk
Upon accessing the reading list, please search for the module using the module code: MANM421

Programmes this module appears in

Please note that the information detailed within this record is accurate at the time of publishing and may be subject to change. This record contains information for the most up to date version of the programme / module for the 2020/1 academic year.