Evaluating Current Techniques in China Stated-Owned Hotel Valuation:A case study

• Main Authors: Chia-chang Shen, 沈家昌
• Other Authors: Ming-hsiang Chen
• Format: Others
• Language: en_US
• Online Access: http://ndltd.ncl.edu.tw/handle/26718153971985072889

碩士 === 國立中正大學 === 財務金融所 === 95 === Abstract This case study examines the value of state-owned hotels in China by using seven hotel-valuation techniques provided by Rushmore (1992). The seven techniques include technique 1 (one stabilized year), technique 2 (three year buildup), technique 3 (ten year discounted cash flow), technique 4 (ten year DCF with overall discount rate), technique 5 (the sales comparison approach), technique 6 (the market-derived capitalization rate) and technique 7 (room-rate multiplier). Techniques 1-4 are classified as the income capitalization approach. Technique 5 is a sales comparison approach. Technique 6 is a hybrid approach, a combination of both the income capitalization and sales comparison approaches. Technique 7 is a well-known rule of thumb in the lodging industry. In this study, we investigated the strengths and weaknesses of seven current valuation techniques for hotel appraisals in China. Empirical results of this study can be used as valuable information for investors and appraiser to estimate the hotel value in China.