Our client, a mortgage bank, had financed a resort. The hotel was developed by a developer and was operated by a well-known hotel company within the scope of a management contract. In the final phase of the project development, construction delays came about and sections of the facility were not finished by the opening date. The return on the capital service was in danger.
The client needed an assessment of what extent the hotel was market and competition-ready at that time and which measures, if necessary, were to be initiated in order secure the smooth operation of the hotel.
As an initial approach, the hotel was visited to inspect the entirely finished sections and those still under construction. Conversations with the management were conducted on-site. In addition, HOTOUR compared the hotel to the relevant competitors and evaluated the chances of success in its present state. The still outstanding work was evaluated and prioritised in view of the hotel´s need for a problem-free operation.
On the basis of that, an economic efficiency forecast was provided for the client in two scenarios that evaluated: A) the operation of the hotel at the status quo and B) the cash flow after the completion of all necessary work.
The client was able to weight the outstanding works according to priorities and release money to the investor in such a manner that was absolutely necessary for the smooth operation and with this, the servicing of the loan.