Module Introduction: Perform a Hotel Market Study

The critical first step in performing a hotel valuation is conducting a market

study. This provides the basis for estimating hotel occupancy and hotel
average daily rates, the essential first steps in forecasting revenue and
expenses. In making these calculations, we use a sophisticated Excel-based
tool, the RNAADR program.

In this module, you will evaluate the key competitive factors of the market
study, including the occupancy, average daily rate (ADR), and the market
segmentation for all hotels in a given market over the analysis period. To perform the market
study, you will estimate the total demand in a market, including latent demand that results
from the construction of new properties or new demand generators in a market. Using the
RNAADR program, you will evaluate the relative competitiveness of all hotels, exploring the
concepts of fair share, market share, and market penetration. Finally, using a case study of a
fictitious hotel, you will determine the market occupancy and ADR rates, which will then be
used to forecast revenues and expenses later in the course.

Note: Because of the large amount of data required to forecast occupancy and ADR, the
majority of the data entry and analysis in the course occurs in this module. Then, we will use
this data to forecast revenues and expenses to produce the hotel valuation.