Independent Hospitality

If your feasibility study’s financial analysis doesn’t reflect the financing environment you’ll actually be borrowing into, it’s modeling a market that doesn’t exist. Construction costs have “pushed past $300,000 per room” and lenders now favor experienced developers. 

Levers to improve NOI include revenue-aligned staffing, twice-yearly vendor contract renegotiation, energy-efficiency upgrades (HVAC, lighting), and tech-enabled automation — while flagging training and preventive maintenance as investments that should “never be deferred.” 

Experts rely on financial statements, contracts, leases, development agreements, franchise agreements, and management contracts to assess compliance and operational disputes. Learn more about litigation support.

Key risks before acquiring a hotel include deferred maintenance, structural deficiencies, and outdated systems or layouts. With post-acquisition capex often running $2–4 million post-acquisition just to remain competitive. Consider building vs buying in San Diego.

Don’t pick a brand for prestige. Weigh it against market visibility and competition, financing requirements, performance benchmarking, operational fit, and exit strategy, since a brand is only worth it if it clears that bar.

Then price it out: baseline fees run about 8–10% of room revenue (royalty 4–6%, marketing 2–3%, reservations ~2%), climbing past 11.5% once premium additions like loyalty program fees are added. Make sure that spend is buying enough incremental bookings and rate lift to justify it before you sign.

The financial analysis must include stress testing scenarios that examine what happens if occupancy drops 10%, what happens if rates flatten for 24 months. Conservative underwriting protects capital. Aggressive projections protect egos. One builds wealth. The other destroys it. See the hotel feasibility guide.