The Role of Brand Affiliation in Hotel Market Value

Abstract

The notion that a hotel’s brand contributes significantly to the property’s market value is supported by an analysis of nearly eleven hundred hotel transactions over the past fifteen years. The analysis found that brands added value beyond the usual contributors to a property’s value, such as net operating income and revenue per available room. The effects of branding were most noticeable in midmarket and upscale hotels. Based on per-room sales statistics, certain brands added significantly more value to their franchisees’ properties than others.