Hotel Case-Study in VAL
- Log into VAL
On the “Properties” file manager screen, click “New Property”.
On the “Welcome” screen, after you give the Property a name, select “Lodging” from the drop-down list for “Property Type”. Enter “178” for “Total Rooms”. You have the option of adding the address fields. Once finished completing, click “Create”.
Build your model. Here are the assumptions:
Helpful Hint: By default, VAL sets Total Available Rooms equal to Total Rooms. For Room Revenue calculations, VAL uses Total Available Rooms. For Valuation/Room calculations, VAL uses Total Rooms. The primary use case for a different set of Total Available Rooms versus Total Rooms is in the case where Rooms may be offline due to a PIP or otherwise unavailable.
Helpful Hint 1: Every model requires a Baseline Room Revenue set. Create additional Room Revenue sets by clicking “Add” in the upper right corner of the screen. In this example, we are running two additional scenarios using 100% Penetration Rate and 90% Penetration Rate for Occupancy and ADR respectively. Change the UoM to “% of Market to refence Market Competition sets. First, you need to create Market Competition set. See Market Competition section below on the assumptions.
Helpful Hint 2: In VAL, you can create static occupancy % and ADRs or click the pencil icon to enter varying annual inputs or varying monthly inputs to address seasonality trends.
Helpful Hint: Create as many Market Competition sets as you would like and reference them on the My Property tab. Also, you can apply unique growth rate assumptions to the Market Competition.
Helpful Hint 1: Every VAL model has a Rooms Expense line item. All other revenue and expense line items are user-defined by typing in the Description field. To add a new revenue or expense, click the “Add” button in the upper right hand corner but before you do that, use the drop-down list next to it to select the appropriate revenue or expense type e.g. Department Revenue, Departmental Expense, Undistributed Operating Expense, etc. Note, you can always change the “Type” by clicking on the down arrow in the “Type” field for each entry.
Helpful Hint 2: After you’ve created a Departmental Revenue line item, hover over that row and “right-click” with your mouse and select “Clone as Dept Exp” to create the corresponding Departmental Expense.
Helpful Hint 3: VAL supports all of the customary hospitality Units of Measure (“UoM”) e.g. POR (“Per Occupied Room”), PAR (“Per Available Room”), % of Total Revenue, % of Room Revenue, $ Amount, $/Area and % of Line.
Helpful Hint 1: VAL provides eight (8) pre-canned growth rates. Add as many growth rates as you need by clicking the “Add Rate” button in the upper right-hand corner. Each growth rate can vary or reference the General Growth Rate to avoid unnecessary data entry.
Helpful Hint 1: VAL allows you to enter as many valuations as you want. To add an additional valuation, click the “Add Valuation” button in the upper right-hand corner. The valuation methods available are Direct Cap, DCF, Room Revenue Multiplier or simple Direct Entry.
Helpful Hint 2: The NOI to Cap default setting is set to cap NOI less FF&E.