The recently opened Tru by Hilton in Criciúm , Brazil
INVESTMENT
The no-fuss efficiencies of limitedservice
HIGHER NET OPERATING INCOME EQUALS A BETTER ROI AS BOTH AN ONGOING BUSINESS AND AS A LIMITED-SERVICE PROPERTY READY FOR DISPOSITION AT THE END OF AN ECONOMIC CYCLE .
Contributed by BURTON BROOKS , MUMFORD COMPANY
From the land it stands upon to the guest that crosses its doors , limited-service hotels provide the most efficient return on investment in the lodging space . This has remained true , and this segment continues to provide impressive returns during upcycles and muted diminished returns during challenging economic times . Limited-service hotels provide a return on investment by generating cash flow through operations and executing an exit strategy upon the disposition of the asset .
Limited-service hotels enable any size business operator to operate successfully in this space of the lodging industry . There are many different types of owners in this space , including single asset owners that operate all the way up to publicly traded REITs and institutional investors . These groups have all capitalized on the opportunity to focus on this segment with limited rooms to fill , limited complexity , limited square feet to manage , limited staff , and , of course , limited volatility . There is a lot of consumer demand for limitedservice products . It is easier to renovate and convert , has consistent operations , is adaptable to change , and appeals to both lenders and prospective investors .
Limited-service hotels generally have a small footprint for new construction . In many cases , the site size ranges can be as small as one