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In hotel crowdfunding, location is paramount. Let’s explore why and what investors should consider:

  1. Tourist Appeal
  • Proximity to attractions: Within 5 miles of major sites increases occupancy by up to 30%
  • Scenic locations: Hotels with ocean views command 20-40% higher rates
  • Business districts: Corporate travellers often prefer hotels within 1 mile of their destination Key stat: Hotels near popular attractions see 25% higher annual revenue on average
  1. Accessibility
  • Airport proximity: Hotels within 3 miles of airports see 15% higher occupancy rates
  • Public transportation: Properties within 0.5 miles of subway stations report 10% more bookings Tip: Use tools like Walk Score to assess a location’s accessibility
  1. Local Economy
  • Job growth: Areas with 3%+ annual job growth tend to see increased hotel demand
  • Business developments: New corporate headquarters can boost hotel occupancy by 5-10% Insight: Review economic development plans for the next 5-10 years
  1. Competition
  • Market saturation: Ideal markets have occupancy rates above 65% with limited new supply
  • Unique selling points: Identify gaps in local offerings (e.g., boutique hotels, extended stay) Strategy: Conduct a SWOT analysis of competing properties within a 2-mile radius
  1. Future Development
  • Infrastructure projects: New convention centres can increase local hotel demand by 20-30%
  • Gentrification: Early-stage gentrifying areas can offer high growth potential Warning: Be cautious of overreliance on single, large-scale projects
  1. Seasonality
  • Peak vs. off-peak: Some locations see 70% of annual revenue in just 3-4 months
  • Year-round strategies: Successful hotels often have plans to maintain 50%+ occupancy in the off-season. Tip: Look for diverse demand drivers to mitigate seasonality risks
  1. Safety and Stability
  • Crime rates: Areas with crime rates 20% below the national average are ideal
  • Political stability: International investments should focus on countries with stable governments Risk assessment: Consider natural disaster frequency and severity
  1. Local Regulations
  • Zoning laws: Ensure the property is zoned for hotel use with room for potential expansion
  • Tax structures: Some areas offer tax incentives for hotel developments, potentially saving 15-20% on operational costs Expert advice: Consult with local real estate attorneys for regulatory insights
  1. Cultural Fit
  • Local integration: Hotels that embrace local culture see 10-15% higher guest satisfaction scores
  • Community support: Projects with strong local backing face fewer obstacles and delays Approach: Engage with local community leaders and tourism boards
  1. Return on Investment Potential
  • Property value trends: Look for areas with 3-5% annual property value increases
  • Occupancy rates: Aim for markets with average occupancy rates above 70%
  • ADR (Average Daily Rate): Target locations where ADR has grown by at least 2-3% annually over the past 5 years

Key Takeaway: While a prime location doesn’t guarantee success, it significantly increases the odds. A thorough location analysis can be the difference between a thriving investment and a struggling one.

Action step: Before investing, create a detailed location scorecard based on these factors, weighting each according to its importance for the specific project.


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