Our Customer is the investor
Lunasole Hospitality was founded to help developers and owners of hospitality projects increase their returns on investment.
During the lifecycle of an asset, owners rely on many partners whose interests do not fully align with their own. Appointing an independent advisor is essential to preserve the investor’s interests.
CLOSING THE ROI GAP
Hotel projects often miss their target return on investment. Besides too much optimism in market projections, the most common causes are:
- Excessive investment in non-commercial and low-return areas
- Weak project management during the development phase
- Poorly negotiated agreements with the brand and the operator
- Mediocre performance by the operator
The two main phases in the lifecycle of a hospitality asset are:
- Planning and development
- Commercial operations
Ideally, a hotel is developed from the beginning with a strong value mindset. It helps avoid excessive investment into non-commercial (back-of-the-house) and low-return commercial areas. A value mindset also ensures that value-engineering exercises do not harm the future revenue generation capability of the asset. It also decreases the need for costly changes during the construction period which lead to budget overruns, delays and liability dilution.
However, even after a hotel has been built and opened, during the commercial operations phase, many actions can be taken to improve the return on investment and increase its value.