The Importance of Hotel Industry Analyses

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The Importance of Hotel Industry Analyses

HTI Consulting is a leading hospitality consulting firm that undertakes a variety of analysis projects of the hotel industry throughout the African continent. The focus of a hotel industry analysis is to gain a more in-depth understanding of the performance and trends that are present within a particular hotel industry.

To date, we have undertaken more than 400 hotel industry analysis projects covering more than 44 African countries, which include market and financial feasibility studies, due diligence studies, operator selection projects, market-entry strategies, and various valuation and brokerage assignments.

The wealth of knowledge gathered when conducting analyses of different hotel industries has positioned us as one of the leading hospitality advisory firms on the continent. Our team at HTI Consulting consists of diverse people of various nationalities speaking many different languages. They are assets to our firm because, typically, when conducting an analysis on a hotel industry, the hospitality consultant will have to travel to the relevant location to gather primary research from tourism officials, hotel managers, developers, and investors, which is vital to the analysis process.

An analysis of a hotel industry includes research into both the supply and demand aspects. Assessing both sides of the market enables our consultants to fully understand the historical trends, current performance levels, and future outlook. With regards to the supply side of the analysis, the current supply of hotels is analysed to determine the number of quality rooms provided in the market and the various performance indicators (occupancy and Average Daily Rate) achieved by these hotels. Interviews with hotel managers and tourism authorities are conducted and a list of key demand generators driving growth and room-night demand within the market are identified. This is the start of the demand assessment of a hotel industry analysis. Interviews with current hotel users generating room-night demand within a market are important to determine the factors influencing hotel selection, the current volumes of demand, and the outlook with regards to drivers of growth-stimulating room-night demand in the future.

Assessing both the supply and demand side of a hotel industry is critical when conducting an analysis, as this forms the basis for a financial assessment into the viability of a new hotel development within the market. These analyses are therefore integral when investors or developers enter a new market or expand within an existing market.