Hospitality Experience
Sydney Airport Hotel Due Diligence
We prepared an independent review and assessment of the operational aspects of the hotel; together with a review and assessment of the prevailing hotel management agreement (HMA) with the hotel operator, and a review and assessment of the capital expenditure (CAPEX) status and potential requirements into the immediate future.
Project Scope
Horwath HTL was engaged to conduct an independent due diligence assessment for a hotel near Sydney Airport. The project involved a comprehensive review of the hotel’s operational aspects, the prevailing hotel management agreement (HMA), and the capital expenditure (CAPEX) requirements, providing the client with critical insights to support their decision-making process.
The operational review focused on evaluating the hotel’s performance metrics, including occupancy, average daily rate (ADR), revenue per available room (RevPAR), and gross operating profit (GOP). We assessed the operational efficiency of front-of-house, back-of-house, and guest service areas to identify potential areas for optimisation and cost control. This analysis ensured the operational framework was in alignment with industry benchmarks and the hotel’s market positioning.
Our review of the HMA examined the terms and conditions of the agreement with the hotel operator, analysing its alignment with the client’s strategic objectives. Particular attention was paid to the rights and obligations of both parties, fee structures, termination clauses, and the agreement’s impact on the hotel’s financial and operational performance.
The CAPEX assessment involved a detailed evaluation of the current state of the hotel’s infrastructure and facilities. This included identifying immediate and medium-term capital investment requirements to maintain competitiveness and comply with brand standards. We provided recommendations for prioritising CAPEX investments to maximise guest satisfaction and return on investment.
The deliverables included a comprehensive report summarising our findings and offering strategic recommendations for optimising operations, ensuring favourable HMA terms, and managing CAPEX effectively. This due diligence engagement equipped the client with a clear understanding of the hotel’s current performance and future potential, enabling informed decisions for asset acquisition or management.
