Unless you are driven by necessity to only consider price, why do you pick one hotel over others in the same market? Location is usually the first reason on the list. You book a hotel because you don’t live there, and it makes sense to be maximally proximate to what you intend to visit.
Next, the nature of your visit often dictates what services you will require. A longer stay may suggest an extended stay facility over a full or limited service hotel, or if you intend only to use the room only for sleeping, a budget property may be the choice.
Hotel developers are good at picking convenient locations and often seek the synergy of competing properties to help establish a sense of destination. So, there are often multiple properties of a given service type (choices within the tiers of budget, limited, extended stay) in an established hotel destination.
As an assessor/appraiser, comparing like-service properties in established destinations can be a challenge. Often, since they are very close in age and quality, the location of these properties becomes even more paramount.
It helps to look at location in two ways, and in this order:
- General Location… is this the best overall location in town for hotels, or is it secondary or tertiary to other areas?
- Specific Location… given the general location quality (see #1), what is the proximity of the hotel to the interstate… first off or easiest to see? Or does the property have the best view? What about other characteristics… how does the individual property stack up in this submarket?
Really good valuation models will split the concept of location in the above manner for maximum accuracy of stratification, with a minimum of ranking inputs. The order really matters.