This Excel document is for valuing hotels using a Discounted Cash Flow (DCF) analysis. The document comes with instructions and templates for a 7-year and 9-year Basic DCF analysis, as well as 7-year and 9-year Custom DCF templates. The Basic DCF template utilizes the NOI generated from the jurisdiction's direct capitalization analysis, then adjusts on an average annual change rate. The Custom DCF template allows the user to specify ADR, occupancy, other income, and expense ratio for each period of the analysis.
All DCF templates require the appraiser to input yield rate and terminal cap rate conclusions, as well as Effective Tax Rates (ETRs) for each tax unit in the jurisdiction. The template is designed to apply the appropriate yield rate and ETR based on the hotel type. Hotel type allows for three tiers of Independent, three tiers of Economy, three tiers Limited Service, and three tiers of Full Service hotel metrics for yield rate and terminal cap rates. The appraiser also is required to establish the sale expense in the reversion period.
Consistent with USPAP Advisory Opinion 33, the (end-user/DCF template purchasing) appraiser is responsible for the entire analysis, including the controlling input, the calculations, and the resulting output. TEAM Consulting is not responsible for values established using the DCF template. The purchase price includes up to one hour of technical support for using the template. Technical support excludes appraisal advice or consulting on appropriateness of value.