AUGUST 2010 Cornell Hospitality Quarterly 429 Hotel Valuation in China A Case Study of a State-Owned Hotel

This study applies the seven hotel-valuation tech-niques proposed by Rushmore to estimate the value of a state-owned hotel in China. The dearth of research on hotel real estate in China may be attrib-uted to the fact that the historic data of hotel sales transactions is not available or difficult to obtain. Nevertheless, many international hotel investors are interested in China’s hotels because of its booming tourism business. This study analyzes the extent to which the seven generally accepted hotel valuation techniques might be appropriate for China, since those approaches rely on certain types of data and financial ratios that may not be readily available. Using a single hotel as a case study, the study found that each valuation technique has its own strengths and weaknesses. On balance, the income capitaliza-tion approach should work most reliably in China, while a sales comparison approach may be the least reliable technique