The assumptions real estate developers make regarding hotel development have a significant effect on the net present value (NPV) and internal rate of return (IRR) of the proposed project. While controlling for major hotel characteristics, we study the effect of hotel time-to-delivery (TTD), consisting of both planning and construction time, on the performance of hotel operations: occupancy, average daily rate, and revenue per available room after completion. These results will inform hotel real estate developers, operators, and analysts because the duration of development serves as a detrimental influence on the initial prospects of a hotel development project.
All Science Journal Classification (ASJC) codes
- Business, Management and Accounting (miscellaneous)
- Economics, Econometrics and Finance (miscellaneous)