Recheck operating costs, operator incentives and the competitive set before increasing your bid. Our focus this week is not whether a hotel has a compelling concept. It is whether the investment case survives a fresh review of the cash obligations behind it.
1. Does your expense budget reflect the new inflation release?
October 14: The Bureau of Labor Statistics reported that September’s consumer price index increased 0.6% month over month, seasonally adjusted, and 3.7% over 12 months. Gasoline accounted for more than half of the monthly increase. These are consumer-price measures, not a hotel operating-cost index. (bls.gov)
Owner action: Ask the operator to refresh utility, transport, food and contractor assumptions using actual invoices and supplier quotations. Do not apply the headline CPI increase indiscriminately to every expense line—or assume an equivalent room-rate increase will be achievable.
For a live acquisition, request an expense bridge showing which costs are contracted, which reset during the first ownership year and which remain estimates.
2. Are you negotiating the management fee—or the entire agreement?
October 14: In Hotel Online, hotelier Robert Rauch argues that owners should examine incentive mechanics, owner-priority returns, approval rights and termination provisions rather than negotiate only the headline management percentage. This is practitioner commentary, not a survey establishing universal contract terms. (hotel-online.com)
Owner action: Run each operator’s fee structure against the same operating case. Then ask:
- When does the incentive fee first become payable?
- Does an unmet owner-priority amount carry forward?
- What happens during renovation or a prolonged revenue shortfall?
- What reporting, budget approval and exit rights are actually written into the agreement?
Have hospitality counsel assess the wording. A proposal’s description of an owner protection is not a substitute for the executed provision.
3. Is a new lifestyle hotel a competitor—or simply an impressive announcement?
October 15: OCVIBE unveiled SENA, a planned 300-plus-key Autograph Collection hotel in Anaheim, with an expected 2029 opening. The developer describes a hotel integrated with the surrounding entertainment district, with a José Andrés restaurant and hospitality services led by Sage Hospitality Group. This is a development announcement, not an operating result. (ocvibe.com)
Owner action: For an Anaheim acquisition, add the project to the supply watchlist, but do not automatically add it to a 60-room boutique’s operating comparable set. Test customer overlap, event exposure, service level and opening timing separately. Its announced positioning does not establish achieved ADR, occupancy or profitability.
4. Has your New York City license actually been renewed?
Existing-rule reminder—not a new October requirement: NYC’s official hotel-licensing guidance states that licenses expire on September 30 in even-numbered years. For a hotel whose license expired September 30, 2026, that date has already passed. (nyc.gov)
Owner action: Obtain evidence of current licensing status rather than relying on a seller’s statement that an application was submitted. Include the operator entity and property address in the closing checklist, and refer any uncertainty to counsel and DCWP.