Prestige Hospitality – Leaders in Hospitality Investing
Prestige Capital sources funding for the purchase and development of hotels by Prestige Hospitality. Prestige Hospitality was formed to create hospitality investment opportunities for all investor types. Typically, investment in this sector has been restricted to institutional investors due to the large sums of capital required. Many long-time hotel owners want to retire and enjoy the fruits of their labour but are struggling to find a workable exit strategy. Few owners have plans for succession and feel that they are trapped. According to Benjamin Tal of CIBC 30% of business owners will exit ownership or transfer control of their businesses within five years.(1)
This combination has created a lopsided market where sellers outnumber the buyers. Prestige Hospitality is well positioned to take advantage of this opportunity through the creation of diversified investment opportunities.
What We Believe
We are committed to ensuring that investors are a priority and are always presented with viable opportunities that exceed current industry practices. Our investment opportunities are built on sound business principles and are structured to fairly reward all investors. We do not charge annual management fees on investor funds or recoup initial capital from investors’ funds. When you invest with Prestige, you stand shoulder to shoulder with the Principals who invest their own money into all of their opportunities.
The Principals and Management have a combined expertise which ranges from financial syndication, construction, business development, hospitality management through to global brand. They are active participants in all aspects of the business and their knowledge and influence will greatly add to the success of the Fund.
Thorough Research and Analysis
All of our opportunities are thoroughly researched and analysed before we offer them to the public. We utilize both internal and external resources to ensure the hotels we pursue are financially viable and competitively structured. For our development opportunities we engage a wide spectrum of professionals like architects, interior designers, lenders, construction experts, and engineers; each with a specific skillset to scrutinize each opportunity from every angle. Only once we have firm construction commitments, proper permits, and lenders approvals will we approach equity partners with an investment offering.
In our diversified funds where we purchase existing operating hotels, we follow a 5 step acquisition process which again utilizes both internal and external resources. A typical review process adheres to the following steps:
- Analysis a member of the Management team will investigate and review a potential hotel.
- An internal “hotel industry” specialist will analyze the proposed hotel property and provide Management with a competitive analysis, an evaluation of the asset, and proposed terms for acquisition. Then the Controller of the Trust would review and comment.
- Internal Management Review and Approval
- Commission a third party evaluation firm such as HVS Consulting and Valuation Services, Jones Lang Lassalle or Pannell Kerr Foster to review, analyze, and provide a written report.
- Board of Directors, with the assistance of an Independent Consultant, will review the above third party report. The proposal must then receive unanimous consent of Management before a Hotel Property Acquisition will be made.
Professional Operational Management
Prestige Hospitality hires professional hotel management companies to operate the hotels on a day to day basis. The professional management team will bring well trained personnel, access to revenue management systems, financial reporting software, and operational best practices to the day to day operations. They duties include:
- Implementation of appropriate control and reporting systems;
- Preparation of annual operating budgets;
- Supervision of on-site staff including selection, hiring, directing, training;
- Maintaining appropriate operating procedures and systems as required by the hotel;
- Preparation of timely periodic financial statements;
- Preparation of annual marketing plans and on-going direction of advertising and promotion programs;
- Establish competitive room rates and food & beverage prices.
The responsibility for strategic decisions and capital improvements remain with Prestige Hospitality’s Management team. In addition, the Management keeps a close eye on the performance of each hotel. To ensure the operations management is performing the following steps are followed:
- Monthly internal financial statement review
- Quarterly site visits
- Commission and review STRS reports (Independent Industry Competitive Comparisons)
Review of annual audited financial statements