Within the scope of the Post-Graduation in “Real Estate Management and Appraisal” at ISG, in partnership with ASAVAL, a seminar on the topic “Economic framework of asset valuation tourist properties”, was held last Friday, March 19, 2021 with the presentation of Gilberto Martins.

Gilberto Martins is an economist, Master in Tourism and consultant in the real estate market, with a particular participation in the hospitality market. At the moment, he is “Regional Business Development” at CBRE Algarve and “Partner” at Neoturis.

The seminar was excellent and allowed us to solidify some concepts about the evaluation of hotels that we use and that we would like to share.

Firstly, the adoption of “cash-flow” at constant prices, to the detriment of “cah-flow” at current prices. In fact, when we exercise the function of expert property appraiser, we always use discounted cash flows at constant prices, whatever the segment of the real estate market in which we are appraising.

Second, the estimate is based on EBITDAR (we add the “R” for rents) and not from FCFF (Free Cash Flow to the Firm). This option is emphasized by the fact that there is a universal accounting system within the scope of hotel management. We are referring specifically to the “Uniform System of Accounts for the Lodging Industry”, commonly known as USALI (despite the requirement to use the SNC, as an accounting standard, in Portugal).

Finally, the use of the binomials overnight stays / number of rooms and prices / occupancy rate, as “drivers” for the analysis of the hotel market.

ASAVAL is to be congratulated for the excellent initiative!

This article was prepared by João Fonseca, real estate appraiser and expert appraiser of machinery and equipment registered with the CMVM (Portuguese Securities Market Commission) with registration PAI / 2010/0019, member 7313161 of RICS (Royal Institution of Chartered Seurveyors) , RICS Registered Valuer, member of TEGoVA and European Registered Valuer REV-PT / ASAVAL / 2023/8, Member of the Fiscal, Disciplinary and Deontological Council of ANAI (National Association of Real Estate Appraisers), Expert of the Lisbon Stock Exchange Appraiser , Associate Thinker on the blog out-of-the-boxthinking.blogspot.pt. He is co-author of the book “Sustainable urban regeneration”, ISBN 978-989-8414-10-6. He has a Postgraduate Degree in “Management and Valuation in Real Estate” by Católica Porto Business School and has a training course in “Real Estate Valuation” by the Escola Superior de Imóveis Imobiliários. He has offices at Rua Pinto Bessa, 522, RC, Centro, Esquerdo, 4300-428 Porto and at Rua Visconde de Santarém, 75 C, 1000-286 Lisboa. He is a trainer in real estate appraisal at Domínio Binário.