Hotel Capitalization Rates and the Impact of Cap Ex

Hotel capitalization rates hold steady in current market environment, yet increasing need for capital improvements as assets age can affect values and rates of return. This article evaluates impact of cap ex on hotel cap rates and exit strategies.
Suzanne R. Mellen, MAI, CRE, FRICS, ISHC is based in San Francisco and is the Senior Managing Director and Practice Leader for the firm's U.S. consulting and valuation practice. HVS leaders now live in and work from more than 30 markets throughout the North American region, including San Diego, LA, San Francisco, Portland, Seattle, Vancouver, Las Vegas, and Phoenix in the west. Suzanne has been evaluating hotels and associated real estate for 37 years, has authored numerous articles, and is a frequent lecturer and expert witness on the valuation of hotels and related issues. Ms. Mellen has a BS degree in Hotel Administration from Cornell University and holds the following designations: MAI (Appraisal Institute), CRE (Counselor of Real Estate), ISHC (International Society of Hospitality Consultants) and FRICS (Fellow of the Royal Institution of Chartered Surveyors). Contact Suzanne at +1 (415) 268-0351 or


  1. Thank you very much.

  2. Bill BrarJan 29, 2014

    Do you have Hotel Staff salaries for US Hotels

    • Hi Bill- Court Williams is the best person at HVS to answer your question. He can be contacted directly at or +1 516 248-8828 ext. 220. Thanks, Kathryn Gritt Business Marketing Manager

  3. john messingMar 17, 2014

    What is the current capitalization rates for ocean front Luxury Hotel resort properties in South Florida?

    • Hi John, cap rates can vary significantly based on the asset, location, operating performance, etc. Cap rates for quality properties in South Florida would fall at the lower end of the range, but it depends on what the expectations are for a specific property in terms of future NOI. Thanks for your interest, Suzanne

  4. So Suzanne thinks sunny south Florida which includes Miami Beach and the Keys would fall on the lower end of the range of cap rates?! Sure! Lol

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