When we think real estate�s market appeal the old adage of �location, location, location� springs immediately to mind.  This is equally true of a commercial property as a private residence; it is certainly a key factor when a hotel or motel is listed for sale.  Many other factors are also considered when establishing a sales price and developing a sales presentation. 
 

Occupancy rate, ADR, RevPAR, age and condition of the property all become parts of the equation, and the list  goes on.  At what point is the current AAA and Mobil rating  put on the list?  Or is it already on the list?  How much impact does the rating have on the other factors?

Ask Harry and Cheryl We encourage readers to email us with questions on ratings, guest services, design, decor, etc. We'll directly respond to your questions. Email Harry and Cheryl

Operators tell us that the AAA and Mobil ratings directly affect occupancy and revenue.  Basically the math is pretty simple: the higher the rating, the more guests; more guests mean higher potential income.  A less obvious but very important benefit from a good rating is public perception.  A higher AAA and Mobil rating can often enhance a property�s image.

This perception is not limited to guests; buyers and investors often have the same opinion and react accordingly. 

In order to maximize the value of your investment, we suggest you take a close look at the rating of  the property you are operating, selling, or buying.  Is it accurately rated?  What is the long term retainability of the current rating?  Can the property earn a higher rating?   You may be able to conduct this analysis on your own or you may want to seek outside advice. 

If you are buyer or seller you might want to talk to your broker.  If you are a broker, we suggest you talk to your clients. 

Harry Nobles & Cheryl Griggs
www.optimumrating.com

• Former head of AAA Lodging/Dining Ratings Program. 
• An independent consultant serving the hospitality industry. 
• A Special Training Consultant to the Educational Institute, American Hotel/Motel Association