Using Artificial Intelligence for maximising hotel investment returns from an investor’s perspective



Metehan Sen

Metehan Sen

Founder & CEO

Senator Invest


Using Artificial Intelligence for maximising hotel investment returns from an investor’s perspective

Remember the saying „price is what you pay, value is what you get“.

When it comes to investing in hotel real estate how can Artificial Intelligence (AI) help investors to pay a price that is below the value of the asset. 

With the advent of AI tools sweeping into action the valuation of hotel assets will become more transparent and data driven. 

Until now hotel real estate was valued on its projected net profits based on rental or lease income and discounted to a net present value. 

How can AI help to increase profitabiilty and therefore the value of an hotel asset? 

With AI this art of valuing an asset will become more of a data based exercise. Imagine having more data to rely on when it comes to predicting future revenues and rental payments such as

  • the optimal franchise brand for the specific location
  • location analysis based on urban development trends taking into account future zoning constellations
  • footfall and passenger traffic forecasts based on airport and other mass-transport data
  • competitive trends when it comes to hotel brands looking to establish in your proximity
  • environmental impact on a specific location

Therefore Artificial Intelligence tools offer significant advantages for investors in maximizing returns from hotel investments:

1. AI for Valuing and Deciding on Buying Hotels

AI algorithms analyze large amounts of data, such as  historical revenues and costs and operational performance, general market trends, competitor behaviour in terms of pricing and room capacity offering, and location-specific factors, to provide more accurate valuations of hotel properties. An AI data-driven exercise can identify undervalued assets and potential opportunities that traditional methods does not capture.


2. Advantages of AI over Traditional Valuation Methodologies

While traditional valuation methods often rely on historical data and assumptions that may be biased and subjective. AI tools, on the other hand, can:

- process and analyze large datasets objectively, reducing human bias 

- identify complex patterns and correlations pf operational hotel metrics that may be missed by human analysis and experice based approaches

- include additional and non-traditional metrics, such as social media sentiment, ecological and weather patterns, and local events, for more comprehensive valuations. 


3. Generating Superior Yields with AI

By leveraging AI's predictive capabilities and data-driven insights, investors can make more informed decisions and optimize their hotel investments, potentially generating superior yields:

- enhancing revenues through AI-powered revenue management systems can dynamically adjust room rates based on demand forecasts, maximizing revenue during peak seasons and maintaining occupancy during off-peak periods thus resulting in higher market share and rising revenues 

- AI can reduce operational costs by identifying potential issues before they occur, minimizing downtime and repair expenses therefore reducing opex and capex needs

- AI-driven technology can enhance guest experiences, leading to increased customer satisfaction and revenue. Guest loyalty is crucial when it comes to repeat business and also helps to fend-off competition from competitors’ loyalty cards schemes

- resource optimization through AI can help hotels streamline operations, reduce waste, and improve overall efficiency, directly impacting profitability.


In summary, AI tools offer investors a data-driven, objective, and comprehensive approach to valuing and deciding on hotel investments. By leveraging AI's predictive capabilities, pattern recognition, and real-time adaptability, investors can gain a competitive edge and potentially generate superior returns on their hotel real estate investments.

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