When you're involved in the operation of a casino, you probably know a lot about the odds, but do you know about your business' value? Valuing a casino hotel business can seem very complicated, but it actually works by following a number of standard appraisal practices and procedures. Here's a quick look at the process of casino hotel valuation and how having one completed can help you stay on top of your financial gambles, ensuring that you know your odds of success in growing your business, undertaking sale negotiations and a range of other circumstances.
Beating the Odds: Valuing a Casino Hotel Business
To start, a business valuation specialist is someone who understands how businesses work and have experience in appraising their value. The appraiser will look at your business' position in the market, what particular niches it fills, its income levels, its expenses, areas that make it unique in the industry and similar aspects that can help determine its overall value. Much of this information is gathered through financial documents, phone calls and research.
The appraiser will need to know the reason for the appraisal. Why? Because there's a big difference between a casino hotel that is being sold off for the value of its assets alone versus one that is being sold in good condition that generates a solid income every year versus one that is booming and the existing owner or management wants to get out of the game while times are good. In some circumstances, such as a divorce, the enterprise must be sold using a specific valuation calculation, such as fair market value.
This is among the reasons why your appraiser will take a solid look at your financial records. The year you had a fire and all of the machines and interior fittings needed to be replaced had a lot of unusual expenses. The year you had twice as many conventions than usual had an impact on that year's income. For this reason, the appraiser will make adjustment entries for your financial books to account for these unusual levels of activity, so that they can be normalized and fit into any income-based appraisal calculations.
Does your casino hotel have a solid reputation that needs to be taken into account? Certain casinos have become household names, and those names are worth something. Are you in an exceptional location that is driving business to your casino? That also helps boost your appraised value. Does the hotel offer a range of other services that impact value, such as a spa, water sports rentals, a kennel for pets or a fine-dining establishment? The business valuation specialist takes all of these assets into account when calculating your casino's value.
Valuing a casino hotel business can seem like a complicated process, but by understanding the calculations that go into it, you'll gain a much better understanding of your company's strengths, weaknesses and which risks are a good bet. By working with an accredited business valuation specialist, you'll receive a comprehensive business valuation report that provides you with a lot of information on your business, making it easier to make tough decisions without risking everything you've built.