Most hotel appraisals emphasize the income capitalization approach.

Question

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The income capitalization approach is widely used in hotel appraisals because it is based on the property's ability to generate income, which is a significant factor in hotel valuation. The approach involves estimating the property's potential net operating income and then applying a capitalization rate to determine its market value. Other approaches, such as the sales comparison approach, may also be used, but the income capitalization approach is typically the most emphasized.

Most Hotel Appraisals Emphasize the Income Capitalization Approach