This is part five of a seven-part series on value-add investing based on the strategic plan of A&R Development.

Now that we have looked at the big details, it’s time to scale down a bit. You don’t need millions of dollars to create a value-add. You can start small and find lost revenue to create a successful investment.

Maximizing revenue and adding value to a hotel can be achieved through the strategic implementation of new revenue generators. These revenue-generating opportunities can vary in scale, depending on the budget and available space within the hotel. Even simple initiatives such as selling chargers, consumable pantry items, travel essentials and even meeting spaces can gradually generate significant profits with minimal upfront investment.

For those seeking a more substantial return on investment, transforming a vacant space into a well-designed bar can turn an underutilized area into a lucrative asset. Hotel bars, when executed effectively, have the potential to be highly profitable and contribute significantly to the hotel’s overall revenue stream.

These examples represent just a glimpse of the endless possibilities for creative value-add initiatives. The key concept is to identify and capitalize on untapped sources of revenue within the hotel, thereby enhancing its overall value. By exploring innovative revenue-generating strategies, hoteliers can unlock hidden potential and boost profitability, ultimately elevating the property’s worth in the market.

The next installment of the value-add checklist will begin to talk about money. Sure, a perfect hotel that meets all of the due diligence criteria has been found but does it make economic sense? Normally the ideal property comes with a hefty price tag. The key is finding one of these unicorns where the hotel is undervalued. Tune in for the next part in the series to learn about cost.