HOTEL AND HOSPITALITY FINANCE
Your Strategic Partner in Hospitality Transactions
We provide expert advisory services across the full spectrum of hospitality transactions. Whether you are on the buy-side or sell-side, an investor or an investee, we navigate the complexities to achieve your strategic objectives. Our core areas of focus include:
- Sale and purchase of hotels and similar tourist facilities for which we have a separate platform SEECAP Investment Properties.
- Financing the purchase of or investment in hotels and similar tourist facilities.
- Financing the construction and development of hotels and other tourist facilities.
- Sale, purchase, privatisation and financing of destination spa and health spa facilities (sanus per aquam).
Our dedicated hospitality finance expertise is powerfully combined with our comprehensive Corporate Finance, Mergers & Acquisitions (M&A), and Real Estate Finance to deliver holistic, value-driven solutions.
Unlocking Hospitality Finance: Our Access to Capital
A key differentiator is our direct access to a diverse range of funding sources. We leverage an extensive network to structure the optimal capital stack for your project, including:
- Traditional Bank Loans: Competitive terms from established financial institutions.
- Flexible Private Loans: Tailored solutions from private lenders.
- Significant Equity Capital: Access to up to €50 million from reputable European and Middle Eastern investment funds and family offices.
- Mezzanine Financing: Sophisticated capital solutions from dedicated mezzanine funds.
This allows us to tailor the ideal financial structure to meet your unique project requirements and ambitions.
Financing hotel construction or hotel acquisition
In the dynamic landscape of hotel development and acquisition, securing the right financing is crucial. We are dedicated to guiding you through every step of the process, ensuring that your project is not only financially viable but also positioned for long-term success.
We offer a comprehensive suite of services meticulously designed for hotel developers and investors embarking on new hotel development ventures or acquisitions. Our process typically commences with an in-depth review of your feasibility study or market research. Understanding and meticulously analysing the entire funding lifecycle—from land acquisition and construction through pre-operating expenses to the stabilising period and subsequent financial performance—is paramount. This detailed insight is crucial for securing optimal debt terms and maximising equity returns.
Our services in this area include:
- Project Assessment & Strategic Planning:
- Thorough assessment of the project’s feasibility, including market analysis and competitive landscape evaluation.
- Comprehensive due diligence of the proposed hotel development or acquisition.
- Business/investment plan preparation, articulating a clear path to value creation.
- Hotel development funding financial model preparation, encompassing construction, pre-opening, and stabilisation phase operational shortfall funding.
- Financial Modelling & Projections:
- Robust financial projections for the intended hotel development.
- Detailed hotel project proforma financial model (cash flow projections) preparation.
- In-depth Discounted Cash Flow (DCF) Analysis.
- Critical analysis of hotel investment metrics: equity multiple, IRR, NPV, key financial ratios (liquidity, leverage, profitability), and other vital project development ratios and statistics.
- Risk Analysis & Mitigation Strategies:
- Thorough project or investment risk analysis: scenario analysis, sensitivity analysis, break-even modelling, time series analysis, Monte Carlo simulation, and regression analysis.
- Strategic risk allocation and risk-adjusted returns analysis.
- Funding Structure Optimisation:
- Preparation of sources (equity, debt, or hybrid capital) and uses of funds statements.
- Design of tax-efficient investment and funding structures.
- Joint venture profit distribution waterfall modelling based on IRR hurdles, investor equity multiples, and residual cash flow split criteria.
- Debt Financing & Loan Structuring:
- Project finance debt sizing and sculpting to match project cash flows.
- S-curve modelling for construction progress and fund disbursement alignment.
- Construction budget development, with clear sources and uses of construction funds.
- Debt Service Coverage Ratio (DSCR), Debt Service Reserve Account (DSRA), and Maintenance Reserve Account (MRA) analysis and modelling.
- Interest rate debt waterfall financial models preparation based on debt seniority or project success.
- Arrangement of short-term (construction) financing, long-term permanent financing, and mini-perm loans (bridge loans).
- Structuring of junior loans, senior loans, and mezzanine financing.
- Securing construction loans and real estate investment loans tailored to hospitality assets.
- Documentation & Negotiation Support:
- Drafting compelling documentation for marketing the project to investors or lenders, including teasers, offering memorandums and term sheet proposals.
- Expert term sheet interpretation and negotiation with lenders.
- Offer (binding commitment letter) negotiation assistance.
- Recourse and non-recourse finance negotiation support, including detailed review and negotiation of terms and conditions under which a non-recourse loan may convert to recourse (“bad actor” clauses).
- Comprehensive support until the successful financial closing of your development.
Hotel refinancing services
The need for hotel refinancing can arise in various strategic situations. We provide expert guidance to navigate these scenarios effectively, optimising your capital structure and financial performance:
- Post-Development Refinancing: Assisting newly developed hotels in efficiently refinancing short-term construction loans with mini-perm (bridging) loans or long-term permanent loans.
- Optimising Existing Debt: Refinancing existing loans to secure more favourable terms and conditions, such as extending repayment periods, obtaining longer grace periods, achieving lower interest rates, or renegotiating restrictive loan covenants.
- Strategic Debt Restructuring: Refinancing an existing debt burden with convertible loans or fresh equity capital to mitigate the possibility of debt service default and enhance long-term financial stability.