Hotel properties have characteristics that are distinctly different to other types of property, and demand specialist skills and knowledge. Value growth is complex and is based on revenues and profits being influenced by several factors such as the underlying hotel market, choice of brand name, price and product segment, type of lease, and active ownership. Successful results demand that the hotels are continuously reviewed and analysed with the help of well developed working methodology that provides support to the decision making process.
Pandox’ working methodology to generate increased cash flow with limited risk is known as the Pandox Model, and is the Company’s most important principal operating procedure. The model includes four different stages, before implementation and follow-up. Each hotel property is regularly evaluated based on the four stages of the Pandox Model. Similarly, each investment and divestment is preceded by such an evaluation. The four stages are market analysis, market strategy, profitability optimisation, and lease optimisation
THE PANDOX MODEL
Market analysis
A market analysis is performed in order to assess the potential profitability of a hotel, and thereby its ability to pay rent. The local market is identified and analysed regarding demand, competition and the current and future supply.
Market strategy
A strategic plan is established for each hotel property based on the respective location’s specific prerequisites, the local market and its position in the hotel economic cycle. When preparing the strategic plan, the property’s continued utilisation scope is evaluated objectively and impartially.
Profitability optimisation
In view of a property’s value is influenced by the hotel operations’ profitability, the operator is naturally Pandox’ most important partner. In order to ensure positive developments within the hotel operations and the value of the property, the operator and related activities are continuously evaluated.
Lease optimisation
The optimal cash flow in each respective hotel property is then divided among the operator, Pandox and other parties concerned. Lease agreements are formulated so that all parties involved have an incentive to continuously improve the hotel property’s overall profitability.