The application of investment appraisal techniques in selected local three-, four-, and five-star hotels

Abstract

This study focuses on the implementation of investment appraisal techniques within the upper segment of the Maltese hotel industry - namely three-star, four-star, and five-star hotels. Personal interviews were conducted with various financial controllers and accountants of local hotels to determine whether and how such techniques are applied in the local hotel industry. The results show that the application of investment appraisal techniques is highly influenced by the ownership structure of the hotel. Despite the fact that investment appraisal techniques were used in most hotels, especially those that are not family run, some factors which are important for the correct implementation of appraisal techniques were, in certain cases, not properly quantified. The study is concluded by presenting some recommendations on how the current application of investment appraisal techniques may be improved in order to achieve better results.