Many successful real estate investors consider adding a hotel to their commercial real estate portfolios. As in most commercial real estate investments, owner involvement is limited after acquisition to being a landlord and usually that is through a property management company.

If we make a comparison, hotels are different from other commercial real estate investments in that they are a special blend of investment in a business and in real estate. A hotel owner acquires not only a income producing property but also any businesses that are situated on the property. Although a hotel may already have professional management in place, owners should be prepared to address the operational details or future improvements of their investment.

There is an option in manage a hotel. A hotel owner needs to choose whether to operate the hotel independently or contract with a professional management company. In majority of commercial property management contracts, operational expenses are paid by the tenants. The owner of a hotel property must decide whether to operate independently or affiliate with a franchisor. The major reasons for franchise affiliation are brand name recognition, advertising and possibly the most important, a franchisee has access to the franchises national or international reservation system.

The profit of a hotel is not only from the rooms. Many hotel properties rely on the significant share of profits generated by food and beverage service. In summary, hotels are a commercial real estate investment as well as a real business. Investors, even those with years of experience in commercial real estate, should consult with knowledgeable professionals before committing to purchasing a hotel.