Welcome to the 5th edition of Hospitality’s Leading Voices – your gateway to the bold ideas and visionary minds reshaping the future of hospitality!

This Month’s Game-Changer: Sophie Perret, Managing Director at HVS London.

With over two decades of hospitality expertise, Sophie Perret leads the advisory division at HVS London, specializing in hotel valuation and investment across EMEA. Her unique perspective and insights are driving the industry’s future — and we’re bringing you an exclusive inside look.

About HVS and Sophie’s Role

Sophie, who are you and what do you do?

I lead the advisory side of HVS in the UK, focusing primarily on hotel valuation. Valuation is the bread and butter of what we do, but we also provide broader advisory services.

What is your activity? What exactly do you do?

HVS is a hotel advisory firm. It started as a valuation company, and that remains the core of our activity. But globally, we offer different services. What we have here in London doesn’t necessarily reflect the full variety of what HVS does worldwide.

For example, in Germany, we have an executive search division, while in the US, we offer additional services such as advisory on casinos, conference and sports and entertainment facilities, amongst others. These services are good complements to the two core areas of expertise: valuation and advisory on one side, and brokerage on the other.

Can you elaborate on what the brokerage division does?

This is, more often than not, a sales-side advisory, where ultimately a property’s owners might be considering the disposal of the asset, and we are there to assist with the entire process of selling the asset.

HVS’s Role in the Hotel Life Cycle

Let’s get back to valuation. When you think about the life cycle of a hotel, at what stage does HVS step in?

We can be involved at various points in a hotel’s life cycle. To simplify, let’s take a typical private equity firm—they buy an asset, make value-add changes, and then sell it after five years or so.

We might step in at acquisition, when financing is needed. The investor will be approaching a lender or bringing in a joint venture partner, and they want a formal valuation to reassure everyone that they’re paying the right price. So, we might be involved for financing purposes, for partner alignment, or simply to provide a neutral perspective on the asset’s value.

Any other situations?

Absolutely. Sometimes, we are brought in not just for pricing validation but also for feasibility studies—say, if an investor is considering repositioning an asset.

For instance, post-pandemic, there has been strong interest from investors looking to acquire lower-positioned hotels, such as 3-star properties, with a view to upscaling them. In these cases, we assess the feasibility of such a move—how changes to the facilities would impact cash flow, what the financial projections look like if certain upgrades are made, etc.

We often collaborate with master planners and designers to determine whether the ideas to as to what would make the most commercial sense are structurally feasible. Additionally, if we are mandated by a lender, we might conduct annual valuations to reassess the asset’s market conditions, performance, and management efficiency.

Another scenario is financial reporting. Listed companies, for instance, need to publish the value of their assets, and our valuations are often part of that process.

Finally, we can also be involved at the exit stage. If an investor is considering selling or refinancing but isn’t sure if it’s the right time, we provide valuations to help inform that decision.

Client Base and Independent Valuation

So what I’m hearing is that you often step in before a decision is made, helping your clients make informed choices. Is that correct?

Yes, exactly.

And who are your main clients?

A substantial part of our work related to loan security work for lenders. They are followed closely by property owners and private equity firms.

Don’t these banks and private equity firms have their own teams to handle valuation?

Banks don’t per se prepare valuations internally, although their teams can be very sophisticated and able to model/get a strong understanding of an asset’s potential value. They do however require, always, an external, independent perspective to validate their underwriting.

Our added value comes from our broad market exposure. We have benchmarks from valuing similar hotels in the same markets, insights into trends in F&B or operating costs, and a more holistic view of the industry. Our valuations provide the lender with an independent view on the asset’s estimate of value

So you step into a very diverse range of situations.

Absolutely.

For example, we’re currently working on a case where an owner is disappointed with the operator’s performance, while the operator believes they are performing well. As a third-party, our role is to bring objective market evidence into the discussion.

We analyze the hotel’s P&L, comparing it to relevant market benchmarks. We look at occupancy rates, ADR, and all cost ratios. Our analysis highlights where performance is on par, above, or below market averages, and we provide context and our views for any gaps. This creates a fact-based foundation for constructive discussions between the owner and operator.

Key Drivers of Hotel Valuation

What are the main drivers of a hotel’s value?

First and foremost, profitability. This varies widely between assets and is the biggest determinant of value.

Then, you have market considerations—capital investment trends, demand outlook, and broader economic conditions.

From a profitability standpoint, what are the key drivers?

The primary driver is topline revenue—occupancy and ADR. This has been particularly relevant post-pandemic because we’ve seen major shifts in performance.

Generally, in the luxury segment, average room rates have skyrocketed. While this has come at the expense of occupancy in some cases, the trade-off has still been positive. Many high-end hotels have emerged from the pandemic in a stronger position than before.

And what about other hotel segments?

The picture is more mixed.

Whilst the hotels positioned at each end of the spectrum, whether luxury or budget, are generally performing well, many mid-market hotels are taking longer to recover. It all comes down to demand segmentation—hotels with a strong leisure base have recovered faster and have been able to increase rates, while those dependent on corporate and group business, especially in regional markets, have not yet fully recovered to 2019 levels.

Hotels as an Investment Class

Beyond cash flow, what else drives valuation?

Investor appetite plays a big role.

Hotels have become increasingly attractive as management structures become increasingly sophisticated, and the range of options for owners have increased with third party operators, franchises and soft brands. The availability of benchmark information has also improved, and investors are better placed than they were in understanding the challenges and opportunities of this asset class. Also, other asset classes—like office real estate—have had a more mixed performance since the pandemic, making hotels comparatively more attractive.

For instance, office occupancy levels are yet to fully recover to pre-pandemic levels in major cities like New York, Paris, and London. So, relative to office, retail, or logistics assets, hotels are now seen as a more compelling investment option.

So, it’s about how hotels fit into an investor’s overall portfolio strategy?

Exactly. Hotels are coming out of the pandemic in a strong position, and investors recognize this.

This doesn’t mean every opportunity is good—investors are being selective—but overall, the sector has gained credibility as an investable asset class.

Historically, hotels were considered an “alternative” asset. But today, they are increasingly viewed as mainstream. Whilst the hotel space is a lot less deep than offices, and requires more know-how to invest into and make a return, it is no longer viewed as purely a niche investment.

You mentioned luxury hotels seeing strong growth. Do you foresee this slowing down?

It has already started to normalize.

Some markets are still experiencing strong growth—Portugal, for example, has seen a significant upswing.

What’s driving Portugal’s growth? Is it just post-pandemic recovery?

The US remains the key source market for European tourism.

Post-pandemic, American travelers explored the classic European destinations. Now, they’re looking for new experiences. Additionally, ADRs in major European cities have surged, and even with a strong dollar, travelers want to find value. So, they’re expanding beyond the core destinations.

ESG and the Future of Valuation

Are banks focusing more on financing luxury hotels, or does it depend on each institution’s strategy?

It depends on the bank’s portfolio strategy.

Lenders always want diversification—geographically, by asset type, etc. They assess risk based on an asset’s fundamentals, market regulations, tax environments, and cost structures. Some banks have dedicated hospitality teams, while for others, hotels are just another asset class managed by generalists.

The owner’s profile and experience of the sector also plays a role in the bank’s willingness to finance a hotel project.

Sophie’s Journey and Advice

Let’s talk about you Sophie, how did you end up in this business?

I’ve always wanted to travel. I started in hotel operations in Argentina, then did an MBA at ESSEC (IMHI), which led me to HVS. I initially worked in Madrid, helping establish our office there, and then moved to London.

What advice would you give to students looking to enter this field?

Passion for hotels is key. If you don’t enjoy interacting with people—owners, lenders, auditors—this isn’t the job for you. Consulting is more than just analysis; it’s about relationships.

About Philippe Roy: He’s a contributor of HSMAI Europe and the founder of Red Yucca, an Advisory Services firm helping companies and merchants reduce their cost of accepting payment cards. It has a deep expertise on Influence Strategies, Complex Negotiation, Value Propositions and Relationship Management. It operates both locally and globally. Philippe is also a new member of the upcoming HSMAI Europe France Advisory Board.

About Sophie Perret: Sophie is managing director of HVS London. She joined HVS in 2003, following ten years’ operational experience in the hospitality industry in South America and Europe. Originally from Buenos Aires, Argentina, Sophie holds a degree in Hotel Management from Ateneo de Estudios Terciarios, and an MBA from IMHI (Essec Business School, France and Cornell University, USA). Since joining HVS, she has advised on hotel investment projects and related assignments throughout the EMEA region, and is responsible for the development of HVS’s business in France and the French-speaking countries, as well as Africa. Sophie completed an MSc in Real Estate Investment and Finance at Reading University in 2014. Sophie is also a certified surveyor and a member of the RICS.

About HSMAI Europe

HSMAI – Hospitality Sales and Marketing Association International – is a global organisation founded in the US in 1927. HSMAI Region Europe is the European arm of the organisation. HSMAI Europe aims to be a key influencer, pioneer and the go-to industry resource for professional development, commercial strategies and sustainability in the hospitality, travel and tourism industry. With a strong focus on education, HSMAI has become the industry champion in identifying and communicating trends in the hospitality industry while operating as a leading voice for both hospitality and sales, marketing, and revenue management disciplines.

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