OPINION | The Art of the Capital Structure

RobertDouglas is a proud contributor to the Third Edition of Hotel Asset Management: Principles & Practices, the Hospitality Asset Managers Association’s “living textbook” for current topics in the lodging industry. A collaborative effort between 37 industry professionals, the book is a publication of the American Hotel & Lodging Educational Institute and offers current thinking on a broad range of issues relevant to owners and operators of hospitality real estate assets.

“The Art of the Capital Structure”, co-authored by Rob Stiles, Stephen O’Connor, and David Smith, is a top-down overview of the financial tools and strategies available to hotel real estate investors. Using simple quantitative examples, the chapter explores some of the most important strategic issues faced by providers and users of hotel capital, and argues that the optimal financial strategy for hotel real estate investors is one that matches the goals and priorities of the owner with the wide range of debt and equity instruments available in the modern capital markets.

“The Art of the Capital Structure” consists of three key sections:

  • Why Use the Capital Structure at All? - The concept of positive financial leverage.

  • Understanding Your Investment Objectives - Risk appetite and ownership goals as the most important drivers of capital strategy.

  • How To Use The Capital Structure - Debt, equity, and everything in between: an overview of the virtually endless range of financial products available to modern hotel investors in the US.


To view a full electronic version of the chapter, please download a copy here.

To order a copy of Hotel Asset Management: Principles & Practices, Third Edition, please visit https://www.ahlei.org/ham/



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