REFRESH OR REBRAND? HERSHA HOSPITALITY TRUST’S CADILLAC HOTEL DECISION

Authors

  • Victoria Geyfman Bloomsburg University
  • Christian Grandzol Bloomsburg University

Keywords:

hospitality industry, finance

Abstract

Hersha Hospitality Trust was a self-advised real estate investment trust (REIT) in the hospitality sector that owned a portfolio of upscale hotels in a variety of markets. After acquiring the Courtyard Marriott Cadillac Hotel in Miami for $97 million in 2011 and investing $25 million more to build an additional tower, Hersha learned in 2017 that it faced a third major investment of $10 million to bring the hotel into brand compliance. Given the prospects of this pricey “refresh,” Hersha decided it should consider Cadillac Hotel’s positioning to determine if the company should “rebrand” the 1940s hotel into a more upscale experience—a much more expensive proposition that would cost $45 million. George Malinsky, the Chief Accounting Officer, needs to prepare financial projections for income generation, property value, and capital budgeting to help craft the executive team’s recommendation for an upcoming board meeting.

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Published

2024-02-09

Issue

Vol. 17 No. 1 (2020)

Section

Cases

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