BOV (Broker Opinion of Value)

BOVs are the entry point to most hotel transactions. An owner considering a sale, a refinance, a partner buyout, or simply a strategic update on portfolio value asks a hotel broker for a BOV to understand where the asset prices in the current market. The broker invests the underwriting time in exchange for the opportunity to be retained on the eventual disposition. There is no upfront fee. The owner gets a market-tested valuation; the broker gets the inside track on the listing.

A complete hotel BOV runs 25 to 50 pages and covers six analytical layers. First, a property summary with chain scale, brand, year built, key count, last PIP, and physical-condition notes. Second, a market and submarket analysis with STR competitive set, supply pipeline, demand drivers, and forward RevPAR view. Third, a financial analysis covering trailing twelve months, year-to-date trends, and a stabilized pro forma. Fourth, a transaction-comp set with recent sales of similar assets, cap rates, per-key prices, and adjustment factors. Fifth, a valuation range expressed both as a cap rate band and as a per-key range, with the broker's specific recommendation. Sixth, a go-to-market strategy with timeline, marketing approach, and target buyer pool.

BOVs differ from formal appraisals in three structural ways. An appraisal is produced by a state-licensed appraiser under USPAP standards and is typically required for lender underwriting; a BOV is produced by a broker and is intended for owner decision-making. An appraisal is paid (typically $8,000 to $25,000 for hotels); a BOV is delivered free as part of the broker's business development. An appraisal is a valuation opinion that needs to defend itself against a challenge; a BOV is a market-pricing opinion that needs to attract a buyer at the recommended price.

BOVs are most useful when the broker has direct visibility into the active buyer pool. Generic valuation models can produce a number; what differentiates a useful BOV is the buyer-by-buyer view of who would underwrite this specific asset, at what cap rate, with what equity check, on what timeline. A broker actively in market with three Hampton Inn buyers in a Sun Belt secondary market produces a more credible BOV on a Hampton Inn in that market than a broker pulling from desktop comps alone.

Owners often request BOVs in pairs or threes. Soliciting BOVs from two or three brokerages produces a price range and a strategic-fit comparison. The range is informative; a 5 to 10 percent spread between BOVs is normal and reflects different views on cap rate, NOI normalization, and buyer-pool depth. Spreads above 15 percent usually indicate that one of the brokers is either reaching for the listing with an inflated number or applying a meaningfully different stabilization assumption. Owners should ask for the underlying assumptions, not just the headline number.

BOVs are confidential. The owner is not committed to a sale by requesting one. Brokers should not share BOV details outside the engagement, and owners can use BOVs to inform refinance decisions, partner buyouts, estate planning, internal portfolio review, or simply to track market value over time. The most disciplined owners run a fresh BOV on every asset every 18 to 24 months as part of standing portfolio governance, regardless of whether a sale is contemplated.