Esteema Capital Partners operates across two specialist divisions:
1. Esteema Hospitality ‘CAPITAL & INVESTMENTS’ Partners
(Operational | Non-Operational | Development | Special Situations)
Debt | Equity | Joint Ventures | Any Purpose & Any Amount
Hospitality is a highly specialised investment domain—defined by complex operating models, multiple stakeholder groups, brand and operator dynamics, and nuanced risk profiles. Successful execution demands deep sector fluency, disciplined underwriting, and absolute execution certainty.
We leverage extensive hospitality expertise and privileged access to both private and institutional capital partners across the UK and global capital markets. Through diversified and optimised capital structures, we deliver a clear competitive advantage over traditional funding—anchored by our commitment to Performance • Productivity • Professionalism and driven by Quick Decision – Quick Funding.
Esteema Hospitality Capital Funding & Investments Expertise Delivers
- Institutional & Alternative Capital Structuring
Disciplined, institutional-grade underwriting and structured capital solutions across debt, equity, and joint ventures—creating investment-ready, de-risked funding structures with high execution certainty. - Complete Capital Stack & Syndicated Solutions
Access to senior and junior debt, private equity, joint ventures, and club or syndicated capital, enabling flexible and optimised structuring for mid- to large-scale, complex, and multi-jurisdictional transactions. - End-to-End Lifecycle Funding
Comprehensive capital support from acquisition and development through stabilisation, refinancing, and exit—ensuring continuity, alignment, and certainty throughout the investment lifecycle. - Hospitality Sector Expertise & Global SPV Structuring
Deep experience across the full hospitality spectrum and special situations, supported by UK and international SPV structures aligned with investor objectives, tax efficiency, and regulatory requirements.
2. Esteema Hospitality ‘ESTATE & ASSET TRANSACTIONS’ Partners
(Operational | Non-Operational | Development | Special Situations)
Acquisitions | Disposals | Asset Management
Our deep expertise in the hospitality sector delivers hospitality asset transactions with discretion, depth of analysis, and institutional discipline—supporting investments, acquisitions, disposals, and active asset management mandates.
Each opportunity is underpinned by comprehensive financial, commercial, and structural due diligence, ensuring informed decision-making and alignment for both investors and vendors. Transactions are executed discreetly and selectively through our credible network of private, family office, and institutional partners, enabling controlled processes and execution certainty.
Esteema Hospitality Transactions Expertise Delivers
- Discreet Off-Market | Institutional Execution
Confidential off-market sourcing and execution, supported by institutional-grade financial, commercial, legal, and structural due diligence. - Strategic Value Optimisation
Disciplined pricing, structuring, and asset positioning to maximise value across acquisitions, disposals, and asset management mandates. - Credible Global Counterparties | Execution Certainty
Execution certainty delivered through aligned stakeholders and access to vetted private, family office, and institutional counterparties. - End-to-End Transaction Management
Comprehensive support from transaction strategy and positioning through completion and post-transaction advisory, including reinvestment, recapitalisation, and subsequent acquisitions or disposals. - Faster & Better Transactions Execution:
Direct decision-maker access, institutional discipline & due diligence, and pre-aligned capital deliver faster execution and superior outcomes versus traditional agency channels.
Esteema Capital has successfully supported numerous challenging transactions, unlike conventional channels, which could not.
“Unlock Capital- Transform Assets – Maximise Returns’
Esteema Hotel Finance | Traditional Financing | |
|---|---|---|
| ✓ Any Purpose Finance | Purchase, New Built, Investment M&A, Restructure etc | No |
| ✓ Any Type Finance | Short Term, Medium-term, Long-Term Loan | No |
| ✓ Any type of Hospitality | Yes | No |
| ✓ Any Borrower (UK & International) | Yes | No |
| ✓ ANY SPV (UK or Offshore) | Yes | No |
| ✓ Any Location (UK or Globally) | Yes | No |
| ✓ Multi-Currency & Cross Border Funding | Yes | No |
| ✓ Loan Size | No Upper Limit | Very Restricted |
| ✓ Leverage | Up to 70% | Very Restricted |
| ✓ Interest Rate | from 1.75% + | From 4%+ onward |
Key Factors Affecting Hotel & Leisure Finance?
Borrower Profile
✓ Sponsor Experience & Track Record
✓ Corporate / SPV Structure & Transparency
✓ Net Worth & Liquidity Position
✓ Existing Portfolio & Leverage Profile
✓ Credit History & Banking Relationships
Collateral Profile
✓ Asset Location & Market Positioning
✓ Brand & Operational Structure
✓ Trading Performance
✓ Valuation & Yield Metrics
✓ Capex & PIP Requirements
Financial Appraisal
✓ Historic Financial Performance
✓ Forward Projections & Sensitivity Analysis
✓ Loan-to-Value (LTV) & DSCR Strength
✓ Covenant & Interest Rate Stress Testing
✓ Exit & Refinance Strategy
Hotel & Leisure Guide | Finance | Investments | Transactions
HOTEL BUYING & INVESTMENTS GUIDE
HOTEL BUYING & INVESTMENT GUIDE
Introduction
Hotel investments can deliver attractive risk-adjusted returns when structured correctly. However, unlike traditional real estate, hotels are operationally intensive, cyclical, and highly sensitive to management quality and market dynamics.
Esteema Capital Partners provides specialist advisory on hotel acquisitions, disposals, and capital structuring across the UK, Europe, and global markets — combining deep sector expertise with institutional-grade execution.
Why Invest in Hotels?
Steady Income
Daily room sales generate recurring cash flows, often delivering higher yields than office or retail assets.
Capital Appreciation
Prime locations benefit from long-term value growth and repositioning opportunities.
Diversification
Hotels provide exposure to leisure, corporate travel, and broader consumer spending cycles.
Inflation Hedge
Room rates can be repriced frequently, offering natural inflation protection.
Tax Efficiency
Depreciation allowances and sector-specific incentives may enhance net returns.
Ways to Invest in Hotels
Direct Ownership
Pros: Full control and highest return potential.
Cons: High capital requirement and active operational management.
Fractional / Crowdfunding
Pros: Lower entry capital and professional management.
Cons: Limited liquidity and restricted exit flexibility.
Hotel REITs
Pros: Publicly traded, low capital requirement, strong liquidity.
Cons: Market volatility and limited operational control.
Listed Hotel Companies
Pros: High liquidity and no operational responsibility.
Cons: Share price volatility and market correlation risk.
Hotel Operational & Investment Models
Direct Ownership
Higher return potential with elevated operational exposure.
OpCo / PropCo Structure
PropCo owns the real estate and earns rental income.
OpCo manages operations and captures trading upside.
Combined Ownership
Common in distressed or turnaround scenarios.
Managed Hotels
Professional operator manages the asset under a management agreement.
Leased Hotels
Stable, bond-like income through fixed or turnover-based lease structures.
Hotel Contract Types
Management Contract
Passive ownership with professional operator management and lower operational involvement.
Franchise Contract
Active ownership supported by global brand distribution and marketing.
Owner-Operator
Full operational control with higher risk and return profile.
Key Operational & Financial Metrics
Revenue Performance Metrics
Occupancy Rate, ADR (Average Daily Rate), RevPAR.
EBITDA Margin
Typically ranging between 25%–45% depending on segment.
Capitalisation Rates
Generally 6%–9% depending on market and stability.
Target IRR
Typically 7%+ depending on strategy and risk profile.
Debt Service Coverage Ratio (DSCR)
Generally ≥ 1.40x for institutional senior lending.
Financing Structures
Senior Debt
Typically 55%–65% LTV.
Stretch / Whole Loans
Up to approximately 75% LTV.
Mezzanine & Preferred Equity
Structured capital to enhance leverage.
Joint Venture Equity
Strategic capital partnerships for growth and repositioning.
Private Credit
Flexible funding solutions for complex or time-sensitive transactions.
Investment Considerations
Property
M&E systems, fire safety compliance, EPC rating, room condition.
Location
Demand drivers, competitive supply, accessibility, infrastructure.
Operator / Brand
Contract terms, fee structure, historic performance.
Financial & Legal
P&L history, title review, seasonality, staff liabilities.
Due Diligence Essentials
Physical Condition
Technical surveys, compliance and lifecycle assessment.
Market Analysis
Demand segmentation and forward pipeline supply.
Operational Review
Brand agreement, management fees, PIP obligations.
Financial Review
Historical trading accounts and cash flow stability.
Legal & Structural Review
Title, lease structures, encumbrances and regulatory compliance.
Key Negotiation Points
VAT Treatment & TUPE Liabilities
Understanding transaction structuring implications.
FF&E Inventory
Condition and ownership of fixtures and equipment.
Brand & PIP Requirements
Approval processes and capital expenditure commitments.
Capex Responsibilities
Allocation of refurbishment and upgrade costs.
Handover & Transition
Operational continuity and staff transfer arrangements.
Red Flags
Sustained Low Occupancy
Occupancy consistently below 50%.
Deferred Maintenance
Significant capital expenditure backlog.
OTA Dependency
Excessive reliance on online travel agents.
Weak Operator
Limited track record or underperformance.
Compliance Issues
Fire safety or EPC non-compliance.
Valuation Methodologies
EBITDA Multiple
Typically 6x–15x depending on segment and location.
Income Capitalisation
NOI divided by Cap Rate.
Discounted Cash Flow (DCF)
10–15 year forward projections.
Cost Approach
Land value plus replacement cost.
Residual Valuation
GDV minus total development costs.
Exit Strategies
Stabilise & Sell
Improve trading and exit at stronger yield.
Create Lease Structure
Sell on income yield basis.
Rebrand & Reposition
Enhance ADR and valuation multiple.
Refinance
Optimise capital structure post-stabilisation.
Alternative Use Conversion
Aparthotel, PBSA, co-living or mixed-use repositioning.
Disclaimer
This document is provided for information purposes only and does not constitute investment advice. Investors should seek independent professional advice before proceeding with any transaction.
Please Contact Us for help with
‘Global Hotel Capital Funding, Investments or Transactions ‘
Esteema Capital Partners
Email: ambrish@esteemacapital.com
Office: +44 (0) 208 464 6430
Mobile: +44 (0) 7740 646 777
Website: www.esteemacapital.com
NEW HOTEL DEVELOPMENT GUIDE
Esteema Capital Partners’ Hotel Investment Guide offers a straightforward approach to buying or developing new hotels, covering every stage from land acquisition to eventual exit. Our comprehensive expertise spans the entire process: from capital advisory for new developments, through stabilisation, to exit.
1. Understand the Hotel Development Lifecycle
A hotel development typically goes through these 8 stages:
- Site Identification – Location, planning status, access, demand drivers.
- Market & Feasibility Study – Competitor supply, occupancy, ADR, RevPAR.
- Financial Feasibility – Development cost, funding mix, IRR, ROI.
- Concept & Design – Room mix, brand standard, layout.
- Planning Permission – Council approvals.
- Financing – Senior debt, mezzanine, equity, JV.
- Construction & Fit-Out – Contractor, timeline, FF&E.
- Pre-Opening & Operations – Staff, systems, marketing, soft opening.
2. Key Hotel Asset Types
- Budget / Limited Service — Ibis, Holiday Inn Express
- Midscale — Hampton, Courtyard
- Upscale — Hilton, Marriott
- Luxury — Ritz-Carlton, St. Regis
- Extended Stay / Aparthotel — Adagio, Staybridge
- Resort — Beach, mountain, golf
- Boutique / Lifestyle — Hoxton, Moxy
3. Financial Metrics Developers Must Know
3.1 Operational KPIs:
- Occupancy (%)
- ADR
- RevPAR
- TRevPAR
- GOP / GOPPAR
- NOI / EBITDA
3.2 Investment Metrics:
- Total Development Cost (TDC)
- Cost per Key
- Yield on Cost
- IRR (Unlevered & Levered)
- Equity Multiple
- DSCR
4. Development Cost Structure
Typical UK & Europe hotel development cost split:
- Land — 10–25%
- Construction — 45–55%
- FF&E + OS&E — 8–12%
- Professional Fees — 7–10%
- Finance Cost — 6–12%
- Contingency — 3–6%
- Pre-opening Cost — 1–2%
5. Funding Options for New Hotel Development
Esteema Capital Partner can help you with the low-cost capital and capital structuring advisory services
- Senior Debt
- Mezzanine Debt
- Equity / JV Partner
- Forward Funding / Forward Purchase
- Bridge Loan – Land Acquisition
Please get in touch with us for a discreet discussion & support.
6. Brand vs Independent
Branded Hotel (Franchise/Management)
Pros: Higher occupancy, strong distribution, easier financing.
Cons: Brand fees 8–12%, strict design rules.
Independent Hotel
Pros: Full flexibility, lower fees.
Cons: Needs strong marketing.
7. Key Documents Required (Developer Checklist)
- Site & Legal: Title deeds, site plan, planning history.
- Technical: Architect designs, MEP, cost plan, programme.
- Financial: Feasibility, 10-year P&L, development appraisal.
- Operator / Brand: LOI, HMA/Franchise docs.
- Market Study: Competitor set, STR data.
8. Risk Factors & Mitigations
- Planning Risk – early council meetings
- Construction Risk – fixed-price contract
- Cost Overrun – QS monitoring
- Market Risk – sensitivity analysis
- Funding Risk – early term sheet
- Operator Risk – strong brand
9. Exit Strategies
- Stabilisation & Refinance
- Sale to an institutional buyer
- Forward sale
- Hold as an income asset
10. Summary
Esteema Capital Partners’ guide offers a straightforward approach to developing new hotels, covering every stage from land acquisition to eventual exit. Our comprehensive expertise spans the entire process: from providing capital advisory for new developments, through stabilisation, and ultimately to exit.
Please Contact Us for help with
‘Global Hotel Capital Funding, Investments or Transactions ‘
Esteema Capital Partners
Email: ambrish@esteemacapital.com
Office: +44 (0) 208 464 6430
Mobile: +44 (0) 7740 646 777
Website: www.esteemacapital.com
HOTEL FINANCING GUIDE
- Overview
Hotel financing involves securing funds to buy, build, renovate, or refinance a hotel asset. Because hotels combine real estate (PropCo) and operating business (OpCo), lenders assess both—the property’s value and the business’s cash flow performance.
- Types of Financing
• Senior Debt – First-charge loan, interest from 5% p.a.
• Mezzanine Debt – Second-charge bridging equity and senior debt, from 10% p.a.
• Preferred Equity – Hybrid priority equity, from 12% IRR.
• Equity / JV Partner – Full risk-sharing investor, from 15% IRR.
• Bridge Loan – Short-term, from 10% interest PA
• Development Finance – For construction, 60–70% LTC typical.
• Working Capital Loan – For FF&E, branding, or liquidity.
- Key Documents Required
A – Property & Legal
• Title deed/lease copy
• Valuation report (RICS, Savills, Colliers, etc.)
• Planning approval & licenses
• Hotel management or franchise agreement
• Building condition / capex report
B – Financial
• Historical financials (3 years minimum)
• Current P&L and balance sheet
• Forward business plan/projections (3–5 years)
• Cost-to-complete (for developments)
• Sensitivity / IRR analysis
C – Operational
• STR/market benchmarking
• Brand or operator profile
• Key operating KPIs: RevPAR, GOPPAR, NOI, occupancy, ADR
• Staffing and payroll breakdown
4. Key Metrics
• LTV: 55–70%
• DSCR: ≥1.5x
• IRR: 12–25%+
• NOI Margin: 30–45%
• Stabilisation: 2–3 years
- Financing Process
1. Initial Assessment: Borrower profile, location, and deal summary.
2. Term Sheet / Indicative Offer: From lender or investor.
3. Due Diligence: Valuation, legal, financial, and technical reviews.
4. Credit / IC Approval: Funding structure, pricing, and covenants.
5. Documentation & Completion: Loan agreement, security charge, debenture.
6. Drawdown / Monitoring: Funds released per milestone or condition.
- Cost Components vary subject to the borrower and the asset’s structure. It may include
1. Lender initial arrangement fee
2. Legal. SDLT & Valuation
- Key Considerations
• Location & demand drivers
• Brand/operator strength
• Capex & FF&E
• Exit plan (sale/refinance)
• Occupancy/ADR sensitivity
• Interest rate risk
Please Contact Us for help with
‘Global Hotel Capital Funding, Investments or Transactions ‘
Esteema Capital Partners
Email: ambrish@esteemacapital.com
Office: +44 (0) 208 464 6430
Mobile: +44 (0) 7740 646 777
Website: www.esteemacapital.com
HOTEL FINANCING DOCUMENTS GUIDE
- PROPERTY DOCUMENTS
- Title deed / Land registry extract (Freehold / Leasehold)
- Site plan and location map
- Building layout, architectural drawings, and floor plans
- Valuation report (RICS or equivalent)
- Building condition / structural report
- CapEx and maintenance summary
- Planning permission / zoning approval
- Fire, safety, and environmental compliance certificates
- FF&E and OS&E asset inventory list
- Energy efficiency certificate (EPC)
- LEGAL DOCUMENTS
- Company incorporation certificate and memorandum/articles
- Shareholding structure / ownership chart
- Board resolution authorising borrowing
- Loan security documents (if existing)
- Lease agreements (if leasehold or tenant occupied)
- Hotel management / franchise agreement
- Operator performance clause (HMA / FMA / lease)
- Key contracts (maintenance, laundry, housekeeping, etc.)
- Insurances – building, business interruption, liability
- Landlord consent / title opinion (if applicable)
- FINANCIAL DOCUMENTS
- Last 3 years of audited financial statements (P&L, Balance Sheet, Cashflow)
- Current year management accounts
- Hotel trading summary – Occupancy, ADR, RevPAR, GOP, NOI
- Forward financial projections (3–5 years)
- Cost to complete (for developments or refurbishments)
- Detailed budget with cost breakdown
- Sensitivity analysis / IRR and ROI model
- Existing loan statements and repayment schedule
- Bank statements (6–12 months)
- Tax compliance certificates (VAT, corporation tax)
- OPERATIONAL DOCUMENTS
- Brand / operator profile (Marriott, Accor, IHG, etc.)
- STR or market benchmarking report
- Sales & marketing plan / demand generators list
- Staff organisational chart & payroll summary
- Hotel licenses – alcohol, music, food hygiene, tourism
- Customer review / reputation data (TripAdvisor, Google, etc.)
- IT systems summary (PMS, POS, booking engines)
- Service contracts (utility, broadband, waste, etc.)
- DEVELOPMENT / CONSTRUCTION DOCUMENTS
- Development appraisal / cost plan
- Quantity surveyor report
- Construction contract & contractor credentials
- Building warranties (NHBC, Build-Zone, etc.)
- Site insurance policy
- Program of works & completion timeline
- Planning Section 106 or CIL obligations
- Certificates of compliance (building regs, fire safety)
- CORPORATE & SPONSOR INFORMATION
- Borrower / Sponsor CV and track record
- List of past projects and experience
- Asset & liability statement (personal & corporate)
- Proof of equity contribution
- Business plan / investment memorandum
- Company organisational chart
- Shareholders’ agreement (if JV)
- Group guarantee or parent support letter
- ADDITIONAL (FOR LENDER/INVESTOR REVIEW)
- Independent valuation & feasibility report
- Environmental / flood / risk report
- Photographs and video walkthrough
- Exit strategy – refinance, sale, or hold plan
- Draft Heads of Terms (if equity or JV)
- Broker / advisor summary sheet
Please Contact Us for help with
‘Global Hotel Capital Funding, Investments or Transactions ‘
Esteema Capital Partners
Email: ambrish@esteemacapital.com
Office: +44 (0) 208 464 6430
Mobile: +44 (0) 7740 646 777
Website: www.esteemacapital.com
HOTEL & LEISURE TRANSACTIONS GUIDE
Esteema Capital Partners is a London-based, FCA-regulated multi-family office specialising in ‘Hospitality Investments & Transactions‘ across the UK & Globally.
We are recognised for our deep expertise, strong institutional relationships, and a long-standing reputation for delivering confidential, seamless, and strategic hotel transactions.
Our Expertise – Hotel Acquisitions & Sales
Our clients include privately managed hotel funds, institutional investors, family offices, REITs, and private capital groups seeking high-quality hospitality assets across key markets.
We actively support clients in both acquisitions and disposals, ensuring professional execution and access to exclusive off-market opportunities.
Acquisition Expertise:
- Off-market sourcing of 3–5 star hotels (flagged or independent)
- Single assets and portfolios up to £250M+
- Income-producing, value-add, and repositioning opportunities
- Forward purchase and development of hotel projects
- Distressed and special-situation transactions
- Comprehensive underwriting, valuation, and due diligence support
- Access to pre-approved bank debt facilities (up to 65% LTV)
We act with full discretion, ensuring investors receive carefully screened opportunities that match their investment mandate, risk appetite, and return objectives.
Our Expertise – Hotel Sales
Esteema Capital Partners also represents hotel owners, developers, and operators in discreet and strategic sales transactions.
- Sales Capabilities:
- Discreet sales of branded independent hotels
- Off-market seller representation for confidential and faster execution
- Targeted introductions to cash-ready global investors
- Strategic valuation, operator assessment, and exit planning
- Management of due diligence, negotiations, and completion
- Access to a global network of active hotel buyers and funds
Please be assured that every transaction is managed with professionalism, confidentiality, and precision, while protecting brand and operational sensitivities.
Please Contact Us for help with
‘Hotel Capital Funding, Investments & Transactions’
Esteema Capital Partners
Email: ambrish@esteemacapital.com
Office: +44 (0) 208 464 6430
Mobile: +44 (0) 7740 646 777
Website: www.esteemacapital.com
HOTEL FINANCE -FREQUENTLY ASKED QUERIES (FAQ)
1. How much can I borrow?
This depends on several key factors, including your experience, business performance, security value, affordability, and the strength of your business plan. However, if all criteria are strong, some lenders can offer up to 100% financing.
Esteema Capital Partners can help you structure the most suitable and competitive financing solution.
2. Can I borrow with an adverse credit report?
Yes. Funding is still possible even with past credit challenges. We assess your overall circumstances, reasons for the adverse credit, and current financial standing.
Esteema Capital Partners can guide you to lenders who are flexible with CCJs, arrears, or historic issues.
3. I am a first-time investor. Can I get hotel finance?
Yes. First-time buyers can still secure hotel finance. We support you with a strong business plan, projections, and lender preparation.
Esteema Capital Partners can help you prepare a lender-ready project report, even if you have no prior hotel experience.
4. I have never built a hotel before. Can I get finance for a new-build hotel?
Yes. Development finance is achievable even with no direct construction history. Lenders look at the contractor, cost plan, risk management, and sponsor strength.
Esteema Capital Partners can help you prepare the development appraisal, contractor pack, and complete funding structure.
5. Can I get finance for a closed hotel with no trading history?
Yes. Lenders do finance closed, non-operational, repossessed, or distressed hotels. Approval depends on the turnaround strategy and the capex requirement.
Esteema Capital Partners can help you build the projection model and repositioning plan required for lender approval.
6.Can I get hotel finance with no historical accounts AND no experience?
Yes. With the proper structure, this is possible.
Esteema Capital Partners can help you match with lenders who support new entrants to the sector.
7. Can I finance a part-built or incomplete hotel project?
Yes. Stalled construction and repossessed sites can be refinanced or newly funded.
Esteema Capital Partners can help you secure debt, mezzanine, equity, or JV solutions for such assets.
8. Can I get finance for an apartment hotel, leisure resort, or mixed-use hospitality asset?
Yes. These are fundable depending on seasonality, location demand, and operator model.
Esteema Capital Partners can help you structure the right funding model suitable for your asset type.
9. What if the property needs refurbishment or repositioning?
Lenders regularly support value-add and refurbishment projects.
Esteema Capital Partners can help you prepare a lender-ready value-add proposal and model.
10 What if I have a limited deposit or equity?
There are multiple solutions, such as additional security, JV equity partners, mezzanine equity, or vendor support.
Esteema Capital Partners can help you arrange both debt and equity to complete your capital stack.
Please Contact Us for help with
‘Hotel Capital Funding, Investments & Transactions’
Esteema Capital Partners
Email: ambrish@esteemacapital.com
Office: +44 (0) 208 464 6430
Mobile: +44 (0) 7740 646 777
Website: www.esteemacapital.com
