Hospitality Capital Investment Income

Production and Operation income

Income from daily hotel operations, including:

1. Room Revenue
2. F&B Revenue
3. MICE Revenue
4. Entertainment and other services (Spa, swimming pool, car rental, tour guide services, etc.)

Asset income

As real estate, hotels realize asset operation income through the following methods:

1. Long-term or short-term leases (such as leasing the entire building)
2. Sale and leaseback structure
3. Capital gains from property appreciation (future sale price difference)

Investment income

Some hotel groups or individual investors also obtain financial income in the following forms:

1. Equity dividends (such as equity participation in brand hotel groups)
2. Financial products (such as REITs, bonds) allocation income
3. Passive income from strategic cooperation or brand authorization

Why is “asset income” so important to hotel investors?

Double value creation:
Hotel investors not only focus on the hotel’s daily operating income (operating income), but also attach importance to the stable appreciation of real estate assets (asset income).

Measuring financial health: A stable asset-based income structure means that the hotel has both stable cash flow and risk resistance.

Optimizing financial and tax structure: Reasonable allocation of asset-based income types will help achieve better tax planning and capital operation efficiency.

For example, if you invest in a hotel located in a prime location in Malaysia, it may bring:

1. 7% fixed net rental income per year (asset rental income)
2. Monthly floating dividends from catering and room operating profits (operating income)
3. Transfer of properties at appreciated prices in the next 5 years to obtain capital gains (investment income)