Hotel InterContinental in Prague – feasibility and project valuation

The primary objective of this bachelor’s thesis is to provide an economic assessment of the Fairmont Golden Prague hotel project, evaluating its profitability, the value of the property associated with the hotel’s operation, and the impact of different financing options. The thesis is divided into two main parts – theoretical and practical. The theoretical part covers fundamental investment evaluation methods, approaches to business valuation, specifics of the hotel market, and financing options, including mezzanine capital. The practical part focuses on the reconstruction project of the InterContinental Hotel and its transformation into a luxury operation under the Fairmont brand. It first examines the situation and development of the hotel market in the CEE region and then moves on to a detailed analysis of the hotel project based on projections of operational results, revenues and costs, internal investor data, and the current market environment. The thesis analyses projected key performance indicators and examines potential exit strategies for the investor in 2029, 2034, and 2050. The findings are also interpreted using the income approach and consider the impact of capital structure on investment returns. Finally, the project is evaluated from both a market and subjective value perspective for a family office investor.