The base for Pandox’ vision, strategy and choice of business model are the value-growth chain in a hotel property. This can be divided into ten different parts:
1. Macro-economy
The level of activity (global, regional or local) constitutes an important component for how demand shall be developed within the hotel market. Macro also influences the direction of the economy, which implies that one can choose different points in time to enter a specific market.
2. The hotel economic cycle
A part of the macro-economy can be divided into five different phases: downturn, lower pace of downturn, level-out, growth and peak. With knowledge of the pattern of a hotel economic cycle, one can exploit each situation by investing in different geographic markets and endeavouring to limit the risk in the markets that have poorer outlooks.
3. Location and size
Two important factors are that hotels have strong locations and that they have the right size to contain a critical volume and thereby good preconditions for profitability.
4. Competition – new capacity – different market positions
Each market is unique and deep knowledge of the local conditions is required in order to create a product that provides sustainable profitability.
5. Brand name
A strong brand name strengthens the hotel’s market position and competition in the chosen product segment.
6. Operational issues and management
Hotel operations are complicated and require a high level of expertise, active presence and strong leadership. A good local hotel team creates both satisfied customers and employees as well as high profitability.
7. Investments
A hotel must be constantly developed in order to maintain a strong market position.
8. Asset management
The hotel industry is capital-intensive and specialist expertise is required within both the hotel and property operations in order to effectively take care of and develop the properties.
9. Contract/agreement structure
The hotel industry has many forms of contracts and agreements, which influence a hotel’s profitability, financing and value growth. In general, a contract or agreement should contain mutual incitements so that the parties work for the same objectives.
10. Financing and taxes
The choice of financing and legal structure is a key issue that creates preconditions for stable value growth.