A large part of a hotel’s value lies in its flag. The intangible value associated with a franchise is exempt from ad valorem taxation in all 50 states. Tax assessors have over-taxed hotels for years without first removing the non taxable portion from their revenue because no one was able to calculate the intangible value created by the brands. The O’Connor Approach © is truly a major break-through for the hotel industry. O’Connor & Associates is the largest property tax consulting firm in the nation, 700+ professionals, representing 200,000+ properties, including thousands of hotels. O’Connor collects massive RevPAR data from hotels in every region. Utilizing a sophisticated software developed by O’Connor, the net increase in revenue associated with the flag after deducting franchise fees is determined. Removing intangible asset from market value reduces property taxes far greater than ever before. It has been proven successful across the country. O’Connor is changing the way Hotels are Taxed!
e.g. $120,000 reduction in property taxes directly increase a hotel’s bottom line by $120,000 which, in turn, raises it’s market value by about $1,500,000 at an 8% cap rate. O’Connor does not charge any upfront fees; owners keep a majority of the tax savings. O’Connor shares a percentage of tax savings to cover its costs, including legal fees. O’Connor teams up with attorneys in every state to pursue judicial appeals to maximize tax savings.
Business development is derived from selling the value of its brands which isthe basis of what the O’Connor Approach © is all about. Teaming up with O’Connor to promote the O’Connor Approach © is not only emphasizing the value of their brands but adding incredible value offered exclusively by O’Connor. Marketing fees from O’Connor bring a new revenue source.
Increasing the bottom line of managed properties enhance performance creditability and added significant value to new business development. When analysts make profitability analysis, using the O’Connor Approach © will support the use of lower property tax expenses and greatly enhance the profitability projection to owners and investors.
The O’Connor Approach does not reduce the market value of the hotel, it only separates non-taxable intangible asset values from taxable real and tangible properties for ad valorem taxation purposes only. In fact, by reducing estimated property tax expenses, the projected market value is significantly higher, which could lead to higher loan-to-value ratio.