Abstract

DEMUNER FLORES, María del Rosario  and  LOPEZ ROMERO, Nancy. Hotels City Express valuation by the method of discounted cash flows. El periplo sustentable [online]. 2017, n.33, pp.56-80. ISSN 1870-9036.

In Mexico, the tourism is regarding as a growth factor, its contribution to the GDP specially comes from lodging services. Hotel industry is developed in a highly changeable environment where investors are driven to identify, analyze and establish strategies which furnish value in order to gain maximum economic profits. Businesses in the growth stage, record significant augmentation in their income, nevertheless these are more vulnerable to the market volatility, which impacts its share prices. In order to hold investors, the business shall prove its value creation; due to its featuring, DCF method turns to be the most ideal method. The aim of this research is to determine the value of a growing company in order to identify whether it is overvalued or undervalued. A quantitative, descriptive study was performed in order to determine the value of HCITY for 2014 with a projected period until 2024. The result revealed HCITY is undervalued by 38% in contrast to the market value. A higher value detonate confidence of investors which in the case of growth stage business is vital owing to more contribution neediness in order to reach a mature stage.

Keywords : Business valuation; hotels appraisement/valuation; growing businesses; discounted cash flow.

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