The Role of Assurance Services in Hotels

Assurance services aren’t something most hotel owners wake up excited about. If anything, they’re often seen as just another hoop to jump through. However, audits and reviews are a necessary part of running a hotel, mainly because banks and lenders require them.

If you own or manage a hotel, you know how important it is to reinvest in your property—upgrading rooms, adding amenities, or even expanding to a second location. The catch? Hotels tend to carry a lot of debt to make that happen. Since banks take on a fair amount of risk when financing hotels, they often require reviewed or audited financial statements to keep everything in check.

Assurance services can make it easier to secure financing, explore mergers or acquisitions, and generally keep your financial house in order.

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Why Do Hotels Need Assurance Services?

Unlike some businesses that can get by with in-house bookkeeping, hotels typically need third-party assurance services for one main reason: they’re highly leveraged. Banks and lenders want to see reviewed or audited financial statements before approving loans or refinancing existing ones. This is true whether you run a boutique hotel or a large resort.

Having reviewed or audited financial statements makes it easier to:

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What Assurance Services Won't Do

Assurance services aren’t a magic bullet for financial challenges. They won’t improve cash flow, boost revenue, or fix operational inefficiencies. If your main concern is identifying problem areas in your business, you might be better off with a more targeted approach—like an agreed-upon procedures engagement—instead of a full-blown audit.

However, what assurance services do offer is peace of mind. They add credibility to your financial statements and help ensure there aren’t any glaring mistakes that could cause issues down the road.

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Choosing the Right Assurance Provider

Not all assurance providers are created equal. Hotels have unique financial challenges, like seasonal fluctuations and multiple revenue streams, so you don’t want to waste time explaining the ins and outs of the industry to someone who doesn’t already get it.

When choosing an assurance provider, look for:

• Industry Expertise: Hotels operate differently than other businesses. Work with a provider who understands that.
• A Strong Track Record: Experience matters, especially when dealing with complex financials.
• A Personalized Approach: Every hotel is different. Make sure your provider doesn’t take a one-size-fits-all approach.

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The Bottom Line

If you own or manage a hotel, assurance services might not be at the top of your wish list—but they’re often necessary. Whether it’s meeting bank requirements, preparing for a sale, or simply ensuring your financial statements are accurate, a good audit or review can save you headaches in the long run.

SVA understands the complexities and unique needs of the hospitality industry. Contact us today to learn more about how our assurance services.