Rating Manual section 6 part 3: valuation of all property classes

Section 885: residential training and conference centres

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

1.1 The description “residential training and conference centre” covers a wide range of properties, in size and quality. Typically, at the upper end of the market, these comprise a core of mansion or country house, with more modern additions for bedrooms and training facilities, in a quiet parkland setting, not too far from major road networks or airports. Consequently, the majority are located in the South East of England, especially within relatively easy reach of the M25.

At the other end of the scale will be smaller converted houses, probably run “in-house”, with dated facilities and often not in particularly good locations.

1.2 There are two main types of operators; specialist commercial providers, such as Style Conferences, Principal Hayley Conferences and Sundial Group, and major international and national companies, universities and institutions which own and operate training centres mainly for the benefit of their own staff.

1.2.1 Commercial Training Centres

Specialist commercial providers will normally operate the best quality centres, in locations convenient for attracting a wide range of clients. The standard of facilities at the best centres will be similar to that found at 4 star hotels. However, due to only having a C2 planning use, and the decision to dedicate themselves to provision of conference and training facilities, residential training centres are mainly “5 day” a week operations, and maximum use is restricted to about 10 months of the year (i.e. outside school holidays). As a result bedroom occupancies are lower than those for hotels – typically around 50% on an annual basis.

Although bedroom occupancy may be low, compared to a four star hotel, profit margins will generally be higher. This is because a commercial residential training centre benefits from having “high visibility” of guest requirements; the manager knows how many people will be staying, how long for, how many will be eating, when and what they will be eating etc. considerably in advance of the actual training or conference event; there are longer booking lead-in times. They can therefore plan for exact, known numbers of guests by, for example, opening the restaurant and bar(s) for shorter hours (compared to a hotel), staffing up for that shorter period and for a known number of diners, ordering food ingredients for a known number of diners etc., giving much greater efficiency compared to a hotel.

Commercial conference providers ideally will want a broad range of clients, across a range of industries, to guard against a downturn in any particular company or industry. However, some major clients with a large on-going training requirement are “locked “ into mutually beneficial long-term contracts, where a large part of the centre can be taken over by one company. Though income from such contracts is likely to be lower, this will be offset by reduced marketing and advertising costs.

It would appear that there is a minimum size for a commercial operator of about 50 bedrooms, and that most have between 50 and 150 bedrooms. The few commercial centres with more than 150 bedrooms, located in areas of high demand, appear to trade exceptionally well and benefit from considerable economies of scale.

1.2.2 In-house Training Centres

In-house residential training centres tend to cover a much wider range of property types, locations and sizes than commercial centres, and the overall quality will be much more variable. Often these are still used for partly historical reasons and facilities are becoming dated. An example is that many in-house centres have small single bedrooms (sometimes not even with en-suite facilities); the expectation is that bedroom accommodation be at least basic three-star hotel standard if not better – with a reasonable sized double, en-suite bedroom. Centres with much less than 50 bedrooms appear to be too small to operate as commercial centres, and are therefore generally in-house operations.

In some cases an in-house training centre may actually be run by a commercial provider (eg Style Conferences). In such cases the owning company benefits from not being involved in the day to day running of the centre, and the commercial provider will receive a management fee.

2. List Description & Special Category Code

Primary Description Code: EX

List Description : Residential Training Centre and Premises

Scat code 286, suffix S

3. Responsible Teams

This is a specialist class of property, to be valued by Specialists in each Business Unit.

4. Co-ordination

The Class Co-ordination Team has overall responsibility for the co-ordination of this class. The team are responsible for the approach to and accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers have a responsibility to:

  • follow the advice given at all times
  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
  • seek advice from the co-ordination team before starting any new work

5.1 Planning Use Class

Normally the planning use will be Class C2 – “Residential Institutions.” Provision of residential accommodation in this Class is limited to association with the main use in the remainder of the building, i.e. the provision of training and conferencing. However, at weekends a number of properties cater for other functions, especially weddings, where residential use is allowed only in connection with the function. Casual function use will be unlikely, unless this is linked to companies or individuals who regularly use the Centre for its’ main purpose. Use as a hotel, where guests use only the bedrooms and restaurant etc., is not permitted under this Class.

Sometimes residential training centres operate under a C1 (Hotel) planning use, which permits them to let spare bedroom capacity as hotel rooms, and to maximise weekend function trade. It would, however, be very unusual for there to be significant hotel use, as one of the main marketing points of a residential training centre is the fact that it is dedicated to training and conference users, with no distraction resulting from catering for a wider guest profile, as with a hotel. Some operators, to maximise turnover at times when the usual Clients are on holiday, will perhaps make their properties available as a Summer School, e.g. for use by the Open University. It is expected that profitability will be lower for these users, and is unlikely to be pursued by the major commercial providers.

5.2 Licensing

Operators will need to adhere to the provisions of the Licensing Act 2003 as appropriate to the offer provided by their business model.

6. Survey Requirements

6.1 Residential Training Centres should be measured to NIA in accordance with the VO Code of Measuring Practice for England and Wales.

In addition, a note should be made of the following:

  • numbers of bedrooms, type, size, facilities
  • number of restaurant covers
  • additional facilities, e.g. bars, conference, leisure, shops, together with details of any agreements, franchises or sub-lettings
  • AA, Visit Britain or Visit Wales star rating/classification where available
  • tariff & any discounts available
  • occupancy rates
  • type of trade where additional to conference/training
  • details of any Premises Licence (available from the local Licensing Authority) including the permitted hours and any conditions imposed
  • location
  • site and building layout
  • number of lifts and floors served
  • car parking provision

6.2 Letting Accommodation and other Revenue Earning Space

Accommodation should be expressed in terms of Double Bed Units (DBUs), Equivalent Double Bed Units (EDBUs) and Adjusted Double bed Units (ADBUs) in accordance with the approach adopted for hotels as detailed in Rating Manual Section 6 - Part 3 Section 510, paragraph 6.2.

7. Survey Capture

All plans, surveys and checklists should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

8. Valuation Approach

8.1 Rental Method

Reliable rental evidence for residential training centres is likely to be extremely limited. Details of any known rental information should be provided to the Class Co-ordination Team. Rental evidence for commercially operated centres should be analysed as a percentage of fair maintainable trade.

In the absence of sufficient rental evidence to support a valuation scheme derived solely from that evidence, full receipts and expenditure analysis of commercially operated centres should be carried out to inform the basis as outlined at 8.2.

8.2 Shortened R&E (Receipts & Expenditure) Method of Valuation

From the 2005 Rating Lists onwards a scheme of valuation has been agreed. Central discussions with the agent representing the leading operators have taken place and these have resulted in the agreed valuation schemes.

On each occasion accounts for a sample of different residential training centre types have been analysed, and the limited rental evidence considered, in arriving at the scheme of valuation. The schemes are based on the relevant star-rated/chain operated hotel scheme with various uplift factors incorporated to reflect the potential for greater profitability in the operation of dedicated residential training centres. Alike with the hotel scheme a single percentage is applied to the total Fair Maintainable Trade (FMT) to arrive at the RV. The percentage applied varies depending upon expected profitability, having regard to the type of residential training centre and its trading performance, as suggested by a number of indicators. These indicators are as specified in the Practice Note relevant to the revaluation in question.

The FMT should be ascertained by looking at three consecutive years annual receipts (if available), with the final financial year ending closest to the AVD (whether before or after). Each year’s receipts should be adjusted to reflect changes in the economy, price structures etc. as well as physical factors affecting the property, or its environment.

The Practice Note provides further guidance on this and on the factors that need to be considered when deciding on the appropriate percentage to adopt. In effect the schemes enable a shortened receipts and expenditure valuation. Evidence of value taken from application of the scheme should be used to value non-commercial centres by comparison. Care is required to ensure any disadvantages of location, facilities and size compared to those centres from which the evidence has been obtained (which will usually be primarily commercial centres) are properly reflected in the valuations.

8.3 Valuation Considerations

8.3.1 Location.

Dedicated training centres normally require a peaceful setting to enable delegates to relax and concentrate on the training/conference. Coupled with the need to be reasonably accessible to large business communities, and often to transport links to the rest of the country (and internationally) this results in the ideal venue being in a quiet, secluded rural position not too far from London, the M25, M1 and linking major roads, and/or major airports. Similar excellent locations will be found around other major cities such as Birmingham and Manchester.

8.3.2 Quality of bedrooms.

Conference and training users now expect accommodation of a standard similar to good 3 or 4 star hotels. Bedrooms in commercial centres will normally be all or mainly double (or twin) en-suite rooms, albeit they will still be used almost exclusively as single-occupancy rooms and may be below average in size, when compared to a typical double bedroom in a 4 star hotel. In-house properties will sometimes have a preponderance of small, single rooms and where this is the case it is unlikely such properties would be attractive to a commercial operator. At the bottom of the range, those properties where the bedrooms lack en-suite facilities, or are dormitories, will have a limited demand as training centres. Likely occupiers will be charitable or religious-type organisations, which should be reflected in the levels of value adopted.

8.3.3 Quality of meeting and training rooms.

The best properties will have a number of different sized rooms, including syndicate or small-meeting rooms, to cater for a range of training or conference requirements, possibly capable of sub-division by sound-proof partitions. Room layout should be regular, with good natural light, and some or all of the training rooms in the best centres will be fully-air-conditioned. There should be sufficient, convenient break-out space.

8.3.4 Ratio of training space to bedrooms.

Analysis shows a typical range of between 7.5 and 17.5 m2 of training space per bedroom. Significantly more than this may indicate an excess of training space, although care will be required that this isn’t because of significant non-residential conferences or training, or some other reason.

8.3.5 Layout.

Many newly built or converted centres are effectively under one roof, with internal links between the bedrooms, training rooms and dining and bar facilities, and clearly this is beneficial. It is not essential, however, and some of the larger centres effectively have two or more separate complexes on the same site. Also, some operators aiming at the very top of the market provide small, separate bedroom and meeting blocks, for example in former lodges to the manor house, to enable small groups of people to meet in privacy well away from the main centre.

8.3.6 Economies of scale.

Commercial centres of more than 150 bedrooms may be valued at a higher percentage in the range than smaller centres. As well as economies of scale, larger centres are able to be more flexible in the number and type of training events and conferences they cater for. Similarly, large in-house centres of similar quality should also be valued at a higher level. Conversely, smaller centres with less than 40 bedrooms are likely to have a limited market and be relatively more expensive to operate.

8.3.7 Analysis of accommodation receipts.

Care needs to be taken in analysing accommodation receipts, as the figures provided will be an internal apportionment of an overall charge, and different operators apportion these figures differently.

9. Valuation Support

The Excel spreadsheet valuation programme first developed for valuation of this class for the 2005 Rating Lists should also be used for 2017. This is supplemented by a separate computation screen which enables appropriate adjustments to be made to the relevant hotel scheme basis.

The Class Co-ordination Team is available to provide guidance and support on the use and application of the spreadsheets.

Practice note: 2017 - Residential training and conference centres

1. Market Appraisal

The two main specialist conference and training providers Principal Hayley and De Vere Venues were acquired by Starwood Capital Group in 2013 and 2014 respectively. All now trade under the Principal Hayley Training Venues banner. In early 2015, Starwood announced plans to dispose of some of these sites as part of a programme of consolidation.

Historically, training centres operated on a 4/5 day week, closing Friday to Monday. Most now have planning consent for hotel (C1) use. The trend to operate more akin to standard fully serviced hotels has continued with venues operating 7 days a week, trying to attract weekend leisure business. Location can sometimes prove problematic for this source of business and very often attractive rates have to be offered. Generally, training courses and conferences remain the primary source of business, but for many the trading profile has moved more towards that of a standard hotel. Most of the major corporate venues have moved away from traditional perceptions of a residential training centre offering basic accommodation with single bedrooms very often not en-suite and now offer good 4 star standard facilities with modern sophisticated technology. This brings them in to more direct competition with hotels, even the budget operators.

The sector suffered badly between 2007 and 2010 as many firms cut back on their training needs and conferences. Revenues generally fell, dramatically in some cases. The years since 2010 have seen improvement in the sector with revenues generally showing year on year growth. There can be wide variances, but revenues are generally back to about 2007 levels, some higher and some lower. Venues often have to offer attractive rates to bring in leisure business and whilst this maximises trading potential, the ‘new’ sources of income do not necessarily convert at the same profit levels as the traditional training courses and conferences. Costs have increased and the sector, like hotels, has been impacted by the growth of on-line booking agencies. Increased costs and changed trading profiles have hit conversion rates / profitability levels.

Poorer, out-dated centres have fallen behind the market in terms of attracting corporate business where expectations in terms of accommodation and facilities are now much higher. Where retained, these may only attract in-house operators. Within the non-commercial arena charities and publicly funded organisations continue to provide small-scale centres, but increasingly funding is becoming more and more uncertain.

2. Changes From the Last Practice Note

There have been no changes to the main principles of the 2010 valuation scheme, the valuation approach has purely been updated to reflect the current market dynamics of the sector.

3. Ratepayer Discussions

The approach to the valuation of commercial centres has been agreed with the agent (Gerald Eve) representing the leading operators. This references the star-rated/chain-operated hotel scheme of valuation which itself has been revised and agreed for the 2017 Revaluation. See RM Section 6 - Part 3 Section 510.

4. Valuation Scheme

4.1 General

Alike with the hotel scheme a single percentage is applied to the total Fair Maintainable Trade (FMT) to arrive at the RV.

The FMT should be ascertained by looking at three consecutive years annual receipts (if available), with the final financial year ending closest to the AVD (whether before or after). Each year’s receipts should be adjusted to reflect changes in the economy, price structures etc as well as physical factors affecting the property, or its environment.

Evidence of value taken from application of the scheme should be used to value non-commercial centres by comparison. Care is required to ensure any disadvantages of location, facilities and size compared to those centres from which the evidence has been obtained (which will usually be primarily commercial centres) are properly reflected in the valuations.

4.2 Adjustments to the Hotel Scheme

In order to bring the more profitable trading profile of commercial residential training centres (RTC) into line with that of star-rated hotels, so that the hotel scheme can effectively be applied, the following adjustments need to be made.

4.2.1 Room Hire

Room hire charges are expressed separately in RTC trading accounts and since these are normally a significant proportion of the total income, they will act to distort the proportion shown to be derived from accommodation receipts. Given that these charges are highly profitable the effective accommodation proportion requires to be adjusted upwards by importing a more typical level of room hire income i.e. 10%.

4.2.2 Level of Accommodation Receipts

A further consequence of the room hire element is a distortion of the absolute level of accommodation receipts per double bed unit, which in part may also be affected by the internal apportionment practice of the individual operator. To account for this the actual accommodation receipts per dbu need to adjusted upwards by a factor derived from the adjustment at 4.2.1.

4.2.3 Reference to the Hotel Scheme

The adjusted proportion of total receipts from accommodation and the level of accommodation receipts calculated at this stage are then used in applying the appropriate quality sector of the hotel scheme. The usual physical characteristics and other factors affecting the positioning of a hotel in the corresponding range of percentages to RV will also apply to RTCs. Additionally the valuation considerations more specific to RTCs, as described in the main Rating Manual section, need to be considered.

4.2.4 Overall Profitability Uplift

A final adjustment to the percentage to RV produced by the above is made to reflect the different operating model of the RTC. For 2017 an uplift factor of 1.10 has been agreed.

Situations may be encountered where the particular RTC operation has been developed over time to align more closely with that of a standard hotel. In these circumstance it may not be appropriate to apply this final uplift.

4.2.5 RV Calculation

The adjusted percentage to RV resulting from this series of adjustments is applied to the FMT to produce the rateable value.

4.3 IT Support

An Excel based computation screen, which enables these adjustments to be made easily, is available through the Class Co-ordination Team.

Practice note: 2010 - Residential training and conference centres

1. Co-ordination

Residential Training & Conference Centres are a Specialist Rating Unit (SRU) class. Responsibility for ensuring effective coordination lies with the SRUs. For further information see RM: Section 6: Part 1.

Special Category Code 286 should be used. As a SRU class the appropriate suffix letter should be S.

2. Scope of Practice Note

This Practice Note deals solely with residential training & conference centres, and does not include the following classes:

Civil Ceremony, Wedding and Function Venues Scat Code 075 SRU/Group responsibility see RM: V5: S285
Field Study, Activity and Adventure Centres Scat Code 099 Group responsibility, see [RM: Section 6: Part 3 S125](https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-125-guest-houses-and-bed-breakfast-accommodation)
Training Centres (Non-Residential) Scat Code 285 Group responsibility
Police Training Colleges Scat Code 428 SRU class valued on Contractor's Basis.
Residential Religious Retreats/Study Centres Scat Code 431 Group responsibility, see [RM: Section 6: Part 3 S515](https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-515-hostels-outdoor-activity-centres-and-religious-retreats)

3. State of the Market at April 2008

The main specialist conference and training providers Style Conferences and Hayley Conference Centres who had invested substantially in extending, upgrading and acquiring new premises have been purchased by hotel operators (De Vere and Principal respectively) between 1 April 2005 and the antecedent valuation date (AVD). De Vere operate their residential training centres as De Vere Venues with increased emphasis on weekend leisure and function use having obtained planning consent for hotel (C1) use. Principal Hayley, the renamed group, operates similarly.

The dedicated conference and training centre market has been generally buoyant between AVDs, though turnover of commercial providers did not rise as strongly as in the previous 5 year period; the turnover of smaller, or less well-located centres often remained fairly static between the two AVDs. The venues that combine the best of 4 star hotels with sophisticated technology in a more focused environment have continued to trade successfully, wherever located, in the face of determined competition from hotel operators who have dedicated conference suites attached to hotels.

Some of the remaining “in-house” operators and other out-dated centres have continued to close. These often seek a buyer for an alternative use (normally residential).

Only the best located and run smaller commercial centres continue to thrive in an increasingly competitive market with the best getting better, and others staying still, or going backwards, or being sold on for alternative use. The poorer centres, often with single bedrooms and/or shared facilities are often run by voluntary organisations for in-house training or are training facilities for various outdoor and security training operators. Those centres where turnover has not increased, or increased at less than the RPI (17.8% increase between AVDs) are likely to have reduced profitability when increased staffing, energy and other costs are considered.

4. Valuation Approach

From the analysis carried out over several rating lists the trading accounts, of both large and small commercial operators, have been analysed in terms of main space (ITMS) and as a percentage of turnover. The results show that the profit margins of commercial residential training and conference centres are generally higher than for equivalent four-star hotels, although the top line receipts may be lower. The accounts analysis also suggests that centres with more than 100 bedrooms, located in areas of high demand, achieve significant economies of scale and therefore higher profit margins than centres of 50 – 75 bedrooms.

A limited number of rents were also analysed ITMS.

The valuation approach should be by way of applying a “main space rate” to the area ITMS. Additions should be made for ancillary buildings such as workshops, garages etc, at an appropriate rate. The rates adopted should be based on rates derived from analysis of accounts and rents. These figures should be used to inform the valuation of non-commercial and owner-occupied centres where no meaningful accounts are available. Care should be taken to fully reflect differences in quality, layout, size and location between centres.

There is no doubt that good quality commercial residential training and conference centres achieve higher operating margins than the best 4 star Hotels. This is achieved by a different operating model from an hotel. If resort is had to valuing on a percentage of Fair Maintainable Trade (FMT) valuers should be mindful that the percentage to be adopted should be higher than that indicated by the relevant hotel scale (see RM Section 6 - Part 3 Section 510: PN1 2010 and appendices) to reflect the higher profit margin found in residential conference centres. Care also needs to be taken in analysing accommodation receipts, as the figures provided will be an internal apportionment of an overall charge, and different operators apportion these figures differently.

5. IT Support

The Excel spreadsheet valuation programme developed for valuation of this class for 2005 should also be used for 2010. This should be stored on the SRU ‘R’ drive, and all valuations should be carried out using the ‘2010 RTC Valuation Programme’. Guidance on its use is found on a notes page within the application. It is expected that this spreadsheet will be added to the Non Bulk Server prior to the defence of the 2010 Rating List.

Practice note: 2005 - Residential training and conference centres

1. Co-ordination

Residential Training & Conference Centres, as a Class, are the responsibility of SRUs, who will ensure effective coordination.

Special Category Code 286S should be used. As a SRU class the appropriate suffix letter should be S.

Scat Code 075S (Conference Centres in Country Houses) is obsolete and should no longer be used.

2. Scope of Practice Note

This Practice Note deals solely with residential training & conference centres, and does not include the following classes:

Field Study, Activity and Adventure Centres Scat Code 099 Group responsibility
Training Centres (Non-Residential) Scat Code 285 Group responsibility
Police Training Colleges Scat Code 428 Still an SRU class, but valued on Contractors Basis.
Residential Religious Retreats/Study Centres Scat Code 431 Group responsibility

3. State of the Market at April 2003

In recent years, specialist conference and training providers such as Style Conferences and Hayley Conference Centres have invested substantially in extending, upgrading and acquiring new premises. Management contracts have also been agreed, extending their involvement in this sector. Despite this additional supply, and determined competition from hotel operators who have sometimes built their own dedicated conference suites attached to hotels, the dedicated conference and training centre market is generally buoyant. Turnover of commercial providers often rose significantly after 1998, and, even though 2002 in particular was a difficult year given the downturn in spending on conferences and training in the wake of general economic uncertainty, profit levels still appear very healthy.

On the other hand, some “in-house” operators are faced with out-dated centres in need of substantial investment to bring them up to modern standards. As a result, a number have decided to out-source their training requirements to one of the specialist providers. A number of former in-house centres have therefore become vacant and have either been sold or are on the market, often seeking a buyer for an alternative use (normally residential).

Many dedicated venues successfully combine the best of 4 star hotels with sophisticated technology in a more focused environment. The move towards better bedroom accommodation can be seen in commercial centres where at least one has replaced small, single study-bedrooms with larger double rooms to a good 3 star hotel standard. In other cases, both commercial and in-house, internal bedroom layouts have been re-arranged to provide larger double (though still generally single-occupancy) rooms, often with a loss in overall room numbers unless an additional bedroom block is built at the same time.

Smaller, individually run commercial centres, with low investment levels, may find that competition has forced down tariffs and occupancy levels; the market has widened, with the best getting better, and others staying still, or going backwards, or being sold on for alternative use.

4. Valuation Approach

A significant number of trading accounts, of both large and small commercial operators, have been analysed in terms of main space (ITMS) and as a percentage of turnover. The results show that the profit margins of commercial residential training and conference centres are generally higher than for equivalent four-star hotels, although the top line receipts may be lower. The accounts analysis also suggests that centres with more than 150 bedrooms, located in areas of high demand, achieve significant economies of scale and therefore higher profit margins than centres of 50 – 125 bedrooms.

A limited number of rents were also analysed ITMS.

The valuation approach should be by way of applying a “main space rate” to the area ITMS. Additions should be made for ancillary buildings such as workshops, garages etc, at an appropriate rate.

The following points should be born in mind when deciding upon the ITMS rate to apply:

  • Location. Dedicated training centres normally require a peaceful setting to enable delegates to relax and concentrate on the training/conference. Coupled with the need to be reasonably accessible to large business communities, and often to transport links to the rest of the country (and internationally) this results in the ideal venue being in a quiet, secluded rural position not too far from London, the M25, M1 and linking major roads, and/or major airports. Similar excellent locations will be found around other major cities such as Birmingham and Manchester.

  • Quality of bedrooms. Conference and training users now expect accommodation of a standard similar to good 3 or 4 star hotels. Bedrooms in commercial centres will normally be all or mainly double (or twin) ensuite rooms, albeit they will still be used almost exclusively as single-occupancy rooms and may be below average in size, when compared to a typical double bedroom in a 4 star hotel. In-house properties will sometimes have a preponderance of small, single rooms and where this is the case it is unlikely such properties would be attractive to a commercial operator. At the bottom of the range, those properties where the bedrooms lack ensuite facilities, or are dormitories, will have a limited demand as training centres. Likely occupiers will be charitable or religious-type organisations, which should be reflected in the levels of value adopted.

  • Quality of meeting and training rooms. The best properties will have a number of different sized rooms, including syndicate or small-meeting rooms, to cater for a range of training or conference requirements, possibly capable of sub-division by sound-proof partitions. Room layout should be regular, with good natural light, and some or all of the training rooms in the best centres will be fully-air-conditioned. There should be sufficient, convenient break-out space.

  • Ratio of training space to bedrooms. Analysis shows a typical range of between 7.5 and 17.5 m2 of training space per bedroom. Significantly more than this may indicate an excess of training space, although care will be required that this isn’t because of significant non-residential conferences or training, or some other reason.

  • Layout. Many newly built or converted centres are effectively under one roof, with internal links between the bedrooms, training rooms and dining and bar facilities, and clearly this is beneficial. It is not essential, however, and some of the larger centres effectively have two or more separate complexes on the same site. Also, some operators aiming at the very top of the market provide small, separate bedroom and meeting blocks, for example in former lodges to the manor house, to enable small groups of people to meet in privacy well away from the main centre.

  • Economies of scale. Commercial centres of more than 150 bedrooms may be valued at a higher percentage than smaller centres, all else being equal; this will devalue to higher RVs/m2 ITMS. As well as economies of scale, larger centres are able to be more flexible in the number and type of training events and conferences they cater for. Similarly, large in-house centres of similar quality should also be valued at a higher rate ITMS. Conversely, smaller centres with less than 40 bedrooms are likely to have a limited market and be relatively more expensive to operate.

There is no doubt that good quality commercial residential training and conference centres achieve higher operating margins than the best 4 star Hotels. If resort is had to valuing on a percentage of FMR, the percentage to be adopted should be significantly higher than that indicated by the relevant hotel scale (see RM : S6 : P3 : S 510 : PN 1 2005 : Appendix 1). Care also needs to be taken in analysing accommodation receipts, as the figures provided will be an internal apportionment of an overall charge, and different operators apportion these figures differently.

5. Spreadsheet Application

An Excel spreadsheet valuation programme has been developed for valuation of this class for 2005. This should be stored on the SRU ‘R’ drive, and all valuations should be carried out using the ‘2005 RTC Valuation Programme’. Guidance on its use is found on a notes page within the application.