Occupancy and rate tell you about the last twelve months. Capital expenditure discipline tells you about the next ten years.
Hospitality performance is easy to summarise and easy to misread. Occupancy and average rate describe demand in a period; they describe very little about the condition of the asset producing it.
The more informative history is the capital expenditure record. A property that has deferred rooms refurbishment, plant replacement, or roof works through a strong cycle carries an obligation that will arrive irrespective of trading.
We reconstruct that record before underwriting: what was spent, on what, and against what remaining useful life. The gap between that figure and a normalised reserve is a real and usually material adjustment to price.
The same analysis works in reverse. An asset that has been properly maintained through a weak period is frequently better value than its trading record suggests.