Paying a visit to the business you are valuing is SOP during an engagement. But why not also visit competing firms? After all, you’re trying to assess the performance of your subject versus others in the market, so dropping in on rivals can yield some valuable information.

Numbers come alive: Speaking during a recent BVR webinar on valuing hotels, Mark Dayman (Franintel Inc.) says visiting competitors is a must in the hotel industry. Of course, this can be a good idea no matter what the industry. “Suddenly the quantitative information you’ve developed starts to take life,” he says. “You start to understand why your client performs better than the others within that market. You will also start to learn what is missing in the market that may be an opportunity for your subject entity. Those interviews are really important.”

Also, sometimes the firms that are initially considered competitors aren’t really competitors at all because of the nature of their operations. One way to weed these businesses out of the list is to visit them.

Open arms? Will competitors welcome you when you show up asking questions? “I must say it is relatively unusual that I am unable to speak with an owner or general manager,” says Dayman about visiting competing hotels. “You have to go in with a good attitude. But most owners and general managers are open to a discussion about their product and how they see competition in the marketplace, who they think the competition is, and why.” If management will not speak with him, he’ll seek out some knowledgeable staffer who’s willing to talk. “I will talk to the front desk manager just to get a handle on who their guests are, where they’re from, how long they are staying, who is competing with them, and so on.”