Please find our updated analysis of Tele Columbus here.
Are investors calculating off the right base? If you calculate your capex required to upgrade normal hotel rooms so that more travellers choose your hotel over others, you'd come up with a small number. A few extra amenities will do. However, it turns out the same is not true for convincing inmates. Once you allow inmates to choose among hotels, they will not choose based on their cell, but compared to other hotels available, and converting the prison into a competitive hotel is a larger relative capex outlay than adding a minibar and wifi.
Sounds trivial, but the generalised economics we hear thrown about that reason on ratios and averages just don't seem to apply to a hostage situation where there is more ground to be made up underneath the sheer numbers. Relative to TC's current shape, we might just need a lot more cash than shorthand economics would usually prescribe.
