this type of case question has been asked many times on the Q&A, and again - this is a typical strategic decision - you can easily translate it to a number of different contexts, but the principles upon which you base your approach should always remain the same!
1. Core Question: "Should the client invest into building the hotel?"
2. Identify criterion to make this decision: If income ("value") is the objective (to be verified in clarifying questions), then the additional value we can create over the client's investment horizon has to be significantly higher than the investment cost. Moreover, the risks need to be manageable.
3. Compile base information: costs of building the hotel / yearly operating cost of the hotel if built / yearly income (revenue) from the hotel / potential adjacent income streams / investment horizon of client
4. Deep dive into the value bucket by means of a profitability tree: what are the levers of value here? Compare Scenario A (building the hotel) to Scenario B (not building the hotel and investing into best alternative) in terms of profit
5. Calculate annual value (delta between Scenario A and B). If building the hotel indeed gives you higher expected income, then divide the initial investment cost by this additional yearly income. This gives you the break even point (point in time after which the investment becomes profitable). If this point comes earlier than the investment horizon, then this is a beneficial investment and the client should proceed with the purchase (purely based on financials).
6. Don't forget to compile potential risks and mention them in your summary