Before looking under classified ads for hotels for sale, you must first start by having an idea of your needs and expectations for your new business. The location, appearance, and structure of the property will all affect how to choose to move forward with the purchase. Looking at the history of the business is a good place to start, as well as potential ways to make it more profitable for you in the long run.
Speaking with an experienced attorney will offer detailed information and advice about a specific property after you have gone through a preliminary process of consideration. Check out the location well before deciding to buy there. A hotel is unique in the sense that business can be affected by so many different factors. If it is on the coast or by a beach, you may only get bookings during certain months once a year. In that case you may count on seasonal income whereas in a big city or town, you will want to be near businesses that travel and year-round tourist attractions. Also be careful of locations that are overpopulated or riddled with competition.
Experienced operators have an advantage in that they have established repeat clientele and are usually well known. Make a list of questions to be answered when looking at hotels for sale. That way, if they don’t pass the checklist, they won’t be worth considering. This step could save you a lot of time if you know what you’re looking for. Some of these elements could include staff members, food service options, how many rooms or guests on average, tenant demographics, and the Unique Selling Proposition for that hotel.
Two key ratios that are important to note include the revenue per available room (revpar) and the staff costs to turnover. These numbers can help you calculate how profitable the hotel has been in the past and how much you will be making potentially. You can also ask current ownership on their approach with the hotel to see if they have done anything new recently as far as management and/or renovations. The third major aspect of buying a hotel is the building.
It is necessary to first get a full survey and valuation taken, and also review the lease terms and conditions (if any) before moving forward with a purchase. Take a look at the physical condition of the rooms and public areas, making sure all fire and health regulations and codes are met. Check documentation for up to date licenses and everything you may need in order to make sure there is no more unfinished business on your part. A Real Estate Attorney can assist you by gathering all documents and information regarding the closing and offer any advice you may need for your new business venture. Contact us at Gulati Law and see how we can help you acquire a Florida Hotel!
Pic Credit: Wyndham Hotels