While most owners enjoy the position of prestige and responsibility that owning a hotel entails, there usually comes a time when they must consider selling their property. Unfortunately, most owners do not take full advantage of the process. Instead of casting an objective eye on the property, they remember it in its heyday or otherwise overlook its present faults.
Indeed, many owners feel that their property will sell for a premium without any real effort on their part. It is an egregious fault that, in the end, can cost some fairly serious dollars. Here are a few suggestions for creating a sound strategy for selling your hotel property that will maximize your financial gain while minimizing your aggravation:
Prep the Property
A hotel owner should be continually adding to the value of his property through proper maintenance and considered upgrades. A potential buyer will easily identify both and understand that the property has been well maintained. They will realize that there are no “ticking time bombs” of maintenance waiting for them after the closing. The end result? A higher closing price where the seller recoups his costs from both endeavors. Like the sage words of the Boy Scout motto states, “Be prepared.”
Utilize a Traditional Broker
Over the years, hotel brokers have developed an extensive network of buyers and sellers for these specific types of properties. In most cases, they are the most efficient way to sell your hotel as quickly as possible. Of course, they do cost money and the owner will have to figure their cost into the final price. But, just like when selling a private home, the seller gets what they pay for in terms of service, marketing and access to potential buyers.
Market with Social Media
The newest generations of hotel buyers often look to crowd source their decision to buy across several social media platforms including LinkedIn, Facebook, Pinterest and even Twitter. It is up to the owner of a property – or his broker! – to prepare the appropriate materials for distribution on these channels so that these technological buyers can obtain the information that they want. Seriously, a few well-placed pictures on Pinterest can be worth a thousand words on a traditional brochure and they are far more cost-effective.
Have your Financial Data Ready
A lot of negotiation will go on before you get down to the nitty gritty of the numbers. The potential buyer will visit, talk to your staff and maybe even stay a day or two to inspect the operation of the hotel. Nevertheless, the real deal making will occur once the numbers – revenue, costs and net profit – are inspected. Be sure to have these ready as well as your accountant or financial advisor on hand to explain them. Nothing imperils a hotel sale more than imperfect or incomplete financial data.
For more detailed information on creating a strategy for selling your hotel property, please visit us at The Passport Group. We can be found online at ThePassportgroup.com or you can reach us directly at 415.523.0393.