Purchasing a hotel can be a long and exhaustive process that begins with finding a location you wish to purchase in the first place. While you may do some work securing financing or attracting partners prior to finding the right location, the majority of that work will be done after you have decided on a specific property.
Like all purchases or investments, the more homework and advanced preparation you do, the smoother the process will be overall. This does not mean you won’t encounter obstacles and other difficulties, it just means the more prepared you are going in, the more likely you are to sail through any difficulties that arise. Here are 3 tips to help you create the best strategy for scouting a hotel.
Know What You’re Looking For
Perhaps one of the most crucial yet overlooked truths of almost any aspect of life is that you can’t get what you want until you know what you want. Too often people attempt to enter into the scouting process without having a clear picture of exactly what it is they are scouting for. Before you start feeling out possible investors, hiring an agent or putting together your financing, you need to know what it is you want to end up with when all is said and done. While you may not end up with exactly what you are looking for, the more clearly you know what that is up front, the more closely you will probably be to landing it. Here are some things to consider before starting your actual scouting.
- What size of property are you looking for? Are you looking for a small bed & breakfast or a sprawling Oceanside resort? Are you planning on managing or overseeing the property yourself or are you looking solely for an investment property that you hire someone else to run and manage?
- What type of property are you looking for? Are you looking for an individual hotel, a resort, a bed & breakfast or a selection of properties already associated with a larger chain?
- What type of clientele do you want to attract? Do you want to cater to the needs of luxury clients or are you more interested in a more moderately priced or budget friendly hotel? Do you want to attract business executives, families or young people?
Do Your Own Informal Research
The more people you get invested in the scouting process, the more taxing and time consuming it becomes. You can save yourself a lot of time and energy by simply visiting as many hotels as you can prior to formally “scouting.” You can visit as a guest or just stop in and look around. Take care to notice what you do and don’t like or what works and doesn’t work about every hotel you enter. Is the lobby area set up appropriately for the flow of traffic, with the front desk located conveniently in the space? Do you feel appropriately greeted or welcomed by the staff? What amenities do they offer and are those amenities used regularly by hotel guests? Is the decor warm, friendly, luxurious, opulent or inviting and is it appropriate to the kind of clientele the hotel attracts? Are the public areas light, warm, inviting, or dark and dingy? Notice things like lighting, sounds, scents, and even how you feel when you walk in the door or walk into a room. By the time you find an agent, you may have already found the exact property you want to try and purchase.
Choose the Right Agent
Understanding exactly what type of property you are looking for will help you find the right person to help you search for and obtain that property. There are a number of ways that the seller can make the buying process difficult, particularly if they are not highly motivated in the first place. Remember that sellers don’t have to sell you their property, nor do they have to sell it to you at a price you consider reasonable, or they may just not like you or your agent. If you are looking for a smaller property owned by a family or individual, you may want an agent that is good at developing personal rapport. On the other hand, if you are buying a property or number of properties from a high profile chain, you may want a more aggressive agent that will investigate every aspect of the deal to ensure you get the most for your money with no nasty surprises buried in a contract somewhere.