At what stage do you currently fall in the lifecycle of hotel ownership? If you are either seeking to sell or buy out a hotel or some other hospitality property, it is advisable that you check out for an industry professional to hold your hand. This means engaging the services of a professional hotel real estate broker whose primary purpose will be to even out the process by making it as incident free and insightful as possible. But given the innumerable number of self-proclaimed hotel brokers, how do you settle on one that guarantees tangible results? By performing a background check on all potential hires, especially laying more emphasis to these aspects.
Regardless of what deal you seek to settle or the nature of the industry, whenever you seek out professional help, you want it coming from someone with a rich base of industry know-how. The hotel industry is no exception. When scouting and vetting for a potential hotel broker, give the most experienced person the priority.
Given the complicated nature of the hospitality industry, some fine and important details, especially when performing a detailed due diligence of the hotel are occasionally missed. Such negligent acts later come to haunt the deal maker in terms of rehabilitation costs in case of purchase or missed profits, in the case of sales. It takes experience to master these loopholes and devise controls to ensure they are always put into consideration.
Apart from being in the field for quite some time, consider the number of hotel brokerage services the firm has championed and led to completion. Numbers don’t lie, and in most occasions, a high number of hotel brokerage deals a firm has managed to seal directly, translates to the firm’s competency.
While at it, also consider the firm with the highest number of high-profile brokerage deals mostly from high-end national and international hotels to examine the kind of reputation and respect the brokerage firm commands in the market. A good company not only has a solid company profile with a number of significant deals but also, averages well in the different markets.
Customer Satisfaction and Feedback
There is no better way to tell how reliable a broker is than by going through his client’s feedback and reviews. With almost every broker having a functional website through which they can be accessed, it has also become quite easy to review them by looking at their client’s feedback and reviews on such platforms. But this shouldn’t just be sufficient for you to form a judgment on the reliability and ability of the hotel broker to walk you through your current institution.
However, don’t just take the reviewers word on the site; go to an extra mile of verifying that a brokerage deal really did happen as reviewed. If it is possible, contact the reviewers to get further information on the broker. Alternatively, ask the broker to give you a list of different clients he has worked for and contact them.
You don’t want to go all the way to the entirety of this demanding process of hotel sale or acquisition just to realize how easily a piece of legislation can quash it, or it is declared voidable by the law courts upon completion. Such instances happen when your preferred broker hasn’t met all the necessary requirements for registration. They may also be barred by certain pieces of legislation from trading in a given market or against certain enterprises.
If they overlook any of these aspects, no matter how sweet the deal might have been, it stands voidable and can be nullified by any of the involved parties. If this happens, you not only get to lose time and your hard earned investments, but such an incident gives the other party ample time to reevaluate the deal and work on areas you planned to capitalize on.
By the time you are getting another broker, the deal will have changed, and the counter-offer will definitely not work to your favor forcing you to either settle for less than your original expectations or abandon it altogether. It is always important that you verify that your preferred hotel broker is properly licensed and authorized to mediate your deal. Such information can be obtained from the Department of the Registrar of companies.
Despite having a solid company profile and several years of experience in the trade, some hotel real estate brokers are not trustworthy. These brokers are pushed by the desire for money and will do just anything to pocket that extra coin even if it means going against your back. You always get to know them when in the course of your negotiations. You know such brokers by contacting their previous clients and examining reasons any of their brokerage deal ever flopped.
How much is the brokerage fee and how reasonable is it? Given that the pricing of brokerage fees remains largely uncontrolled and reasonable, so the back lies with you to weigh the benefits you stand to gain from the deal against the brokerage fee and identifying its reasonableness. Always go for the most reasonable price that won’t hurt your deal. The best way around this is coming up with a few of your preferred hotel brokers and comparing what they are to offer with their pricing mechanisms.
The role of a hotel real estate broker isn’t debatable when it comes to the sale or purchase of hotel property. Nevertheless, you have to be careful when choosing the right broker if your much-anticipated deal is to go on flawlessly. Check the experience as well as their authorization and registration of the potential broker before hiring them. Most importantly gauge their trustworthiness and integrity, from the reviews and feedback from their previous clients. Additionally, a good broker with the interest of their client at heart won’t impose exorbitant fees on the client that outweigh their benefits. Your ideal broker should fulfill these requirements as well as prove more of an asset to you by offering valuable advice and insights with regards to the deal on the table.