Managing the operations of an entire hotel can be an incredibly complex task to undertake. There are countless aspects of maintaining a successful hotel, and there are even more details involved in putting that hotel on the market. By breaking up the necessary tasks into manageable sections, the process becomes easier and frankly less of a hassle. Additionally, assigning certain tasks to experienced professionals allows hotel owners the freedom of movement they need to make their business or the selling of that business a success. In order to simplify the process even further, we’ve created a list of tips for hotel owners which details the best way to divide up responsibilities, and make your business operations run more smoothly.
First Impressions Are Everything
Simply put, in order to sell your hotel, you’ll need to package it in a way that makes it desirable for buyers. This does not mean you’ll need to shell out a bunch of cash to update a property you don’t even want anymore. What it does indicate is a need for some surface polishing. Buyers are not just looking at the hotel from their perspective, but of that of their future guests. When trying to sell your hotel, it should look better than it ever did. Maintain the landscape, even if there are no guests and if there are, do your best to ensure that they appear to be enjoying their stay. Your guests may become your buyer’s guests, so giving them a reason to return lets potential buyers know that the property they’re interested in is thriving and will be lucrative for them in the future.
White Glove Your Way Into Making a Sale
When interested in acquiring a hotel, most buyers prefer to spend a couple of nights in it. The psychology behind this is simple. Why buy a hotel you wouldn’t sleep in? It is possible that they may even book a room on different occasions without your knowledge. In order to ensure your potential buyers only see your hotel at its absolute best, your cleanliness requirements should be doubled as soon as you decide to sell. Common areas should especially be maintained, as they are the most prone to collecting debris. Additionally, staff should be instructed to redouble their efforts when cleaning rooms and taking care of the linens. Making these changes after buyers are interested is pointless, because they have likely already slept in the hotel. By getting out in front of any cleanliness issues, you can avoid losing opportunities for a sale.
Invest in Major Repairs
Though a few leaky pipes or an out of date air conditioning system might not ruin your chances at making a sale, certain more serious issues definitely have the potential to. Before putting your hotel on the market, contact a building inspector to learn of any serious problems prior to allowing buyers in for viewings. Frayed electrical wires, outdated sewage systems, and structural issues are all immediate red flags. Determine what issues can be simply repaired, and which should be replaced, as replacements can often be less expensive than extensive repairs which may not even last very long. Though you may consider making the repairs to be a waste of money for a property you are seeking to sell, it should be noted that most buyers will insist upon extensive repairs being carried out prior to purchasing, or may even ask for a reduction in price as a result of the property being in disrepair. Additionally, brand new electrical, sewage systems and other replacements may even help you to increase your asking price if other hotels in the area are still operating using the older systems.
Be Proactive About Paperwork
When buyers express a real interest in your property, do not make them repeatedly ask for revenue statements, borrowing details, or other pertinent financial documents. These statements are all indicators of your hotel’s functionality and as such are an indication of the value of the property you are attempting to sell. Being able to provide recent copies of balance sheets, bank statements, and even customer satisfaction metrics do nothing but prove the worth of your hotel. These documents will need to be provided to the buyer anyway, so coming up with them early and without prodding only endears you and your property to those interested in it.
By that same token, do not be afraid to ask for any important details about the buyer as well. Believe it or not, there are plenty of people who will claim to have an interest in your property but have no intention of signing on the dotted line. In order to ensure you do not waste your time catering to someone who is not a true buyer, do some research on anyone who makes an inquiry prior to entertaining them with any of your time. A quick google search of a person’s name can reveal much about their property holdings. Additionally, most records regarding property ownership and taxation are part of the public record.
There are professionals available to help with all facets of the selling process. From determining the actual value of your hotel, to obtaining details about potential buyers, consulting with someone who has experience in selling commercial properties can only help you in the long run. To get the best price possible, and to have a realistic idea of the entire selling process, it is vital to have someone on your side who knows the ins and outs of the commercial real estate business.
The process of selling a hotel can be lengthy and somewhat aggravating, especially to an unseasoned seller.