The preparation of a hotel for sale requires attention to innumerable details; everything from your Profit & Loss statement to the HVAC system has to be examined. Still, there are some tasks in the process that are more important than others. Here is a quick rundown on the ones a seller should focus on. Do not expect it to be easy but, with the right guidance, do expect it to be lucrative.
Update the Curb Appeal
Without a doubt, first impressions do matter. Potential buyers will start to size up your hotel from the first second they see it. Investing in updating the curb appeal is crucial. By marketing your property to your customers, you are also marketing it to potential buyers. It is a win-win situation.
Maintain General Cleanliness
Most buyers will want to spend a night or two in your hotel – on several different occasions and often without your knowledge – before making the purchase. It is essential that your housekeeping and maintenance staffs keep the place in A-1 condition. Repair issues should be addressed as soon as they arise. In addition, the common areas should be monitored in an on-going manner to ensure that they remain free of debris.
Repair the Infrastructure
Over time, sewer pipes may become clogged, electrical wires frayed and a whole host of other problems can develop. If history is any guide, these problems will manifest themselves at the worst possible times. Instead, consider engaging a building inspector to have the property thoroughly examined, and fix the problems before a potential buyer encounters them. After all, you will have to spend the money for repairs whether you sell the property or retain it. During this process, it is also a good idea to consider any upgrades that are needed. It is often just as cost-effective to replace old or worn-out items than to simply repair them.
Make Amenity Upgrades
The best hotels are constantly upgrading their amenities and rightfully so as they pay for themselves in added reservations and revenues. When trying to sell a hotel, there is no worse time to interrupt this winning formula. Updated amenities also indicate a general level of good maintenance and superior customer service – factors that will positively influence your buyer’s final offer. The best amenities to update include the pool area, the gym and in-suite hot tubs.
Invest in Technology
These days, marketing a hotel property involves more than simply assigning it to a hotel real estate broker. It is simply a fact of life that the current generation of buyers uses the internet to search and decide which properties to purchase. Partner with a firm that understands the value of using various media to promote themselves and your property.
Deliver Timely Financials
Do not kid yourself, a purchaser will want every detail of the company’s bank accounts and borrowings. Ensure that you can provide recent copies of your P&L statements, balance sheets and tax returns for the most current years. Buyers will also want to see your bank, credit card deposit and transient occupancy tax statements. It is simply part of the due diligence process of a buyer with any competence and cannot be avoided. Have no doubt, the lawyers will always make you prove the worth of the property on paper, no matter what it looks like in reality. To be blunt, no matter how pretty your property appears, the financials are the real essence of the deal and will finally persuade a buyer to buy.
Investigate the Buyer
On a contrary note, the seller should also check out the credentials of the buyer. No one wants to waste time so a little investigation into the experience and credit of a potential buyer is time well-spent, especially if it saves weeks of wasted time dealing with a financially unsound buyer. Place this responsibility in the hands of the selling broker because they are able to provide a less intrusive environment when dealing with the potential buyer.
Get Professional Advice
A simple starting point is to get an opinion of value. With that number in hand, you can then confidently approach a real estate professional to market the property. A final caveat – remember that the property is your asset and no one will value it as highly as you. Take your time in the sales process and you will ultimately garner as much value as possible.
As you can see, selling a hotel property involves numerous preparatory steps. While the task may seem daunting, the advice of a professional Hotel Real Estate Broker can go a long way in easing the process. We would love to help.