Hotels provide a perfect solution to short term lodging and a great property investment. From one night stays, as part of a business trip, to weekend a getaways for two. The history of hotels has evolved year-by-year reaching back to the 17th century. Where we see the birth of the coaching inn. This paved the way for the modern hotel as we know it and great businesses.
The convenience you provide as an hotelier, often varies demanding upon your customer. We would like to think, the bureaucracy ends here. However, as hotel owner, you are well aware of the labyrinth of laws, regulations and codes to be considered.
This doesn’t end even when selling your hotel but can be made simpler, by following a few guidelines.
Making the decision to sell your commercial hotel is the hard bit. Now that’s over, it is essential that you make you next steps informed. As with all sales of leasehold and freehold commercial (Non-domestic) property, it is best practice to consider the following to sell safe and quickly, in a buyer’s market.
Any potential buyer is looking for the best price they can get. Remember it’s a buyer’s market. Therefore, maximise when the economy is expanding, but keep in mind, in a recession the buyer wares the trousers – as prices tend to fall. In any case, you don’t want to price too high and leave your property floating around in the market place gathering dust. Consider this period a wasted opportunity to sell your hotel.
Ask yourself, would I buy my hotel priced at its current market value?
Remember the paperwork
You may desire to provide basic information. Leaving it to the potential buyer to gleen any extra information they or their solicitor needs. However, taking that responsibility from the beginning can be attractive to buyers and save time. Either way, remember any mandatory documentation, such as an Energy Performance Certification
The more information prepared upfront, the better. Consider things such as:
- Usage class of the building
- Information about rateable value and rates payable,
- Costs for utility services
- Building surveys for fire, asbestos and for development
- Planning permissions
- Building plans
Management of systems
Whether you are looking to sell a hotel in London, Manchester Nottingham or even Scotland the correct management system is essential.
The right management in place can add value to your hotel and be deemed as an asset in the eyes a buyer or investor. Ideally this will also allow for a smooth transfer of the business, as the following considerations would have already been taken care of.
- Guidance for staff on their potential move to a new position
- How your staff that stay with the business, will deal with the efforts of a transition in management
- The conditions of staff contracts
- How long current employees worked for you
- Preference to keep your employees
- Management profiles
- Salary adjustments
- Recruitment of new members of staff?
Presentation and condition of existing premises
- For potential buyers and investors, nothing can be more off putting then an unprofitable business due to poor maintenance. Ask yourself the following questions
- Is there outstanding maintenance issues that can be resolved relatively quickly?
- How much refurbishment is to be carried out or even in the midst of being carried out?
- Does the kitchen, dining and leisure facilities need an upgrade?
- How does my rooms compare with other hotels in the market?
Get the Commercial Agent
Before selling your hotel, it is important to remember that commercial estate agents are not officially regulated. Therefore, many commercial agents do not belong to a professional governing body, such as RICS or the National Association of Estate Agents.
This may be the case, however fortunate for us, the UK Money Laundering Regulation 2007 does apply to estate agents. In addition, under Section 1 of the Estate Agents Act 1979 all estate agency must register with the HMRC. This means that hotel owners are protected against money laundering and can identify criminal activity sooner.
It’s still important to know your agent, ask yourself the following questions when selecting a commercial estate agent:
- What are their expertise?
- How competent are they to give advice?
- Will an experienced agent handle my information?
- Can they offer marketing to sell my hotel?
- What are their insurance policies like?
- How much support can they give?
Saying this, there is an alternative. The property buyer have the best way to sell a hotel and to do it quickly.