How to Sell a Hotel for the Best Price

When it comes to selling any business, making the decision to sell and focus your efforts elsewhere is just the beginning of the process. There are several issues to consider when doing so, but sellers are most often concerned with getting the best price for their business. While you prepare to sell a hotel business, consider the following tips to ensure you get the highest offers possible.

How to Value a Hotel Business

Doing your research on comparable hotels is key when valuing a hotel business. In order for your listing to be successful, it needs to be appropriately priced for your market or area. Considerations when deciding to sell a hotel include, but are not limited to:

• Real Estate Value
• Property Value
• Projected Sales
• Replacement Costs
• Sales Comparables

Because there are a number of methods to value a hotel ranging from income capitalization approach to sales comparison approach, it is best to consult with a professional. An experienced business broker understands the most effective hotel valuation methods and will provide you with a broker’s opinion of value (BOV). A BOV will give you an idea of what your hotel will sell for based upon the broker’s personal analysis, industry expertise, knowledge of local markets and lending, and comparable past sales.

Preparing Your Hotel for Sale

Ultimately, your hotel business will only sell for as much as a buyer is willing to pay. By properly preparing your hotel for sale, you may improve the odds of receiving the desired asking price for your hotel.

Tidy Up Your Hotel

Your hotel needs to be in superior condition—both physically and financially to receive the highest offers. Getting a fresh coat of paint and making sure the landscaping is up to par is just as important as what buyers encounter when they crack open the books. Just like nobody wants to enter a disheveled hotel room, buyers don’t want to deal with any loose ends left over from the seller. This means that the seller should have their financial records in order, usually dating back at least 3 years, as well as address any PIP (property improvement plans) prior to putting the hotel on the market.

Be a Team Player

Selling a hotel involves more than just the seller’s needs. Once a buyer is interested in purchasing the property, it is your job as the seller to remain transparent and make sure the process goes as smoothly as possible. Although you are selling the property, banks require the seller to offer some amount of financing to the buyer. In other words, despite selling the hotel, the seller will still be invested in the property for years to come.

In addition to financial involvement, it is also your job as the seller to offer guidance to the buyer as to how to run the property successfully and get the transition off to a good start. The more successful the transition goes, the greater the return is on your investment in the new buyer.

Preparing to sell a hotel involves quite a bit of time and effort. Hiring a broker to do some of the heavy lifting and find you the best price for your hotel is a great way to take some of the stress and responsibility off of you. If you’re interested in selling your hotel and would like advice on how to receive the best price possible, contact the nearest Sunbelt Business Brokers! We’re the place to go to buy or sell a hotel business.