It’s no question that the pandemic has hit the travel sector – including full-service hotels and motels, Airbnbs, and even RV/camper travel – hard. That being said, the hospitality industry as a whole is expected to make a gradual return as travel regulations lessen. But, unfortunately, this return won’t be a straightforward process for most. Instead, as it’s been for the past year and a half, current owners will have to continue being adaptable and reinventing the wheel, which can be challenging for even the most visionary entrepreneurs. This might not be very desirable for you, especially if you’ve already contemplated exiting your business.
The buyer pool is there, but you have to be strategic in approaching these interested candidates. Before you sell a motel during COVID-19, here are some considerations you’ll want to make.
Some industry experts predict the travel industry to reach pre-pandemic levels as early as 2022. Although you may not be eager to continue riding out the storm, many prospects are looking for what they perceive to be investment opportunities.
However, it’s important to keep in mind that it has become more challenging to obtain financing from lenders to purchase a motel, especially for first-time buyers. If you plan to sell in the near future, your buyer pool will mostly comprise of current motel owners or others with industry experience. Follow the tips below to set your business apart from other motels on the market.
Before you list your motel for sale, you’ll want to determine if there are any ways you can improve it to be more desirable to a prospective buyer. You have to put yourself in their shoes and decide what qualities they’re looking for in their next investment. Some inward reflection can help – perhaps you already have ideas such as general real estate or hotel room updates or process refinements. If you feel stuck, try doing some competitive research on review websites or social media to see what types of things customers are saying about other motels near you. Pay attention to what they like and don’t like, and see if you can model your changes after what you observe.
All potential buyers will want to see financial statements and other business records from the last several years. Although they do expect a large fluctuation in occupancy rates and overall profitability, it’s important to show how you’ve arrived at your asking price. At this point (after making improvements), it’s recommended that you seek a valuation from either a business broker or another third-party service. These providers will be able to assess your commercial property to provide a fair price based on its value and other hospitality business trends.
Most prospective hotel owners begin their business search online on various listing databases. These websites are essential, especially for smaller property types. But, having a more well-rounded marketing strategy can be beneficial. Partnering with a business broker means obtaining greater access to buyers who’ve expressed interest and already met qualification criteria to buy your motel business.
Business brokers will treat your sale with complete confidentiality, so you can trust your business will only be seen by the right eyes. If you’re interested in selling a motel or hotel property, let Sunbelt Business Brokers guide you through your upcoming transaction. Get in touch with your local brokerage team to schedule a consultation!