Outlook for 2011: Is Now a Good Time to Sell Your Hotel?

By Mike Handelsman Group General Manager, BizBuySell.com | March 20, 2011

These past few years have been tough on the business-for-sale market. This has put hotel owners ready to sell in a waiting game. Rather than sell for below market price, most smart hotel owners have simply been cutting unnecessary expenses, making ends meet and waiting for the market to rebound.

Since the recession hit in the fall of 2008, most hotels have seen a drop in revenues and profits. The ensuing fall in purchase-price valuations only made matters worse. But 2010 saw a slight improvement in the seller market and many experts expect that 2011 will be a break out year for the business-for-sale industry.

So is 2011 the year you should consider selling your hotel?

It appears that many owners are ready to find out. Those who have been waiting for the right time to exit have weathered the downturn and are now ready to begin the selling process. For prospective buyers, financing options are improving and banks are putting a new focus on lending. These signs all points to a rejuvenated industry and a more robust business-for-sale market in 2011. So if you're thinking of selling your hotel this year, here are some tips to maximize your return.

Get Finances Straight

As expected with any big purchase, buyers are going to investigate the ins and outs of your hotel before deciding to sign on the dotted line. Sellers need to be ready to demonstrate that their hotel is worth the listed asking price. The first step toward doing that is to make sure all your financial records are in order. Owners should be able to hand over a minimum of three years of documents, including tax returns, occupancy history, and expense records, to prospective buyers. These will be essential to establishing buyer trust in the economic stability of the hotel. Also, be sure to resolve any outstanding business issues that could hinder a sale. These can include short-term vendor or key employee agreements, over-reliance on one or a few key customers, conferences or events, and any outstanding legal issues.

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Coming up in March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.