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 June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.