Five Mistakes to Avoid When Listing a Hotel or Motel for Sale
By Mike Handelsman Group General Manager, BizBuySell.com | November 28, 2010
If you're selling a hotel or motel in today's economy, you're going to need every advantage you can get. The most significant impact revolves around trade-off between the amount of time the business is on the market and selling price. According to the statistics on our websites, BizBuySell.com and BizQuest.com, the average amount of time it takes to sell a hotel or motel at full market value is 1 to 2 years. If that sounds like a long time, it should – most well-marketed businesses should be expected to sell within 6-12 months, rather than years.
Since an extended time-frame for selling their hotel or motel for full market value is untenable for many owners, countless are being forced to sell their business for liquidation value, which according to some hotel lawyers, is typically 20 – 50% below market value.
The trade-off between a timely sale and a reasonable selling price puts hospitality business sellers in the unenviable position of having to choose between the lesser of two evils. You can either accept a highly-discounted payoff now or cross your fingers and hope the market rebounds over the next few years.
What is the right decision for your hotel or motel sale?
In our experience, the cream always rises to the top and the best businesses command top dollar no matter how crowded the marketplace.
But here's the catch: When sellers face significant competitive pressure, like in today's market, the margin for error evaporates. In other words, it's still possible to get near-market value for your hotel or motel in today's economy – you'll just need to pay attention to the details and avoid making significant mistakes throughout the selling process.
To help you get started, we've put together a list of five common mistakes that can quickly derail a hotel or motel sale. Although these aren't the only pitfalls you may encounter, by avoiding these you will greatly increase the odds of getting the highest possible price for your business in the shortest amount of time.