The sale of a hotel can be very complicated depending on the case and it does not happen overnight. Several criteria must also be met before you can offer your hotel for sale. In addition, particularly high competition requires that new strategies be devised to make the sale of your hotel easier. Finally, once your buyer has found it, it is now time to start negotiations for the sale of the hotel and the realization of the legal and financial arrangement as well as sales deeds.
Pre-prepared for the sale of his hotel
A period of 3 to 5 years may be necessary to prepare a good hotel sale. During this period, the seller will:
- Establish a legal structure that facilitates the sale of the hotel while minimizing the tax implications. This can, for example, result in a separation of operations and real estate.
- Cleanup of its balance sheet and deliver results
- Keep the hotel in an excellent state of cleanliness, well maintained and welcoming.
Some checks are also required before putting a hotel up for sale. The institution must meet all existing standards before it can be transferred. A diagnosis of the condition of the hotel must be made. A specification for the sale of the hotel must also be carried out. In order to put all the assets on its side, it is highly recommended to surround yourself with several professional advisors: notary, accountant, lawyer, specialist in hotel evaluation, real estate agency. To determine the right selling price, some websites (atpme.fr) offer a free valuation of the establishment. Once everything is ready for sale, it's time to start looking for buyers and prepare the terms of the negotiation. Finally, the transferor must be able to provide a minimum after-sales service in order to guarantee the sustainability of the service after its departure.
Strategies for finding a buyer
Once the decision is made, you have to put all the assets on your side in order to sell your hotel well:
- Value the hotel's obvious assets: location, tourist traffic, ever-increasing turnover with projections over the next few years, etc.
- A detailed description in French and English: many foreigners buy in France. Don't deprive yourself of these potential investors. It is very easy today to have your ad translated into English, in a very professional way.
- Choose a simple language: present the different rooms of the hotel objectively: the kitchen, the rooms, not to mention the offices and equipment essential to the proper functioning of the hotel.
- Provide detailed documentation: flyers, flyers, websites on which you are referenced, etc. as well as all the information and documentation you have accumulated during your business period. Customer feedback is also very important and can still enhance your hotel a little more... don't neglect them! The image of your hotel is an essential element to highlight in order to succeed in the best possible transfer of your hotel!
- Offer a virtual tour: a photo slideshow or video will allow you to highlight the essential aspects of your establishment. You can even film yourself to make a positive first contact. If your future buyer is hundreds of miles away, this approach can be decisive. This tool, simple to set up, is extremely effective to make discover and value your property.
- Communicate your dynamism: put your future buyer in a situation so that he can project himself in the premises and feel the same energy that you experienced when you were doing your business. You can also put it in touch with landscaping professionals who can suggest changes to be made in order to make the best use of the establishment and bring it in line with current trends. This approach is particularly appreciated because it allows the future buyer to be in direct contact with local craftsmen without having to look for them himself when needed.
- Invite your future buyer: what better way to get your future buyer aware of the benefits of your hotel: a night in your hotel will allow them to get an opinion on the quality of the services and facilities and better understand the future potential of your property. This approach gives your potential buyer a particular confidence in allowing them to evaluate the possibilities of your hotel. Then plan to talk to him about your practices and the experience he has had in your institution.
The crucial stage of negotiation
As with any transaction, negotiating the sale price of your hotel must be carefully prepared. Exchanges with future buyers must be skilfully brought in before the talks for the sale begin. If you improvise completely according to the answers of your interlocutor, you may be overwhelmed by the unrealistic concessions that might be asked of you. So, above all, you have to:
- Determine what concessions you're willing to make
- Establish the hierarchy of points to be negotiated in order to discuss them one after the other
- Find out about the prices charged by hotel establishments in your geographic area
- Have you accompanied by a professional if certain legal, financial or accounting aspects need to be addressed during the negotiation.
During the negotiation, everything can be discussed, from the price of furniture and equipment that is somewhat past or not in accordance with the regulations to the right to lease which constitutes an important part of the investment. You can choose to enter into a global negotiation or prefer to discuss each point separately without being a carpet merchant. However, expect a hard negotiation because your interlocutor is also a seasoned trader. The main elements to be negotiated are:
- Valuing the company
- Price details: base price, add-ons
- Accounting order dates
- The conditions of the transmission of activity
- The lease agreement
- The value of the assets sold (customer, location...)
- The recovery of employees
However, there is one mistake not to make during the negotiation: not knowing how to interrupt a negotiation in time. Indeed, in case of significant disagreement with the purchaser, when you are in front of an unreliable interlocutor or when the chances of success of the negotiation are rather low, it is often better to end the negotiation and seek a potential new buyer. The gross amount of the sale is not the only element of the sale of your hotel. Many other parameters must also be taken into account: how to settle, the payment of certain tangible elements of the establishment, an accompaniment of the new purchaser, for a period of time, in order to allow him to familiarize yourself more easily with his new activity, etc. All of these elements will be specified in the final agreement to sell the hotel. Regardless of the sales strategies used, the sale of your establishment is governed by the intangible law of supply and demand. A good negotiation is an agreement that satisfies both the seller and the buyer.