Preparing Your Accommodation Business for Sale
Without a doubt, now is an excellent time to buy and sell accommodation businesses in Australia. We’re welcoming an increasing number of international visitors, particularly from China and the Asia-Pacific region, and seeing strong growth in domestic travel. In addition, domestic business travel is also on the rise.
Accommodation businesses come in all shapes and sizes, from hotel chains and resorts to country hotels, motels, apartments, B&Bs, caravan parks and management rights. All areas of the industry are reporting good numbers and steady growth, particularly in key tourism areas.
Smart Financial Decision
If you’re thinking of selling an accommodation business, you’ve picked a good time; the buyers are out there. However, as with any business, getting ready to sell is vitally important. That means getting your financials in order, as well as contracts, supplier agreements, licenses et cetera.
An accommodation business – both freehold and leasehold – is an attractive option to someone keen to become their own boss. Unlike many businesses, no specific qualifications are needed, although management experience and good people skills would be a bonus.
In many cases, an accommodation business also provides the buyer with a home, making it a very viable financial decision.
For a smaller concern, you might be marketing to a husband-and-wife team or family with experience in the industry. For example, a chef who now wants to break out on his own with a partner to run the management side of the business.
Getting Your Business Ready for Sale
Whilst you do come across urgent sales due to, for example, ill health, it is much better to plan ahead if you’re selling an accommodation business. You need to be sure that both you and the business are ready to sell.
Are there outstanding repairs or refurbishments that need to be done? Are your accounts up to date and looking attractive? Do you have forward bookings in place? These are just a few of the things you need to consider.
Choosing the right time of year to sell depends on your location – for example, seaside town versus alpine village. Ideally, you want to be marketing your business at the start of your busy season.
Get a Professional Valuation
If your personal situation allows, take the time to present your accommodation business for sale in the best possible light, to secure the best possible outcome. If you’re unsure what price to ask, it’s best to get a professional valuation. Remember, your asking price isn’t just based on your financials; you need to consider location, goodwill, future profits and the local economy. A diverse customer base is a strong selling point.
Potential buyers will expect to pick your brain about both the business and the location. Why is this a great location for an accommodation business? What attracts visitors to the area? Is the location popular for weddings? What events bring more people to the area? Are there any planned developments likely to bring more visitors to the area?
A well-presented business profile will help, giving details of the facilities, number of rooms, staffing, suppliers, types of customer et cetera.
Strong Future Growth Predicted
If you’re planning to buy an accommodation business, carefully consider what you want. Are you looking for a lifestyle business offering a slower pace of life, or do you want to take on an existing business and grow it? Do you want to be hands-on and earn a wage, or hands-off with a manager in place?
Then there’s the location. Whether you choose coast or hinterland, mountains or lakes, city or reef, every place has that something special that helps attract around over 9 million visitors a year.
Tourism Australia estimates that by 2026-27, we will have around 15 million international visitors and a 50% increase in tourist spending. By 2020, we could see more than $115 billion in overnight spend.
As the world’s seventh-largest national tourism market, Australia offers amazing opportunities for investment in tourism businesses, and tourism is considered one of the country’s five super-growth industries. So, what are you waiting for?