Pros and Cons: Buy a Hotel or Build One?

If you’re an entrepreneur looking to expand your assets in the hotel industry, you may be wondering if you should buy a hotel or build a brand new one. Each of these options has its own benefits and drawbacks, so making that decision will come down to what your personal goals are. That being said, it’s a good idea to weigh the pros and cons against each other before making a decision. Today in the Southeast International Hotel Brokers blog, we’ll discuss this topic further.

Buy a Hotel or Build One?

If you want to buy a hotel, there are a lot of benefits. These benefits include:

Investment Information – Investing in a hotel is a big financial decision. As with any investment, it’s best to have as much information as possible going into it. If you buy an existing property, you’ll have access to all the financial information and performance metrics. This helps you make a more informed decision.

Shorter Timeline – If you buy a hotel it’s easy to just transfer ownership and allow the hotel to continue running as normal. You don’t have to wait for the hotel to start making money, because all of that is already in place.

Cost – This may not be true across the board, but it generally costs less to buy an existing property than it does to build a new one. Of course, this depends on the property.

If you want to buy a hotel, there may be some drawbacks too:

Potential Renovations – If you buy a hotel that is older, you may have to spend some money on renovations.

Less Creative Control – If you buy a franchised property, you’ll need to follow the design guidelines laid out by the corporate franchise.

If you want to build a hotel, these are some of the benefits:

Complete Creative Control – Building a hotel from the ground up lets you make the hotel exactly the way you want it. Everything from rooms to decor to floor plans is all under your control. It’s complete creative freedom.

Everything is Brand New – If you build a hotel, everything will be new. You don’t have to worry about renovations or outdated electrical systems, plumbing, and more. Also, marketing might be a little easier because people will be excited about a new hotel in the area.

Here is the major potential drawback of building a hotel:

Cost – The biggest drawback of building a hotel is, of course, the cost. Construction and the price of land will cost quite a bit. Also, the time cost needs to be considered. It can take a long time to build a hotel, and during this time period, you won’t be making any revenue.

Choose Southeast International Hotel Brokers

If you’re looking to sell or buy a hotel, Southeast International Hotel Brokers can help. Contact us today for more information and to speak with a member of our team.