Hotel Sales Advice: Should I Renovate First?
When selling your hotel, you may be wondering how many renovations you need to do beforehand. Well, that depends. If you’re selling an independent property, it’s completely up to you. Just keep in mind your selling price will reflect the state of the property. Franchised hotels are a different story, and that’s what we’ll be delving into today. In the hotel sales market, PIPs are always on the mind of the buyer. A PIP can play a big role in the sales price of your hotel. Read on for our take on this aspect of hotel sales.
What Does a PIP Entail?
As a franchised hotel owner, you’re probably fairly familiar with PIPs already. For the uninitiated, we’ll go into some detail before elaborating further. A PIP, or property improvement plan, is issued by franchisors to hotel owners to help their property better represent the brand. An inspection is conducted, and a list of improvements is presented to the owner. This list can be quite comprehensive, or it can be fairly minimal, depending on how well you’ve been keeping up with brand standards. A PIP can include anything from new tiles and new linens, to brand new construction in the lobby. If any aspect of the hotel doesn’t meet the current branding ideals of the franchise, they will be added to the PIP. So what does a PIP mean to hotel owners engaging in the hotel sales market?
Do I Need to Complete My PIP?
When engaging in hotel sales, it’s important to consider every angle when determining how viable your hotel is to sell. One of the first questions serious buyers ask is the status of the PIP. If you’re selling your property with an incomplete PIP, a buyer will be more wary of making an offer on your hotel. The reason for this being that a franchise will often issue a more lenient PIP for current owners. If a current owner sells their property with an incomplete PIP, the new owner will be taking on all those improvements, as well as the new PIP the franchisor issues for them. Serious buyers are aware of this, so to get a good sales price, it’s generally advised to complete the items on your PIP.
Contact the Hotel Sales Experts at Southeast International
The hotel sales market can be complicated, so let the experts at Southeast International Hotel Brokers help. When you sell your hotel through Southeast International you get access to our contacts and our extensive network. We can help you throughout the hotel sales process and help connect you to serious buyers. Contact Southeast International Hotel Brokers today, or view our website for more information.