Tips & FAQs for Selling a Hotel
Sell a Hotel – Tips & FAQs
If you want to sell a hotel but would like more information first, please review our FAQ page for additional education.
1. How long will it take to sell a hotel?
Since the sale of every hotel property is unique, we can’t provide you with an exact timeframe. If you choose to sell a hotel with us, the timing will be based on the following factors:
- Property condition and features
- Franchise term remaining
- Price per unit compared to other brands and new construction
To learn more about the factors that affect the timeline of your sale, click here.
2. How long does it take to close the sale once my hotel goes under contract?
When you sell a hotel that is a mid-sized, mid-tier, limited service, franchised property, closing typically takes 90 days. However, the closing process can be influenced by a number of unique factors that may either elongate or shorten this timeframe. For more details on what the closing of a hotel entails, click here.
3. How much will it cost to sell my hotel?
Our standard listing fees are 6% of the purchase price, which are only paid upon closing the sale of your hotel. Creating marketing materials, paying for advertising spots, screening prospects, managing paper flow, traveling to meet with prospects and to show your property, answering calls from prospects well outside the scope of typical business hours and paying administrative support staff are all services that cost you nothing, unless your hotel is sold. When everything’s said and done, if we don’t sell your property, we don’t get paid. Find out more about the costs associated with selling a hotel here.
4. What can I do to ensure the highest possible offer?
There are many things you can do to ensure the highest possible offer when you sell a hotel. First, you’ll want to be sure that all hotel income for the past three years is accurately reported and documented with the IRS. If you own a franchise property, make sure all PIP and/or inspection requirements are complete (or near complete). Additionally, keep capital improvement costs separate from regular maintenance on your P&L, and be able to produce a list of those improvements, along with their costs. Finally, clearly disclose any expenses that a buyer will not incur upon acquiring your hotel property. Learn more about getting the highest possible offer here.
5. What are guidelines for pricing my hotel?
Currently, buyers are seriously considering properties listed at approximately 3x room revenue or below for economy and mid-tier limited service brands. Corporate and institutional grade investors are more interested in the CAP rate, which should be at least 10% to get serious consideration. Read more about hotel pricing here.
If you have additional questions about selling a hotel, please contact Southeast International Hotel Brokers.