The top 5 things to consider when purchasing an accommodation business
Are you ready to join the accommodation industry? Whether it is an investment in short term rental properties or purchasing a small motel, the financial and lifestyle aspects are not the only considerations when purchasing an accommodation business.
Here are the top 5 areas that you will need to consider when purchasing a new accommodation property.
Location – Each area and town will have its own unique charms. Whether it’s a tourist town along the river or a historical country town with plenty of attractions. There can be many avenues to be explored with a little outside the box thinking. If the purchase requires a relocation, the community aspects and facilities should have as much influence as the business possibilities.
Clientele – By asking about the market segments and clientele of the property, can open up a opportunities as well as provide a deeper understanding of the operation. Is it mainly workers staying weekly or is it more drive-through traffic staying for one night? Has the clientele changed over the years and if so has there been a contributing factor? These questions will help to establish a picture of the daily operations.
Management and staffing – Will the new owners be participating in the daily work or will there be management in place? How does the current operation work with the level of staffing? What is the minimum number of staff required to operate the business? Are there any changes that can improve the operations and staffing requirements? The level of involvement by the new owners will have a significant influence on daily operations and help to answer these questions.
Improvements needed – Every new owner will come into the business with fresh eyes and plenty of enthusiasm, which is fantastic. Consider the current standard and set out a preliminary plan of what improvements/changes are needed so that they are included in the initial budget. Be prepared for small projects to become larger than expected as the vision for the property evolves over time.
Living arrangements - Does the property provide onsite accommodation or is it separate? Living onsite can have its benefits as well as its downfalls and similarly for living off site. If relocating with a family, consider the effects of being around guests every day if the living arrangements are onsite. Remember with any business there is a need for balance, both balancing the books and finding a balance with family and friends.
The accommodation industry really is a joy to be involved in. Providing a service and product that helps create memories for guests and their loved ones is an absolute pleasure. By purchasing an accommodation property, new owners are becoming part of those memories. Good luck.
