Misguided Myths & Misconceptions in Hotel Sales

Any industry has more than its fair share of common myths and misconceptions. Hotel sales is no different, suffering from some damaging assumptions that Southeast International suggests you think about before you begin.

A High Price Means More Profit

With the services hotels provide always in demand, it can be all too easy to assume that no matter how high you set your price, someone will always pay. Unfortunately, this isn’t often true, and setting a higher-than-average price for a property can alienate a lot of potential buyers.

What can also be off-putting about a prohibitively high price is that it discourages negotiations. Properties closer to average market price for similar hotels offer some breathing space for talking about potential financial agreements. Properties that are overpriced compared to their competition will likely just price themselves out of consideration, ending up ignored.

The element of competition between enthusiastic and interested potential buyers is far more worthwhile than setting a high price and just waiting for a single “right” buyer willing to simply pay more. Just be careful not to set your price too low and lose out on profit, either—“too high” in this instance means higher than the average market price for similar property.

Selling Without a Broker Saves Money

Hotel sales are complicated, and diving in without an experienced hotel broker just makes it even more overwhelming. Unfortunately, in much the same way some homeowners sell their house without the help of a realtor, some would rather approach hotel sales without a broker. The assumption is that not paying a broker will cut down on costs.

This may be true at first, cutting out the middleman to save on additional bills, but without the expertise of a broker, there’s a higher chance of missing out on profit or even accruing more costs in the long run. Even if you’ve worked in hospitality for a long time, a hotel broker specifically experienced and knowledgeable about hotel sales will know exactly what to look for when seeking out the ideal property.

Guidance from a broker, even to an experienced hotelier, is a vital step in getting the right information, providing the right information, and having more confidence in your ability to negotiate prices.

Renovations Guarantee Profit

Renovations are important in keeping a hotel in good shape and maintaining the satisfaction of both guests and staff. You might think that, in hotel sales, a property that has been recently renovated will guarantee a better price.

Once again, this is not necessarily always the case. While it may help in some instances, there are a slew of other factors at play that can affect your profit margin, regardless of how polished and modern your property is. The location of your hotel, the reputation it has if it’s already established and interest rates in the industry all play a part in price. As Southeast International always says—research is the key here, and you need to make sure you’re up-to-date. All the more reason to seek out a hotel broker.

Hotel Sales and Experienced Hotel Brokers

If you’re just getting started in hospitality, or even if you’ve been in the industry for years, it’s important that you enter each new potential deal free of assumptions and misconceptions. Every sale, just like every hotel, has the potential to be totally unique. Of course, if you need advice or guidance, Southeast International is always here to help.