Many of today’s hoteliers made the move into the hospitality industry with a limited amount of experience, proving that success can be born from plenty of research and a great business plan. If you’d like to join them, here is an overview of the key aspects to consider when purchasing a hotel business.

Location

It sounds obvious, but ensuring you choose a property in the right location is central to the long-term success of your hotel. Vastly different opportunities exist within the UK, but it’s vital to remember that a hotel in central London needs a very different business plan to one in a rural area such as the Scottish Highlands.

Know your customer

Once you’ve chosen the location, think carefully about whether your target customers will be primarily leisure, business or food and beverage-focussed and develop a business strategy accordingly.

Ask an expert

The benefits of seeking advice from specialist hotel advisors should not be underestimated. This includes lawyers and accountants who can make sure your investment is protected. Surveyors, valuers and architects should be consulted to ensure the building you’re purchasing is fit for purpose, even if it is already operating as a hotel.

Plan

After carefully considering all of the above, you should start to develop a comprehensive business plan which encompasses short, medium and long-term goals. If you are sourcing capital to secure or develop your new business, this plan will need to be in place even before the purchase can be confirmed. Specialist companies such as Savills Private Finance can help with this.

Competitor analysis

When you’ve found a potential property, compare it with other local hotel businesses to find out what you will be competing with and what the local market desires. This is primarily to check that there is an appetite for what you plan to centre your offer around but may also open your eyes to a gap in the market on which you can capitalise.

Consider revenue streams

If you are buying an existing hotel, research the current daily rate, occupancy figures and revenue split. Offering numerous strong revenue streams helps to future-proof your business if there is a downturn in part of the trade. Consider whether each aspect of the business can be developed further or made more profitable.

Ultimately, my advice to anyone considering purchasing a hotel is to take your time. Find the perfect property, speak to the right experts, plan in depth and set realistic goals.

Further information

Contact Savills Hotels team

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