Guest post in investing in hotels and accommodation can have some very good returns. Most people either develop a portfolio of investment, or they purchase a niche hotel or other accommodation and become an owner operator. In this article, we look at the owner operator and what they should be thinking about before they invest.
Investing in hotels can be made in a number of ways. Hotel investment is very popular in the real estate industry because there is more return than with investing in standard real estate – especially when the hotel is popular and full most of the time. Most people choose one of two ways. They either develop a portfolio of investment. This type of investment is normally managed with property valuation software and real estate development software. The reason being, it can get complicated when you have many different investments spread across a number of properties. This type of investment, you don’t actually own any particular property, or even space of a property, you own a percentage. The other type of investment, is when someone purchases a single small property, such as a backpackers or bnb. The smaller, niche accommodation is also popular, and a good way to secure real estate and a business at the same time. In this article, we look at what is important when you are looking to purchase a niche hotel, motel or franchise motel business.
- Stay in the Hotels. If you are interested in any particular business, it is a good idea to stay in it. You are not just buying the building, you are buying the current operations. If you are to be a successful operator, you need to study a business from the point of view of a customer. You will get a very good understanding of the business if you are a customer yourself. You will know what is wrong and right with it.
- Talk to Other Franchise Owners. If you have never owned and operated a franchise, you definitely want to know the experience of others who have. You should talk to other franchisees of the hotel that you are looking at if it is a franchise, and also speak to other people who are in a franchise type business.
- Professional Help. The larger franchised hotels and accommodation chains will have very systematic acquisition processes. They will be very fixed in the way they deal with you. At the same time, it is important you understand your position and the whole process. You need to get help from experienced professionals who know this business, particularly because you have such a high capital investment.
- Research. Research is everything. There are so many aspects of your business you will need to understand before you commit. Just because the franchise is presenting you with certain figures, it does not mean those figures will be true. Local competition could be fierce, or the franchise might not deliver on their promises. You need to have research on everything from the franchise and their operations to the local market and your competitors.
- Negotiation. Even the biggest hotel chains will allow for some flexibility for their agreement with you. If you are discussing a franchise with them, that means they are looking for someone to take over a franchise in a particular area. There are reasons for why they want to do so. You might be the first in that country for them, and it is important you understand what you can use as leverage in your negotiations, for now, and for the future. Negotiation is about getting what is right for now, and the future.
If you have experience in the hospitality industry, and you do believe you can make it work, there are considerable benefits of owning property, working your dream, and doing what you know best.