Buying a hotel — our top six points

By Jessica Nugent

Whether you are an experienced hotelier or just starting out in the hotel industry, the process of buying a hotel can be a daunting prospect. From financing the purchase, to structuring the deal, to due diligence, to negotiating the commercial terms, there are many things to consider and each will affect the success of your new venture. However, if managed well, the acquisition of an already established hotel can be an effective method of growing an existing portfolio or launching a new one.

Does the hotel you are targeting fit in with your ethos, financial structure and long-term business plan? If you already have a portfolio of hotels, will this one sit well within the group? While each hotel is a standalone business, it is important not to lose sight of the brand that you are trying to build and establish.

The chances are that the hotel you have set your sights on will already be owned by a company. You will have to decide whether to buy that company — including all its rights, assets, liabilities and obligations — or whether to buy just the hotel property and business. There are various legal, financial and tax implications of this decision and it is wise to seek advice early on before committing to either option…

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