Knowing how to price your accommodation business is one of the most important steps in selling. Whether you own a motel, hotel, or caravan park, pricing your business correctly is crucial to attract serious buyers and maximize your sale price.
Get it wrong, and you risk driving away qualified buyers or underselling your business. Here’s how to price your accommodation business in a way that reflects its true value—without hurting your chances of a successful sale.
Why Getting the Price Right Matters
Your asking price directly impacts the type of buyers you attract, how your business is perceived, and the likelihood of smooth negotiations. Pricing too high or too low can affect:
- Buyer confidence.
- Financing options.
- Your business’s marketability.
Knowing how to price your accommodation business properly gives you an edge.
Avoid the “Double the Price for Negotiation” Trap
Some sellers believe in doubling their asking price to leave room for negotiation, but this strategy can backfire. If your business is valued at $500,000 and you list it for $1,000,000, here’s what happens:
- Buyers with a $500,000 budget will overlook your business because it’s out of their range.
- Buyers looking at $1,000,000 will quickly spot that your business is overpriced and lose interest.
- After months on the market, you’ll be forced to lower the price, and buyers may see the drop as a red flag.
Instead, price your business accurately from the start, based on realistic market value.
How to Price Your Accommodation Business Accurately
To set a price that reflects your business’s worth, follow these steps:
1. Get Multiple Appraisals
Seek at least three appraisals from brokers experienced in the accommodation industry. A reputable broker will help you understand the current market and provide a realistic valuation based on comparable sales.
2. Review Your Financials
Your business’s financial performance is a key factor. Buyers will closely analyze:
- Occupancy rates.
- Revenue per available room (RevPAR).
- Profit trends over several years.
Clean, transparent financials give buyers confidence in your asking price.
3. Think Like a Buyer
Put yourself in a buyer’s shoes: would you pay the price you’re asking? Consider your business’s advantages and challenges, the current economic climate, and comparable accommodation businesses. If your answer is yes after careful thought, you’ve likely found the right price.
Be Ready to Adjust Based on Market Feedback
Even with the right price, the market’s response can vary. Pay attention to buyer feedback, and be ready to adjust if several serious buyers express concerns about your price. A small adjustment could make the difference in closing the deal.
Price with Confidence
Pricing your accommodation business correctly from the start sets you up for a smoother sale and helps attract serious buyers. You’ll build trust by showing that your asking price is grounded in the business’s true value.
Ready to get started? Contact us today to get an accurate appraisal and expert guidance on how to sell your accommodation business for its true value.
Image Source: Unsplash