21 keys to selling better
A good transaction does not depend on price alone. Preparation, confidentiality, buyer selection and control of the process can make the difference.
Be clear about what you are selling and at what price
Decide from the outset whether you want to sell the asset, the company, or are open to either. Setting a realistic price range makes for an orderly negotiation and avoids wasting time on proposals that do not fit.
Do not work with too many investors at once
More contacts do not necessarily mean a better chance of success. Two or three genuinely qualified buyers are usually enough to create competition, manage the negotiation better and protect confidentiality.
The largest investor does not always offer the best price
Funds, hotel chains, family offices and private investors can value the same asset very differently. The best buyer is usually the one for whom your establishment has the greatest strategic value.
Do not reveal the hotel’s identity too soon
Start with a blind listing. It lets you test the investor’s real interest before revealing the name, the exact location or any information that could identify the establishment.
Know the buyer before sharing sensitive information
Receiving a request for information is not enough. It is worth knowing who is behind it, what kind of assets they are looking for, their experience and their ability to complete a transaction.
Prepare the hotel before going to market
Licences, tourist beds, contracts, accounts, title, charges, CAPEX and corporate documentation should be in order before a serious negotiation begins. A problematic due diligence can reduce the price or bring the transaction down.
Do not negotiate on price alone
A higher offer is not always the best one. Payment terms, guarantees, financing, conditions precedent, due diligence, timetable and likelihood of completion are also part of the real value of a proposal.
Do not grant exclusivity too early
Exclusivity can make sense when there is a serious proposal, an identified buyer, financial capacity and a defined timetable. Before that point it can limit your alternatives unnecessarily.
Do not hand over all the documentation at the start
Provide information progressively: blind listing, extended information, financial data and finally sensitive documentation or a data room. The level of information should increase as interest progresses, and always under the relevant authorisations.
Normalise the results before talking about price
A buyer will analyse EBITDA, GOP, occupancy, ADR, RevPAR and CAPEX. Identify any extraordinary income or expenses that could distort the real profitability of the establishment.
Do not confuse asking price with market value
The price you wish to obtain is the owner’s decision. The value an investor attributes to the establishment will depend on its profitability, location, risk, condition, potential and the alternatives available.
A non-binding offer is not a sale
An LOI or an indicative offer is normally the start of a negotiation. Analyse price, conditions, deadlines and contingencies carefully before assuming the transaction is closed.
Check the real ability to complete the transaction
Expressing interest is not enough. It is important to distinguish between those who can study a transaction and those who really have the financial and decision-making capacity to close it.
Maintain confidentiality inside the establishment too
A possible sale can affect employees, suppliers, operators and guests. Control who knows about the transaction and when they need to know.
Do not create a sense of urgency if there is none
An asset that appears to need a quick sale can lose negotiating strength. An orderly process and a defined timetable help to protect the owner’s position.
Create competition, but not an artificial auction
Having two or three qualified buyers can improve the terms. Circulating the asset indiscriminately can have the opposite effect and suggest that it has been on the market too long.
Control who receives the information
Keep a record of who has seen the listing, who has signed confidentiality, what documentation they have received and when. This is especially important when certain buyers have been expressly excluded.
Define your red lines before negotiating
Minimum price, timetable, payment terms, continuity of the operator, employees, brand, contracts and other relevant conditions should be defined before you start receiving offers.
Anticipate the tax treatment of the transaction
Selling a property and selling the shares in a company can have very different tax and financial consequences. The gross sale price is not necessarily the net amount the owner will receive.
Consult your tax and legal advisers before structuring the transaction.
Think like the buyer
Ask yourself why an investor would buy your establishment and what they could do with it. Refurbishment, extension, repositioning, a change of category, a new brand or operational improvement can generate additional value.
The highest price is not always the best offer
Compare proposals by their overall value and their likelihood of completion. Price, solvency, conditions, financing, deadlines and certainty of execution should be analysed together.