You can buy a hotel room permanently

Hotel real estate

Buy a hotel - from the small guesthouse to the luxury resort

A small guest house with a view of the sea, a quaint guesthouse or a city hotel with an exclusive restaurant - if you want to buy a hotel, you not only have a large selection, but also face a number of challenges. In addition to a good concept, a good location analysis and the right financing plan also play an important role for prospective hoteliers. With these tips the hotel purchase works.

The hotel sector has been one of the strongest investment markets for commercial real estate in Germany for years. No wonder: in Germany alone, according to the Federal Statistical Office, well over 420 million overnight stays in accommodation establishments have been counted in the recent past. And the trend is increasing. Buying a hotel property can therefore be worthwhile - provided that a few factors are taken into account.

Pension, inn or hotel - different types of accommodation

Before looking for a property, prospective hoteliers should consider what type of hostel they want to open. Should it be a large business with at least 150 beds or a small business? The services to be offered must also be well thought out.

Hotel - rooms, restaurant and services

Probably the most classic accommodation facility is the hotel. In addition to accommodation, services, a reception, daily room cleaning and at least one restaurant for house guests must be offered there. The size and the equipment of hotels can be very different - they range from smaller hotels with around 20 rooms to huge luxury hotels with their own wellness area. A special form are aparthotels or apartment hotels - instead of rooms, fully furnished apartments are rented out. The room rate usually includes services that are customary in the industry, such as daily room cleaning and breakfast. These differences are of course also reflected in the purchase price and, ultimately, in the room rate.

On the German Hotel and Restaurant Association (DEHOGA) Hoteliers can voluntarily - but subject to a fee - have their houses classified and starred. The hotels are checked in the areas of general hotel information, reception and services, rooms, gastronomy, events, leisure as well as quality and online activities. The following applies: the higher the standard, the higher the number of stars. In order to achieve five stars, a hotel must have at least two suites, among other things, and the reception must be staffed 24 hours a day and in at least three languages. A guest lift must also be available, which is a minimum standard from the four-star category.

DEHOGA regularly publishes new catalogs of criteria in which all important points for the classifications are listed.

Guest house and inn - catering business with rooms

Guest houses or inns are probably the oldest forms of accommodation. A few simply furnished rooms are usually offered via public restaurants. Compared to a hotel, the furnishings in these houses are usually simple. How high their standards are can also be read from the stars. In the so-called G classification, DEHOGA adds a “G” to the stars to better distinguish it from hotel reviews. Another important difference to hotels is that inns are primarily used to entertain people and only secondarily as accommodation.

Pension and Hotel Garni - a bed and breakfast can be enough

It is also tranquil in pensions or hotel garrisons. These are usually smaller hostels with rather limited services, although the standard at Hotel Garnis is slightly higher. Some people speak of a bed and breakfast hotel as a better pension.

The distinction between the two types of accommodation is not always clear, but there are still a few differences: While pensions are generally privately run, this is not always the case with Hotel Garnis - which can be assigned to the hotel operations. Incidentally, if a guesthouse has fewer than ten beds, it can also be a private room rental that is not a commercial accommodation facility. These rooms are mostly advertised as Bed & Breakfast.

Both pensions and hotel garrisons usually have very simply furnished rooms and the reception is usually not manned all the time. An important difference is that a bed and breakfast hotel has to offer breakfast - a guesthouse is not obliged to do so.

Another difference lies in the classification by DEHOGA. Hotel Garni is divided into lower star categories, and the G classification applies to pensions as well as guest houses. The target groups also differ. Pensions are mostly located in holiday regions and designed for longer stays, while the Hotel Garni is more suitable for business people than travelers who hardly spend any time in their accommodation.

Youth hostels and hostels - tailored to specific target groups

Youth hostels have similarly defined target groups. While youth hostels specialize particularly in groups of young people, mostly school classes, the hostel mainly focuses on individual or backpackers. That is why they often open their doors in heavily frequented cities. The guest rooms and dormitories in both hostels are simply furnished and often have several beds, some of which are bunk beds. This is clearly reflected in the low price segment for guests. Sanitary facilities are mainly used jointly, but there are also sinks or small bathrooms in the rooms more and more often.

In the case of youth hostels, it must also be ensured that only members of the German Youth Hostel Association are allowed to rent rooms there. In addition, there is a residence requirement for the hostel operators, so they have to live in the hostel or on the premises. Membership is also required for guests.

Buying a hotel - potential hoteliers must pay attention to this

If you want to buy a hotel in Germany, you should not only consider what type of accommodation you want, the location is also important. Because it has to fit the concept. After all, a beach holidaymaker will not seek out a mountain hotel. But even when the decision has been made whether it will be a country, mountain, beach or city hotel, it has to be Development potential of the location be rated. A property in an up-and-coming trendy district can be more rewarding than a country hotel in a dying area.

Privately run or part of a successful hotel chain?

Potential hoteliers should also reconsider the possibility of joining a hotel chain and running the establishment as a franchise or branch company. Although this restricts a few points, it can also have advantages due to the existing brand. Because establishing a hotel as a brand in the long term is not that easy. Hardly any hotel manages to achieve a level of global recognition like the Adlon in Berlin or the Hotel Sacher in Vienna. The major difficulty is that a hotel is usually only known to those people who have stayed there before. In doing so, they develop a specific image - the brand.

This is built up by all five senses: seeing (design and ambience), feeling (materials and haptics), smelling (fragrance concept), tasting (culinary art) and hearing (sound concept). In hotel chains, these points are usually strictly regulated, so that the guest within the hotel does not notice whether he is currently in Berlin, Cologne or Munich. In a privately run hotel, the owner has a free hand. But it cannot benefit from the good name of a successful chain.

Complex valuation - getting help is worth it

Once all of these decisions have been made and a concept has been developed, it is time to buy a hotel. Before doing this, you should definitely have the Enterprise value be determined in order to avoid an inflated purchase price. This is often set too high, especially in privately run family businesses that are for sale, for emotional reasons. If a hotel is for sale, one should ask oneself why. Are the guests staying away or is the previous owner just retiring? A Market analysis and a Value test can be of great help in rationally assessing the opportunities and risks of a hotel property.

The decisive factor for the value of a company is its ability to generate income from it in the future. The assessment is based on various criteria: location, traffic infrastructure, situation at the micro-location (neighborhood development, visibility in the street scene), the competitive situation and the company's own market positioning. However, the results can only be used as a guide and not as a guarantee.

Danger

In order not to make a bad investment, prospective hoteliers should carefully check the facts about their selected hotel property. Some questions prospective buyers should ask themselves:

  • What is the company's reputation like?
  • How have the number of overnight stays developed in recent years?
  • What are the possible dwindling numbers of guests?
  • Does the company run all year round or only seasonally?
  • Are there any construction measures planned in the area in the near future that could have a positive or negative effect on the number of guests?
  • Are there any construction defects or a renovation backlog that could cost a lot of money?
  • Can or must the staff be taken over?
  • Is the facility still functional and up-to-date?

Ultimately, the valuation of a hotel property is a complex business task. If you want to put a little more emphasis on security, you can get help from a publicly appointed and verified expert for hotels and restaurants from the Chamber of Commerce and Industry (IHK). You have a high level of expertise and industry-specific experience. Tax advisors or auditors can also be helpful in the analysis.

For pricing purposes, sales made by similar hotels at similar locations can also be used as an approximation.

Finance hotel: Check funding options

In order to secure the financing, the possibility of Funding by the EU, federal government or state being checked. There are different Funding programs for start-ups or companies. Funding can be granted in the form of grants, loans or guarantees. For example, the state of Baden-Württemberg offers start-up financing 80 for start-ups and companies. Among other things, the program supports the acquisition of land and buildings as well as construction and renovation measures through a long-term loan.

There is a similar start-up capital program in Saarland. The Saarländische Investitionskreditbank AG (SIKB) offers a long-term loan for start-ups or for corporate financing. Whether and what you are eligible for is in the Funding database of the Federal Ministry of Economics visible. A start-up grant may also be granted via the employment agency.

If a suitable property has been found, taking all factors into account, there is hardly anything standing in the way of signing the purchase contract.

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Create a hotel where there wasn't one before

Checking whether a hotel purchase is profitable is complex in existing businesses, but still easier than converting a property completely. But it is precisely themed hotels such as a redesigned prison that have their lovers these days. Converting offices or the like is, however, quite expensive and rarely really successful. If you still want to take the risk, you have to put a lot more money into your hands. Because all the necessary guidelines, such as the minimum size of rooms, must be adhered to.