Cant sell my hotel

barnaby-bear

princessamy86 wrote: »

http://www.blackpoolhotelsforsale.co.uk/

I just don't get who'd be the buyer for something like this.... there are plenty hobby businesses out there - people who sell off their family home and relocate for the dream of running a hotel - but I can't see this being one of them.... the 10-12 bed pretty victorian places tick the dream box - when business is low the benefit of just a big house, it just sounds too many bedrooms to run and redecorate (the photos make it look although clean and servicable - a bit dated and redecorating that many just too much for a hobby/family business. It doesn't look pretty in the photos and some look a bit messy and cluttered. So if it isn't a family/hobby business it's a 'business' for investors and people who know what they are doing and how to manage something that big but I've no idea how much of a market there is. It's too small for the chains and yet the turnover wouldn't support the salaries for a manager and staff to be hands off and I suspect it's viable because you have two of you working for sub-minimum wage and I can't see many people wanting to do that....

alunharford

Okay, well I'll be blunt (please don't get upset with me!) but here goes. Hopefully it's useful to have somebody impartial being frank.

You're turning over £80,000 and have 36 rooms and can accommodate 77 guests. You price on a per-night basis at around £18 per person. If you were fully booked all year your turnover would be £505,890 so your occupancy rate must be less than 20% (and your turnover figure includes the bar and other events so I'd guess much less than that).
To be honest, I'm not exactly shocked. Your rooms look grim - personally I wouldn't even consider staying there. Look at the 5th picture on the 'hotel gallery': do you really expect me to pay over £50 a night to stay in that? And that's your own marketing material!

You need to sort out your rooms, or at least your marketing! Your website says "As you can see from our photographs, we have a recently refurbished, comfortable bar area" - I can't see anything because the photos are too dark! All it gives me as a potential customer is a sense that your bar is really dark and dingy. Pretty much the first line of your 'rooms' page is to make me know that you don't have a lift. This must be a major concern - and you know what the problem is - but you've not fixed it. This whole page is you telling your customers why they should go somewhere else - you don't have a lift; you don't have cots or highchairs; you don't change the bedding daily.

Your rates also seem to make no sense. Do you really expect people to stay an extra day to get £1 off? Do your clientèle not have homes to go to? Needless discounts aimed at the wrong people are a really good way to destroy your profit.

From a business perspective, you need a chef (14kish), 2 cleaners/maids/reception/bar staff people (10kish), and a manager (18kish). Add on national insurance and wages will cost you at least 56k on a skeleton staff. Heating, lighting and water will I guess be around 6k a year. Adding in the various other costs of running a business (accounting, tax, payroll, insurance, computers, phone lines, stationary, guests stealing stuff, refurbishing the rooms, supplying booze and food for the bar, etc) I don't see how the business could possibly break even.

To sell it as a going concern, you'd need to show that it can make a real long-term profit (managing to make a tiny profit because the business owners work all hours god sends for no money and make themselves ill doesn't count!). Based on the figures you've given, I don't think you are making a real profit at the moment - and you have years of experience in the business. I would guess you could improve turnover by having fewer, but larger, rooms and more bookings - but it's not my industry.
The other option is to wind up the company and liquidate its assets. Could you get planning permission to turn the hotel into flats and then sell to a property developer?

Doozergirl

The amount of money you make may not have anything to do with why you are leaving but Blackpool is always full of hotels for sale. The majority of them aren't run by people with business heads and the price of a room is ridiculous. It doesn't matter how much wonderful service you provide if you aren't charging enough for it.

£400,000 is a massive amount of money for a hotel bringing in that little cash. To be blunt, no one with £400,000 to burn is going to be investing it to make a loss. If you sat on your backside with £400,000 in the bank you'd make more money for yourself and if you needed to borrow the money, the turnover wouldn't service the debt.

Quite simply; your property value and your turnover, therefore subsequent profit don't add up as a sensible business proposition.
In it's current state, the valuation needs to be based on bricks and mortar value, in my opinion. As a business person I wouldn't pay anything in the way of goodwill value as there isn't a business there to warrant it.

How much did you pay for it? What seriously is the bare minimum you can sell for? Blackpool is constantly full of hotels for sale, the competition is rife and in truth, there are more hotels than there is demand for them. Blackpool council are insane to have allowed so many rooms to exist - they are the root of their own problem. Competition drives prices down, driving down the quality of the clientele.

I don't envy you one bit, it must be hell trying to sell.

GDB2222

My initial thought from the turnover figures was that you were virtually empty the whole time, but then I saw your tariff - £15pppn - which is not a lot of money for B&B in a hotel. £7 for dinner. I estimate each room is full on average maybe 80 or so nights a year, as some of them will be singles.

I did an internet search, and I could only find good things said about you. Indeed, several of the remarks were along the lines of "bargain, don't know how they do it for only £15". So, I think it's strange that you can't get more bums in beds, given that people like you and you're not expensive.

I also thought lots more people were 'staycationing' this year as the Pound is so low. I thought this was counteracting the recession for UK hotels?

First question: Do you really have to be that cheap? If you put your price up to £25 pppn, would that price you out of the market? (Remember that you could have 40% less customers and still be making the same turnover but with 40% less work!)

Second question: Is there perhaps a marketing issue? For example I thought your website was fine, except that the photos were not very inviting. Maybe those could be updated? Maybe you need to offer package deals or themed weekends?

I say this because it's pretty off-putting for a buyer to see such a low t/o for such a large hotel, and a price of 5 times t/o.

ladypinkof66

I think having looked at the website this is where you need to certainly update - the wording seems a bit wishy washy and needs tidying up, also the pictures to be honest are no good I could do a better job with my run of the mill digital camera.

I would suggest to update the website as a matter of urgency including new pictures taken on a sunny light day.
Also as other people have suggested upping your prices and also cater for hen and stag dos. There is no mention of whether you allow these parties.

As one person said some pics of some of the rooms dont look too good but if i was paying only £15.00 per night as long as the room was clean I wouldnt care how modern it was. I have paid more than £15.00 per night to pitch my two man tent, so i think a priority is to raise your prices.

If i needed a room for a night or two I would not hestitae to visit you.

Good luck in what you do ! I hope it all works out ok

slowdog

thanks gdb. you replied with a couple of things there that i was going to say.

to respond to you first.

yeah, where are the bums in beds? the BIGGEST problem you have as a hotelier in Blackpool is that you are a hotelier in Blackpool, if that makes sense. Blackpool itself has a fantastic reputation to some people, and an appalling one to a great many others. the town itself has been on a steady decline for a long time. at the moment there is massive levels of regeneration, some of it superb, some of it questionable, but at least an effort is being made. regardless, you are in the situation where your advertising only goes so far, and external influences that you have no control over determine what kind of trade you have. and yes, i know this is true for all business', but not all business' have the same level of competition as we do here

would changing the price alter things? yes. how, im not sure. its easy to say that we could make the same money (ish) with 40% less rooms, but the risk is what if you get less. we have a HELL of a lot of regulars that i know we will never see again if we upped the price. sure, we may gain more, but then, we may not. increasing the cost is a massive risk. as doozer said, the price of a room in the majority of places is ridiculous. i guarantee you that you will not find anywhere in blackpool that offers the full range of what we offer for the same price. there may well be a lot that offer it, but they will be so over-priced its not worth it. we are very aware that there is no way on earth anyone should be paying more for a week here than a week in tenerife

with regards to your comments about marketing, we have been advertising in pretty much the same places for years, all of which provide 95% of our bookings. however, as i stated earlier, we have gotten to a bit of a "mental roadblock", and just cant push ourselves anymore.


barnaby, alun and doozer - apart from the pricing areas, and some of the assumptions about the hotel as being somewhere you wouldnt stay and so on, then i agree with you. 4 years on the market has told me who would buy this? who would shell out that kind of money? i dont think there is anyone. whilst i will defend us to the hilt in terms of quality of service and making sure that people here enjoy themselves, i will also be the first to identify our shortcomings.

i know you cant tell from the pictures, but we are a glorified guest house. it is not "yes sir/ no sir" it is "hey john, how you doin today". its hands on, its personal, and its relaxed. as such, comments about a chef at whatever, receptionist, and so on are so far off the mark its untrue.

but is because of this i know we wont sell. we are too big to be a proper guest house to attract the kind of buyers that would look at a guest house, and we are too downmarket to appeal to someone who, well, konws what the hell they are doing.

the only question is, really, what the hell else can we do with it? obviously, there is a mortgage there, which is not at the level that we are on the market at, but is sizeable enough, so what options do we have? none that i can see


and yes, it is depressing and not a good situation to be in, and yes i am tearing my hair out

dazco

slowdog wrote: »

thanks gdb. you replied with a couple of things there that i was going to say.

to respond to you first.

yeah, where are the bums in beds? the BIGGEST problem you have as a hotelier in Blackpool is that you are a hotelier in Blackpool, if that makes sense. Blackpool itself has a fantastic reputation to some people, and an appalling one to a great many others. the town itself has been on a steady decline for a long time. at the moment there is massive levels of regeneration, some of it superb, some of it questionable, but at least an effort is being made. regardless, you are in the situation where your advertising only goes so far, and external influences that you have no control over determine what kind of trade you have. and yes, i know this is true for all business', but not all business' have the same level of competition as we do here

would changing the price alter things? yes. how, im not sure. its easy to say that we could make the same money (ish) with 40% less rooms, but the risk is what if you get less. we have a HELL of a lot of regulars that i know we will never see again if we upped the price. sure, we may gain more, but then, we may not. increasing the cost is a massive risk. as doozer said, the price of a room in the majority of places is ridiculous. i guarantee you that you will not find anywhere in blackpool that offers the full range of what we offer for the same price. there may well be a lot that offer it, but they will be so over-priced its not worth it. we are very aware that there is no way on earth anyone should be paying more for a week here than a week in tenerife

with regards to your comments about marketing, we have been advertising in pretty much the same places for years, all of which provide 95% of our bookings. however, as i stated earlier, we have gotten to a bit of a "mental roadblock", and just cant push ourselves anymore.


barnaby, alun and doozer - apart from the pricing areas, and some of the assumptions about the hotel as being somewhere you wouldnt stay and so on, then i agree with you. 4 years on the market has told me who would buy this? who would shell out that kind of money? i dont think there is anyone. whilst i will defend us to the hilt in terms of quality of service and making sure that people here enjoy themselves, i will also be the first to identify our shortcomings.

i know you cant tell from the pictures, but we are a glorified guest house. it is not "yes sir/ no sir" it is "hey john, how you doin today". its hands on, its personal, and its relaxed. as such, comments about a chef at whatever, receptionist, and so on are so far off the mark its untrue.

but is because of this i know we wont sell. we are too big to be a proper guest house to attract the kind of buyers that would look at a guest house, and we are too downmarket to appeal to someone who, well, konws what the hell they are doing.

the only question is, really, what the hell else can we do with it? obviously, there is a mortgage there, which is not at the level that we are on the market at, but is sizeable enough, so what options do we have? none that i can see


and yes, it is depressing and not a good situation to be in, and yes i am tearing my hair out

Hey, don't be so negative.
Someone out there will want it. If I was in the market for £400k of hotel I would consider it, all the others around that price do not seem to have as many rooms.

You have to remember that when people buy hotels, pubs, shops etc they think they can do a much better job than you are doing. Let them think that.

But if you was going to buy a hotel would you buy one with big bright pictures or small dull pictures.

Market it properly and your buyer will come.

barnaby-bear

slowdog wrote: »

thanks gdb. you replied with a couple of things there that i was going to say.

to respond to you first.

yeah, where are the bums in beds? the BIGGEST problem you have as a hotelier in Blackpool is that you are a hotelier in Blackpool, if that makes sense. Blackpool itself has a fantastic reputation to some people, and an appalling one to a great many others. the town itself has been on a steady decline for a long time. at the moment there is massive levels of regeneration, some of it superb, some of it questionable, but at least an effort is being made. regardless, you are in the situation where your advertising only goes so far, and external influences that you have no control over determine what kind of trade you have. and yes, i know this is true for all business', but not all business' have the same level of competition as we do here

would changing the price alter things? yes. how, im not sure. its easy to say that we could make the same money (ish) with 40% less rooms, but the risk is what if you get less. we have a HELL of a lot of regulars that i know we will never see again if we upped the price. sure, we may gain more, but then, we may not. increasing the risk is a massive risk. as doozer said, the price of a room in the majority of places is ridiculous. i guarantee you that you will not find anywhere in blackpool that offers the full range of what we offer for the same price. there may well be a lot that offer it, but they will be so over-priced its not worth it. we are very aware that there is no way on earth anyone should be paying more for a week here than a week in tenerife

with regards to your comments about marketing, we have been advertising in pretty much the same places for years, all of which provide 95% of our bookings. however, as i stated earlier, we have gotten to a bit of a "mental roadblock", and just cant push ourselves anymore.


barnaby, alun and doozer - apart from the pricing areas, and some of the assumptions about the hotel as being somewhere you wouldnt stay and so on, then i agree with you. 4 years on the market has told me who would buy this? who would shell out that kind of money? i dont think there is anyone. whilst i will defend us to the hilt in terms of quality of service and making sure that people here enjoy themselves, i will also be the first to identify our shortcomings.

i know you cant tell from the pictures, but we are a glorified guest house. it is not "yes sir/ no sir" it is "hey john, how you doin today". its hands on, its personal, and its relaxed. as such, comments about a chef at whatever, receptionist, and so on are so far off the mark its untrue.

but is because of this i know we wont sell. we are too big to be a proper guest house to attract the kind of buyers that would look at a guest house, and we are too downmarket to appeal to someone who, well, konws what the hell they are doing.

the only question is, really, what the hell else can we do with it? obviously, there is a mortgage there, which is not at the level that we are on the market at, but is sizeable enough, so what options do we have? none that i can see


and yes, it is depressing and not a good situation to be in, and yes i am tearing my hair out

You certainly get some good reviews....
http://www.facebook.com/group.php?gid=34535009762#/group.php?gid=34535009762

What made you buy it? You only need one buyer... what sold it to you....

Isn't there a TV show - hotel inspector - that does this type of assessment of how viable things are - any back copies available featuring similar?

Having seen the things your guests say and the variety of info. I do think you sound like a bargain and I would consider staying with you if I was looking for a cheap room in Blackpool... however there are lots of other hotels that without seeing yours and all the extra info that are priced similarly but have better websites/pictures/marketing and I'm pretty sure I'd have discounted yours - your main photo looks a bit scary like a 'station' pub and the empty bar / pool table (I'd have worried it filled up with hard tattoed sorts).... nothing to do with the reality just the marketting material is really poor. I've stayed in £200 a night hotel rooms smaller than a lot of yours - none of them advertise the fact. You should advertise you have some ground floor rooms available that are accessible to those with mobility issues not harp on that most rooms aren't. Photos and websites are cheap to change.....

The selling as bricks n mortar - planning permission/architectural plans for flats/old folks home might be worth exploring....

slowdog

its just annoying that all these people that are in business to sell your business cant actually, you know, do anything of what you have just stated.

i know im being negative. after so long i just dont know what to do anymore

barnaby-bear

slowdog wrote: »

its just annoying that all these people that are in business to sell your business cant actually, you know, do anything of what you have just stated.

i know im being negative. after so long i just dont know what to do anymore

I think your getting some quite good advice and opinion (probably better than the EA) - you've kind of half-heartedly been up for sale for a long while. I guess write it off to date and think of it as a new start of focussed attempt as where to go now.