The ultimate hotel purchase checklist for savvy business owners

In the realm of business, investing in the hospitality industry can be both lucrative and rewarding. Purchasing a hotel property is a significant undertaking that requires meticulous planning and attention to detail. Whether you're a seasoned entrepreneur or a budding business owner, this comprehensive hotel purchase checklist is designed to guide you through the due diligence checklist and ensure your investment is a success.

Our nine-step checklist covers:

1. Defining your vision

2. Calculating your financial return

3. Location analysis 

4. Inspecting the property

5. Hotel branding

6. Renovations and interior design

7. Hiring and training staff

8. Marketing and launching your hotel

9. Operations

1. Define your investment vision and objectives

Imagine stepping into the lobby of your newly acquired hotel. What do you see? Defining your investment goals is the vital first step. Are you envisioning an upscale urban haven, a cosy retreat by the beach, or perhaps a budget-friendly accommodation catering to business travellers? Your vision will shape every subsequent decision you make.

Considerations:

• Niche: Determine the kind of experience you want to offer to guests. Are you targeting luxury travellers, families, backpackers, or something entirely unique?

• Market analysis: Research relevant information to the local hospitality market to understand demand, trends, and hotel competition. This knowledge will help you tailor your hotel's offerings to the needs of your target audience.

• Size and scale: Decide on the size of the hotel acquisition. Will it be an intimate boutique hotel or a larger establishment with multiple floors and amenities?

• Long-term goals: Think beyond the immediate purchase. Consider how your investment aligns with your long-term financial objectives.

Having a crystal-clear understanding of your investment objectives will be your North Star as you navigate the intricate landscape of buying a hotel.

2. Financial statements and budget

You're at the helm of your very own hotel. But before you step into that role, let's talk money. While the allure of acquiring a hotel is strong, establishing your financial foundation is a critical step of the due diligence process.

The framework of your hotel's financials

• Budget breakdown: Your budget isn't just about the purchase price. Factor in renovations, licenses, permits, staff and recruitment costs, and working capital (your current assets, like cash, accounts and customer’s unpaid bills, minus the current liabilities, such as accounts payable and debts). Knowing your numbers ensures you're financially prepared and your cash flow and hotel ROI remain healthy.

• Funding options: Explore various financing avenues. Will you opt for a business loan, partnership, or perhaps invest personal funds? Check Epos Now capital which is already trusted by thousands of entrepreneurs!

• Revenue realism: Create a revenue projection. Combine market research, location analysis, and potential occupancy rates to paint an accurate picture of your hotel's income potential.

Purchasing a hotel involves more than signing a contract – it's a financial commitment that requires stability. A solid financial plan safeguards your investment and positions you for success.

3. Location analysis

Let's talk about something crucial: the perfect location for your dream hotel.

The importance of location for hotel owners

Picture this: Your hotel is nestled in a vibrant neighbourhood, just a stone's throw away from major attractions. That's the magic of a prime location. It's not just about bricks and mortar; it's about where those bricks stand.

Elements to maximise foot traffic to your hotel acquisition:

• Market magic: Entrepreneurial success is often about finding unmet needs. Study the local market – understand the demand, uncover gaps, and identify opportunities that align with your vision.

• Easy access: Think convenience. An easily accessible location, close to transportation hubs and key points of interest, makes your hotel an attractive choice for business travellers. If your hotel is somewhere more remote, you’ll need to consider how you’ll attract your target market and still make it as accessible as possible, like having room for plenty of parking or being near bus stops.

• Future vision: Don your entrepreneur's hat and envision the future. Is the area on the cusp of development? Growing neighbourhoods can mean a steady stream of guests in the long run.

Navigating legal channels as a buyer

Remember, the best location won't shine if it's limited by regulatory issues you’re unaware of until it’s too late. Check zoning laws, regulations, and environmental reports to ensure your hotel dreams don't hit a legal roadblock.

Imagine your hotel becoming a cornerstone of the local scene. Choosing the right location sets the stage for a thriving hospitality business and ensures that every guest experience starts with a "wow!"

4. Property inspection

Now that you're on the exciting journey of acquiring a hotel, let's roll up our sleeves and get hands-on. It's time to inspect the property you've got your eye on – an adventure in discovering its hidden gems and tackling any hurdles that might be lurking.

Importance of inspecting the hotel property:

Think of it as a treasure hunt – you're searching for the golden opportunities that can turn your hotel into a guest's dream destination. Here are a few points to consider when looking out for potential issues:

• Structural assessment: Enlist professionals to examine the building's bones. Are there any hidden cracks, plumbing issues, or electrical concerns that need attention? A solid foundation is your canvas for creating an exceptional guest experience.

• Amenities and facilities: Imagine your guests lounging by a sparkling pool or indulging in sumptuous meals at a charming restaurant. Assess the condition of the existing hotel amenities – from rooms to dining spaces and every nook that could delight your future guests.

• Compliance check: Make sure the property dances to the tune of legal and safety standards. From fire codes to accessibility regulations, ensuring compliance keeps your hotel not just attractive but also secure.

Remember, your hotel isn't just about its current state; it's about the vision you have for its future. While some areas might need a little polish, envision how they could shine with your creative touch.

Imagine standing in the lobby, satisfied that every inch has been examined and accounted for. A successful property inspection isn't just about finding potential risks; it's about uncovering possibilities.

5. Hotel branding and concept

Think about your favourite places to stay. Chances are, they have a distinct vibe that sets them apart from the rest. That's the magic of branding – it's the heart and soul of your hotel's story.

Factors to consider when drafting your hotel canvas:

• Independence vs. franchise: Are you drawn to the freedom of creating a brand from scratch or the allure of joining a recognized franchise? Both paths have their perks – the decision lies in your vision.

• Theme and atmosphere: Imagine the kind of experience you want your guests to have. Is it a cosy mountain lodge, a chic urban oasis, or a one-of-a-kind vibe? Let this vision guide your branding and design choices.

• Visual elements: Refine your name, logo, colour palette, and typography. These seemingly small details wield a powerful influence on how guests perceive your hotel.

Branding isn't just about aesthetics; it's about forging an emotional connection. When guests walk through your doors, they should instantly feel the essence of your hotel's identity. Your branding will appear throughout your hotel, at nearly every touchpoint of a customer, such as:

• Logo and signage

• Uniforms

• Room amenities and key cards

• Stationary

• Artwork and decor

• Digital touchpoints (like your hotel website)

• Your marketing efforts

Want more help with hotel branding? Check out how to tell a story that you, as a hotel owner, are eager to share with every guest who walks through your doors in our hotel branding guide.

6. Hotel renovations and interior design

Renovation and interior design are where you get to transform your property into a haven that leaves guests speechless. The following points are important to consider when renovating:

• Prioritise revamp: Think of your renovation plan as a roadmap. What needs immediate attention? Perhaps it's worn-out furnishings, outdated decor, or those charming quirks that need a touch-up.

• Balance budget and ambition: Your vision might be grand, but your budget is your compass. Find that sweet spot where your ideas flourish without breaking the bank. And plan for phased improvements if your budget doesn’t flex as far as you’d like it to right now.

• Functional aesthetics: It's not just about looks; it's about functionality too. A well-designed lobby layout, efficient room setups, and comfortable amenities contribute to a seamless guest experience. Make sure you have plenty of space in high-traffic areas to not cause queues or obstructions to the flow of guests and staff.

Imagine guests stepping into your revamped lobby, their eyes widening in awe. Your design choices have the power to set the stage for unforgettable memories.

Top tip: Learn more about how to improve your hotel functionality with a point of sale (POS) system. A hotel POS system lets you manage your entire hospitality business from one easy-to-use system.

7. Staffing and training

Close your eyes and picture a hotel where every staff member greets guests with genuine warmth. That's the magic of a well-trained team – they turn a stay into an unforgettable experience. Here is a quick list on how to set up the perfect team for your hotel:

• Staff communication: Every new hotel owner needs to communicate with existing staff about the change in ownership, any potential organisational restructuring, and their role in the new setup. Open and transparent communication helps ease uncertainty and build trust. Always do this before starting to look at hiring for new roles, and look at if current staff need additional training to align them to your new vision and operational standards.

• Roles and responsibilities: From front desk wizards to culinary artists, every role contributes to the symphony of guest experience. Define clear job descriptions to ensure everyone knows their part.

• Recruitment magic: Before you even hire, work out the number of staff you need - hotel staff are essential during periods of expansion, such as openings or adding additional wings or functions. You’ll need to factor in seasonal fluctuations too. Make sure you follow best practise when interviewing and hiring. And hire individuals who embody the spirit of hospitality and align with your hotel's values.

• Onboarding rituals: When a new team member joins, their journey begins. Create a welcoming onboarding process that imparts your hotel's culture and expectations, and offers the necessary support and training needed for each role.

• Service excellence: Make guest satisfaction the heart of your team's mission. A smiling face and helpful attitude can transform a stay into a cherished memory.

• Ongoing development: Your team should undergo continuous training. This keeps their knowledge sharp and their passion for service burning bright.

Top tip: If you use an Epos Now point of sale solution for hotels, you can also integrate POS apps that will automate your daily tasks. For example, there are many staff management apps available in the Epos Now AppStore that take the pain out of scheduling staff and allow you to allocate your staff members according to your business needs whilst being cost-efficient.

So, team builder extraordinaire, remember that your hotel's success rests in the hands of your crew. As you shape a team that embodies your vision, you're not just staffing your hotel – you're creating a family that shares in the journey of hospitality.

8. Hotel marketing and launch

Imagine a crowd buzzing with anticipation, waiting to experience your hotel. That's the magic of a well-executed hotel marketing strategy – it drums up excitement and sets the stage for an unforgettable debut. Let’s first dive into setting up your marketing efforts that will need to run regularly:

Crafting your marketing:

• Website and online presence: In today's digital world, your hotel's online presence is its virtual front door. Craft a user-friendly website (where you can take online bookings), establish social media profiles, and ensure your hotel is listed on popular booking platforms.

• Visual storytelling: Imagine a photo that captures the essence of your hotel in a single frame, or a captivating video highlighting your hotel’s unique features and best selling points. Invest in high-quality visuals that showcase the beauty and unique features of your property.

• Create a consistent content strategy: Develop engaging and informative content that highlights your hotel’s amenities, local attractions, events and stories. Think blog posts, social media posts, videos, virtual tours and guest testimonials. All of these paint a picture of your hotel and need to be updated frequently, so set a reasonable expectation of how frequently this will be handled.

• Set up email marketing: You’ll need to build and maintain an email subscriber list to send out newsletters, promotional offers and updates about your hotel - and remember to think about how you’ll personalise the content to different segments of your audience (this will be key for your loyalty programmes!).

• Start reaching out to form public relations: Collaborate with local media and travel influencers to generate regular press coverage and promote the hotel.

• Update your local listings and reviews: Claim and update your hotel’s information on Google Business Profile and other local directories. Encourage guests to leave reviews and respond promptly to feedback.

• Invest in paid advertising: Invest in targeted online advertising campaigns, such as pay-per-click (PPC) ads on search engines and social media platforms, to reach potential guests who are actively searching for accommodations. You’ll need to set aside time and a budget for this.

• Set up regular events and promotions: Plan and promote special events, packages, and promotions that align with the hotel's brand and appeal to different guest segments.

• Look at analytics and measurement: Marketing isn’t just about creating content - you need to set up analytics tools to track website traffic, conversion rates and other key performance indicators. Regularly review your data to refine your marketing strategies and make improvements.

Now let’s talk about the big special event: marketing for the launch of your hotel!

Countdown to launch:

Picture the excitement as your hotel's opening day approaches. Your marketing efforts are like the notes building up to a crescendo in a symphony – each touchpoint adding to the excitement.

• Guest communication: Ensuring a seamless experience for guests is paramount. As the new business owner, you should strive to maintain the same level of service or enhance it, making sure guests feel comfortable during the ownership transition. Informing guests about the change in ownership can be done through various channels, such as the hotel's website, social media, and email newsletters. Transparency helps manage guest expectations, before you get everyone excited about the new launch!

• Pre-launch buzz: Like a teaser trailer for a blockbuster movie, start building anticipation before your hotel opens. Tease your audience with glimpses of what's to come.

• Promotions and packages: Craft enticing launch offers that entice travellers to choose your hotel for their stay. Special packages or exclusive deals can create a sense of urgency.

• Collaborations and partnerships: Collaborate with local businesses to create unique experiences for your guests. Partnering with nearby attractions or restaurants can add an extra layer of charm.

On the big day comes the ribbon cutting, the smiles of your team, and the awe of your first guests. Your marketing efforts have laid the foundation for an unforgettable launch!

Continuing the engagement:

Remember, marketing doesn't end on opening day. Keep the momentum going with ongoing promotions, engaging social media content, and strategies that keep your hotel top of mind.

Top tip: Take advantage of Epos Now's POS integrations and implement add-ons such as Loyalzoo to reinforce your customer loyalty program and encourage repeat business towards your hotel.

So, marketing virtuoso, your hotel's debut is a symphony waiting to be played. As you conduct this orchestration of excitement, remember that every note you play contributes to the lasting impression your hotel will make on the world.

9. Hotel operations management

Ongoing operations and management are the heartbeat that keeps your hotel thriving. Let's break it down for you hotel owners:

Embracing the role of steward:

• Supplier and vendor relationships: Review existing supplier contracts and establish new agreements if necessary. Maintaining strong relationships with suppliers ensures a steady supply of goods and services for the hotel's operations.

• Legal and regulatory updates: Ensure all legal and regulatory requirements are updated to reflect the change in ownership. This includes licenses, permits, contracts, and any necessary documentation.

• Guest-centric mindset: Think of each guest as a guest of honour. Every decision and every touchpoint should reflect your commitment to their comfort and happiness. If you’re taking on a hotel, make sure you keep the same standards or improve it, so returning guests feel comfortable during the ownership transition.

• Efficient operations: Imagine a well-oiled machine, with every department working in harmony. Efficient processes behind the scenes ensure seamless experiences for your guests.

• Feedback loop: Consider guest feedback as a treasure trove of insights. It's not just about rectifying issues; it's about continuously improving based on the valuable input of your guests. The same for your staff - be sure to listen and action feedback promptly.

• Technology integration: Picture the convenience of mobile check-ins, smart room controls, and personalised services thanks to integrating a POS system. Embrace technology that enhances the guest experience.

• Sustainability efforts: Implementing eco-friendly practices not only reduces your hotel's environmental footprint but also resonates with environmentally conscious guests.

• Leadership: Effective leadership is crucial for a hotel owner as it shapes staff morale, guest experiences, and overall operations. A strong leader motivates and engages staff, leading to improved service and job satisfaction. To enhance leadership skills, hotel and business owners can seek mentorship, invest in training, practice active listening, lead by example, and prioritise employee development.

Checking your checklist twice

We hope you’ve found our hotel purchase checklist helpful - it’s essential for new hotel owners to ensure a comprehensive and organised approach to the acquisition process. By following our checklist, we hope it helps you identify potential issues early, streamline the processes you need to put in place, and aid in making an informed decision.

Overall, the post-purchase transition phase is critical for maintaining operational continuity, retaining staff, and ensuring a seamless experience for guests. By carefully managing this phase, you can establish your presence as the new owner, make necessary improvements, and set the course for a successful and prosperous future for the hotel.

If you choose to purchase a hotel, we wish you the very best of luck! As your hotel welcomes guests, remember, you're not just an owner – you're a conductor of memorable experiences. Embrace the journey!