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Property/DIY

Has anyone purchased a hotel/B&B?

78 replies

DevonshireDumpling1 · 25/02/2024 20:13

A hotel local to us has recently gone up for sale.
35 bedrooms - with a large restaurant/bar and function room. It’s still trading although does look like its does need a refurb to ‘inject new life into it’

Owners are retiring and want a quick sale - and it’s priced to sell at £750k.

We’ve been discussing it for weeks and we could sell our current home and a rental property we own but would still need a small mortgage as we would want to make the refurbishments straight away and ‘relaunch it’
There is an owners apartment on site so we would move in.

We are both currently in full time employment and we would probably continue this for a few more years until we’ve built up a real profitable business.

Just wondered if anyone has ever done it and can offer advice?

OP posts:
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VeniVidiWeeWee · 25/02/2024 22:33

Wetherspoons bought a rundown hotel in my local town. Is a similar size I believe. Cost about £3.5m in renovations.

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BreakfastAtMimis · 25/02/2024 22:35

So you're both going to work full time while you renovate and run a hotel? Can't see any flaws in that plan whatsoever.

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waterallover · 25/02/2024 23:07

Sorry no experience but watching with interest - my dream to own a hotel too!

It is a business transaction not property.

Does the listing/ EA provide any financial details on the business? What's the cashflow situation? Are you buying the property or the legal entity?

Have you checked the usual websites such as booking.com, hotels.com? How popular the hotel is, customer review, room rates, occupancy rate etc? What type of visitors in the area? Business/family/tourists? How long do they usually stay? What kind of hotels are nearby? Who do they target and how much do they charge? And make sure you check airbnb as well. On overhead, how easy to find staff locally? What's the current maintenance and utilities bill?

And with the refurb, do you intend to keep the existing clientele/ price point or you will be targeting an upgrade? The renovation cost and time will vastly differ.

Some initial thoughts. I hope someone with real hotel experince will see this thread and chime in.

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ProjectsGalore · 25/02/2024 23:22

You're going to both work full time while you renovate and run a 35 bedroomed hotel. I'm not sure that's going to work out......

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hothotheatbag · 25/02/2024 23:44

That's sounds like the highest risk business plan I've heard for a long time.

Do you have any business partners? And hotel experience? Any plan b if it goes tits up? Building, renovation experience?

I love a high risk plan, and run a few businesses but in that industry all I hear about are the issues finding and keeping staff and particularly chefs.

I'd do a ton of research, but keep the rental or main home and mortgage more, keep some capital safe and away from the limited business.

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Floatinginvacherin · 26/02/2024 09:45

Based purely on my viewing of The Hotel Inspector, this sounds like a bad idea to me. But you might get more luck moving it out of homes and property and into a more business-orientated bit of Mumsnet?

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TheTripThatWasnt · 26/02/2024 09:53

Have you seen what's happening in the hospitality industry at the moment? Places closing left right and centre because it's nigh on impossible to make money. It's so sad to see. Utility prices are making many, many businesses simply untenable. Add to that the cost of EVERYTHING going up, and the minimum wage too.

If it's an attractive proposition (and in a good location), then it will be snapped up by a small chain/group with a business model in place. But the chances are that it isn't an attractive proposition, mainly because of the amount needing to be spent on it to get it up to a decent standard. If you've got no experience, no contacts and no plans to actually make it your main focus (ie - still work elsewhere) then you're on a hiding to nothing, I'd say.

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PreFabBroadBean · 26/02/2024 11:34

Is there a link? 🙂

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DevonshireDumpling1 · 26/02/2024 14:57

Thanks all for you replies.
My OH is a builder and I have a relative who is an architect so there will be family involvement. He will be working on the project full time along with a team.
I meant that I’d be continuing in my role for now whilst the reno works take place so that we have an income coming in - we could live comfortably on my salary alone for now - I think I was being optimistic thinking that we both work full time jobs. My role comes with a lengthy notice period as I work in education.

No experience in hotel or hospitality sector but it would be easy to grasp - we would employ a manager though to oversee the operation.

all points to consider.

OP posts:
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BarrelOfOtters · 26/02/2024 15:00

AT £750K unless you are in a very cheap part of the country it must need a lot of renovation.....or it's a very cheap part of the country that doesn't need a 35 bed hotel...

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DevonshireDumpling1 · 02/03/2024 16:54

The owner is very keen to sell due to personal circumstances- the estate agent reckons it could sell for nearer to £900k - £1m but the owner needs to essentially cut their losses and move.

We have viewed the property and to be honest, there is no structural issues with the property. All cosmetic and can be done with £100k budget as an absolute maximum as OH will be doing most of the work - it will be materials that cost the most.

We’ve made an offer on the hotel for £675k and this has been accepted on the basis that we complete within 3 months. The rental property we own has been sold STC to the tenants in the property for £290k so that’ll be the deposit for now and we will then sell our home when the works are completed.
Our home is worth £525k so this would cover the mortgage plus the costs of reno work and still be left with some funds.

OP posts:
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Twiglets1 · 02/03/2024 16:57

They agreed to sell it to you for 675k but it "could sell for nearer to 900k".

You either got the bargain of the century or they saw you coming.

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Geebray · 02/03/2024 17:00

No experience in hotel or hospitality sector but it would be easy to grasp - we would employ a manager though to oversee the operation

Oh bless you. Let's start with:

Business rates
VAT
Employing staff - NIC, pensions, holiday pay, sick pay (Your manager's pay will eat up all your profits alone)
Payroll
Accountants
Finding and retaining staff
Laundry costs
Marketing
Food wastage
Equipment
Meeting FSA standards
Not killing anyone
Shitty online reviews
General emergencies

No wonder the owners want to "sell quickly".

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Geebray · 02/03/2024 17:03

Twiglets1 · 02/03/2024 16:57

They agreed to sell it to you for 675k but it "could sell for nearer to 900k".

You either got the bargain of the century or they saw you coming.

Yes, I think we know which one it was...

The owner is very keen to sell due to personal circumstances- the estate agent reckons it could sell for nearer to £900k - £1m

You do understand that the estate agent works for them and is spinning you a line?

Also I forgot:

Waste collection
Health and safety
Cleaning staff
Staff stealing
Staff taking the piss

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Fanisalwayson · 02/03/2024 17:16

Omg I can't believe how naive you're being. It's such hard hard work, I'm in hospitality and think you're totally underestimating the challenges

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RockSocks · 02/03/2024 17:21

My parents up and moved 14 years ago and brought a b&b
I came with them to help start it up and now still live in the area.

The have 9 rooms and one self catering on site, no time for full or part time jobs with the upkeep needed and they need a cleaner for the busy times to get it all done for changeover.
It's an all day job as guests will want to check in early, late, book tables for dinner, get lost and need directions
They never get time to themselves or to spend with family.
Going out or away means blocking out rooms and loosing revenue or getting me to stay the night incase a guest needs anything or fire alarms go off.

They make really good money but it's killing Ddad we very nearly lost him end of 2022 and if they don't slow down we will lose him soon.

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Blackpoolhotelier · 02/03/2024 17:29

Yep, we did this. We made it work. We live on site and work all day everyday. Often get up in the night to deal with issues. There's no way in hell you can work full time alongside this. Staffing will be a major difficulty for you. Like pp said, trustworthiness and capability are hard to find. 100k honestly won't get you far, we spent about 10k per room in total. Make sure you can find a laundry company to rent from, that was an unexpected difficulty for us. Happy to answer any specific questions you have. Insurance will be sky high too.

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OldTinHat · 02/03/2024 17:33

Just to say I'm very excited for you, OP!

Let us all know when you're up and running. All the very best to you!

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NotMeNoNo · 02/03/2024 17:39

Well, good luck!
My DSis and her DH have owned a couple of hotels. First one they made all their mistakes (town too quiet, dishonest staff etc) the second in a bustling seaside/conference town did well ( ie broke even) but still took 3 years to sell on when they decided to move.

It is a total 24/7 operation. They only had 14 rooms and did all cooking and most housekeeping, had some casual staff to help with serving and cleaning in busy season but staff don't work as hard as you do and need to be found and paid.

The constant battle against smokers, risk of bad reviews, noisy groups, theft and damage, keeping the place spotless and in repair, accounts, food hygiene... If you do evening meals or have a public bar you will be working 18 hour days.

They did it because they love welcoming people and had loads of repeat business but you need to be fit and ready to work hard. I can't see how you would do it both working FT. So good luck!

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StopTheGreyness · 02/03/2024 18:24

Have you actually looked at the books over the past five years? I'm an accountant and I can tell you now that hospitality is in crisis. Staffing problems are an absolute nightmare in all areas. One of my hospitality clients spends virtually all day trying to firefight all the staffing recruitment and other issues and they are a big and successful outfit. Many smaller clients in hospitality are desperate to get out. Brexit and then Covid caused major issues in hospitality, it's never recovered. I really wouldn't do this if I were you.

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Floatinginvacherin · 02/03/2024 18:28

I think the fact that the current owners need to ‘cut their losses’ would be a big red flag to me. Definitely ask for sight of their books if you haven’t already.

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Tatonka · 02/03/2024 18:33

BreakfastAtMimis · 25/02/2024 22:35

So you're both going to work full time while you renovate and run a hotel? Can't see any flaws in that plan whatsoever.

This. I think you're underestimating hiw much work it is and that running a business takes dedication and skill. Or were you planning on hiring a full time manager?

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Runninghappy · 02/03/2024 18:36

You need to do a huge amount of due diligence. I would also find it a red flag that they want to get this through quickly as it’s not a usual purchase of a house where you need to think about the standard things. There’s a lot more to understand. There’s no way you could do this for £100k. Everything is going to cost more than you think as materials are very high at the moment. Not only that but you’re going to have to buy 35+ or everything! Never mind the staffing required etc. Have you factored in CGT? I think you’re bonkers to even consider this. if you initially thought you could do this and work full time then change your mind quickly, you clearly Have no concept of what is involved. Please don’t do this!

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RokaandRoll · 02/03/2024 18:36

This sounds exciting, exhausting, and scary in equal measures. I hope you'll keep us updated as to how it goes, OP. If you wrote a book about what happens I'd read it!

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Gonnagetgoingreturnsagain · 02/03/2024 18:37

Family friends bought a hotel and restaurant in Avebury a few years ago. As far as I recall the couple had zero hotel or hospitality experience and also had 4 young sons. Apparently it was a bit Fawlty Towers-esque and they sold up after 3-5 years and moved to Spain.

You really need experience in this field.

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