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Has anyone purchased a hotel/B&B?

92 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:
thatneverhappened · 02/03/2024 18:39

Have you ever worked in this sector? It's horrific. I did it as a young graduate and left after 2 years completely broken and exhausted. The hours and stress levels are insane. It would be the last type of business I'd invest in personally

Ilovemyshed · 02/03/2024 18:40

"Owner is very keen to sell to cut their losses"

Just let that phrase sink in?

Hmmm, they definitely saw you coming OP.

mmmmkay0273 · 02/03/2024 18:43

My parents did this. Relocated from Essex to the Isle of Wight.
9 bedroom guest house.
Personal: we made soo many lovely memories - christmases etc. had the space to do whatever we needed.
Work wise: it's 24/7, it's exhausting and on the IOW it can be hard to find good reliable staff.
I ended up moving here too and helping out for a few years but it was painful seeing my parents doing it.
They have both been really hard workers, my dad especially, but watching them was torture.

They ended up selling and getting jobs at Tesco which they both find so much easier and better.

They can go home and relax, not worry that a fire alarm will go off or a guest has an issue.

Each to their own but that was our experience. Good luck if you choose to jump in the deep end!

Yalta · 02/03/2024 18:52

Tbh I think you would be better off (if you are in a touristy area) dividing the space up into holiday apartments and renting them out or selling them on as separate units

i have family who are in the hotel and hospitality business and whilst the idea
is nice (lots like the idea of playing Mein Host and having chats and drinks with their guests) the reality is hard work

You need lots of energy and be able to do late nights and early mornings and employing and overseeing managers and staff.
1 person having their hand in the till or 1 person with a bad attitude to guests can have a huge impact on your profits.

CharlotteStreetW1 · 02/03/2024 19:01

On a much smaller basis, DH and I followed the dream and bought and ran a four room (ten bed) B&B along with a village shop and Post Office.

We only needed one person to do changeovers and clean but despite being kind (which was probably our downfall) and paying over the odds, it was nigh on impossible to retain anyone.

It was 24/7 and exhausting. Our sex life took a dive as we would just fall into bed and go straight to sleep.

We did well though and sold up about ten years ago. We're back doing what we did before and enjoying holidays, weekend lie-ins etc again.

My advice would have been don't do it but you are and I wish you all the luck in the world. I hope you have a lot of fun 🙂

Fanisalwayson · 02/03/2024 19:46

I'm wondering if the Op will come back ...

Geebray · 03/03/2024 12:34

Tatonka · 02/03/2024 18:33

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?

Even a full-time manager - if you can get (and retain) one - won't be on duty 24/7. That will be on you. Unless you hire a second manager, to cover the other times. In which case - goodbye to building up a "real profitable business".

Who's going to clean your kitchen down every night? Who's going to be making the breakfasts every morning? 35 rooms with large restaurant/bar and function room is a BIG operation for two owners to run.

This bit is still making me chuckle:

No experience in hotel or hospitality sector but it would be easy to grasp

😂

Geebray · 03/03/2024 12:38

Who's going to be doing the food ordering? Who's going to check the food deliveries in? Who's closing the tills down every night? Who's welcoming the guests? Who's answering the phones? Who's attending to the inevitable occasional shitty TripAdvisor reviews? Who's cleaning the rooms? Who's keeping a tab on possible fraud?

For every person working for you - even on a zero hours contract - you will need to be paying NIC, pensions, and holiday pay as it accrues.

And how are you expecting to get a commercial mortgage? The bank will want to see the books.

Geebray · 03/03/2024 12:40

And are you buying the actual business? As well as the property? Because you will need to retain any employed staff under TUPE.

BigFluffyHoodie · 03/03/2024 12:50

I don't know much about the hospitality industry OP, but I did think of one thing - are you and your DH planning on having children? Because I'm not sure the two would mix.

Candleabra · 03/03/2024 13:00

No experience in hotel or hospitality sector but it would be easy to grasp

How rude to everyone working in this sector! You’re taking on a 35 (!) room failed business with less than £3k to do up each room. You won’t get furniture for that budget.
With vague ideas of hiring a mythical experienced manager who will run everything and work 24 hours a day whilst you still hold down full time jobs. Good luck….you’re gonna need it!!

taxguru · 03/03/2024 13:07

OK, here goes. I'm an accountant in a seaside resort, so over many years have had numerous clients with small private hotels/B&Bs. I must say, none as big as the OPs, for my clients they were typically 8-15 bedrooms, usually 3/4 story terraces as is typical of seaside towns, some doubled up by being two such properties knocked together.

Average "renovation" costs, even for those bought as going concerns and operational was typically around quarter of a million over an average of 3 to 5 years, that's even for those which appeared to be "cosmetic only". I'd say a large 35 bedroom place could easily burn through a million pounds.

The OP will probably find that the electrics, heating and security/fire systems are all shot. They usually appear functional at surface level, but dig a little, and you usually find "non compliant" aspects where there've been "bodge" jobs in the past, especially if the owners were DIY-ers!

Some of my clients found that previous owners hadn't even painted behind furniture, pictures, headboards, etc. - they'd literally just thrown a bit of paint over the bits that you could visibly see!

A "commercial" quality replacement carpet for hallways, stairs and landings can easily hit £10-£20k for a 3/4/5 story building. You really can't just go to Carpetright and pick at £15 per square metre bog standard carpet as you'd be replacing it again the following year!

If the plan is to make structural changes, i.e. ensuites converted from small box rooms, etc., you end up needing building regs, fire inspections, etc., which always look deeper into other aspects and find areas of non compliance which need to be rectified before they'll sign off the changes.

Feelingstrange2 · 03/03/2024 13:20

As a retired accountant in a tourist area I can confirm hospitality is extremely hard work and is currently in crisis and all the clients I had were experienced. I did know of some profitable small hotels but even they would have been borderline break even if they'd had to pay a manager rather than run it themselves.

VAT, staffing and on costs, utilities and cost of supplies are all real killers for hotels.

COVID started the problem and they've been hit with pretty much all their cost bases increasing at high inflation levels since. The VAT rate was returned back to normal by our Government. In April we have the NMW increasing again - whilst I agree with this principle, the hospitality industry will be impacted hugely as its a staff intensive business.

Don't do it.

ginasevern · 03/03/2024 13:26

"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 dear, oh dear. I'm face palming reading this. I run a hospitality venue and I can categorically assure you is not "easy to grasp". That comment alone displays your woeful ignorance.

Where are you going to find this manager to "oversee" the operation. Do you even know what that means? Do you imagine that a trusty, jolly person working all the hours god sends to hand you a handsome profit. If so, you are delusional.

Hospitality is on its fucking knees at the moment. Staff are rarer than hen's teeth and trying to find them is a constant, relentless, stomach churning headache.

The mistake so many restauranteurs/hoteliers make is having no experience whatsoever in the industry. Don't buy a restaurant if you have no knowledge of cooking commercially for example. You will be literally held to ransome by your chef. Ditto your hotel manager will exploit you, that's if you can even find or afford to hire one.

You will need to be personally working in every aspect of the business every single day.

Floopani · 03/03/2024 13:28

I know nothing about hospitality, hotels or running a business, but I think you are absolutely mad to risk your financial security on this. Notwithstanding it being a hotel, doesn't everyone think that lovely house they are going to renovate is going to cost £x and it turns out to be so much more. I think you're also risking your relationship on this.

Why start with a 35 bed hotel? Surely you could set up a B&B as a middle ground? This just feels incredibly naive.

taxguru · 03/03/2024 14:12

The only client I currently have who is making any kind of living above minimum wage is a guy who's turned a run-down 10 bedroom guest house into a 6 bedroomed boutique one. He's spent a fortune on renovating it, replacing all the beds, furniture, etc., redecorating and recarpeting throughout with top quality stuff, decent soft furnishings, linen and bedding, etc., and a top quality breakfast using local ingredients from local farmshops etc. His basic charge is £200 per room per night and has a couple of bigger/nicer rooms at £300 per night!

Of course he's barely fully occupied, but at those prices, he doesn't need to be. It's the opposite of a "pile it high and sell it cheap" kind of place. By cutting the number of bedrooms and having fewer guests, he has more time to devote to the few he does get, which justifies the price and also gives him more time to personally check the rooms between guests for cleanliness, that everything is working, etc. He's achieved Trip Advisor second place in his town and that drives plenty of potential customers to him who are happy to pay for quality and service.

I just can't see how a 35 bedroom one can be anything but a "pile it high and sell it cheap" kind of place these days, so it's competing with the likes of Premier Inn and Travelodge, and will struggle to get decent Trip Advisor ratings.

Personally I think the future for privately owned B&B's/Hotels is the niche/boutique market and going for quality instead of quantity. Our seaside town is full of derelict/semi derelict larger hotels which were commonly used for coach holidays and now that market seem to have dried up, they've really struggled as people wanting "cheap and cheerful" just go to Travelodge, Premier Inn, Holiday Inn express, etc.

Fanisalwayson · 03/03/2024 14:19

I suspect the OP has run a mile from this ludicrous project

Geebray · 03/03/2024 14:26

Also, OP, if you're still reading - you don't mention working capital. I reckon for place that size you'd need at least £50,000 to keep things ticking over, because from Day One you would have bills, long before you have any income. Staff wages, business rates, electricity, water, gas, insurance (which would be a few thousand itself), waste management, rodent management safety checks - all these would be totting up from the minute you sign on the dotted line.

Daisymay2 · 03/03/2024 14:34

DB and DSIL bought and run a 5 bed B&B. It’s a full time job.
They invested in some training courses before they purchased and were shocked just how hard it is to maintain standards. it isn’t an easy thing to pick up - it only looks effortless if it is being done well.
They have enjoyed it. But it’s been hard work.
Go upmarket it you can.

Geebray · 03/03/2024 15:06

Have you done a business plan, OP?

Have you seen the books of the people you're hopefully not buying from?

Twiglets1 · 03/03/2024 15:39

Fanisalwayson · 03/03/2024 14:19

I suspect the OP has run a mile from this ludicrous project

Let’s hope so. They may instead have just switched off from Mumsnet

rwalker · 03/03/2024 15:59

My friends family own one think 20 bed earn a fortune
there bread and butter customer is work contractors
Monday to Friday cooked breakfast set evening meal place is empty all day
in peak season they do Friday to Monday for tourists as well

Geebray · 03/03/2024 16:01

So:

35 bedrooms
Large Bar/Restaurant
Function room

And you reckon you can do a refurb for £100,000? That would break down to roughly:

£2,000 per bedroom - decoration, furniture, tiling, etc
£10,000 for the common areas
£10,000 for the Bar/Restaurant
£10,000 for the Function room

There is no way. You would be spending that on new carpet and flooring alone.

Geebray · 03/03/2024 16:02

rwalker · 03/03/2024 15:59

My friends family own one think 20 bed earn a fortune
there bread and butter customer is work contractors
Monday to Friday cooked breakfast set evening meal place is empty all day
in peak season they do Friday to Monday for tourists as well

This is a good point. There's no glamour or "relaunch" in working people, but they bring the income. Which would very much depend on where the OP's pipedream is.

Redglitter · 03/03/2024 16:13

No experience in hotel or hospitality sector but it would be easy to grasp

That in itself is a massive red flag

If you haven't already done it, go watch the Hotel Inspector & see how many people have thought the same

I think you're absolutely mad even considering taking on a hotel that size with no experience

I think your spend will be well over budget. Basic renovation on 35 bedrooms - painting, new bedding, probably some new furniture & carpets etc will eat right into it for a start plus the wages for your husbands team

As pp said have you had an accountant go over the books

I wouldn't be surprised if the owners personal circumstances are the ships sinking

Please look into every aspect before signing your life away, be sure you aren't just being caught up in the excitement of it all