Buying a small hotel..

[AspiringHotelier121]

I currently work for a national hotel chain as a hotel manager and have done this job for the last 15 years - I’ve always wanted to buy my own hotel and run it - I’ve never been in the position financially until now, but think it’s the right time to take the leap!

I have seen a 12 bed hotel for sale in Blackpool for £250k (sounds cheap when our 4 bed house in the midlands is worth £350k) - we know Blackpool is cheap and if this hotel was further south then it would be more than double the price. I’ve spoken to the agent and the owner seems keen to sell so that they can retire - the property needs work - the last renovations appear to be in the early 2000s and feel that we would need to spend at least £100k to get it to a modern standard but I’m thinking of putting in a cheeky offer of £215k - hopefully get it for that and then more money for renovations and trading the hotel - we would have a small mortgage and that would pay itself overtime.

We would be running the hotel full time and may look to employ part timers in peak trade.

I know Blackpool is flooded with hotels but we would look to offer a USP - has anyone got experience in the Blackpool hotel market that can share tips?

Don't do it. I've got family members that bought similar in Blackpool.

If you're determined to go ahead, do your research, analyse the books and realise the reason nothing's been upgraded for years is because there's not enough profit to spend on upgrades.

Blackpool is cheap, there are lots of options and anyone that is happy to spend some money will go to one of the more modern, bigger hotels.

Managing a hotel for someone and owning your own hotel and running it are very different and are somewhat not comparable!

As a manager - although you are responsible for the site - the ultimate responsibility of the business isn’t down to you and it isn’t your own money you’d be spending - and you’re guaranteed a salary each month.

Given that it seems that the property was last renovated over 20 years ago, it appears that everything will need to be completely gutted and renovated again. £100k isn’t going to get you far even if you renovate on a budget.

£6k per room - new carpet, new furniture, new bathroom suite, decor, lighting, curtains
That’s £72,000

Decor and re-carpeting of corridors - £10,000

re- plumb/ re-wire - £20,000

Lounge/Dining room/ Bar refresh - depending on size - £20,000 +

Kitchen refit - £30k

How old are the windows? Do they need replacing - you are talking another £20k at least to replace.

What’s the roof like? That can be expensive

Exterior - render/paint/ entrance appearance/ fascia’s - £10,000+

You’re looking at just under £200k to refurbish the place - and that’s even before you welcome a customer through the door.
Those costings also exclude renovations of the owners flat if there is one.

Blackpool is over saturated in hotels and to be honest it would be the last place I’d consider buying one if I ever wanted to - it’d be hard to make a profit as it is, let alone with the cost of extensive renovations.

You’d be working full time flat out the first few years as you wouldn’t afford to employ many staff…

It might be cheap on the market but it’s priced to sell because of the work required. Builders and contractors can be a pain to manage (I have a BTL portfolio and I have managed them in the past)

I personally wouldn’t bother with this - continue doing what you’re doing as a manager or look at smaller business opportunities that don’t require you to sell your house and risk everything you own! A cafe perhaps?

It's cheap! And it's cheap for a reason..

Too cheap- Why?
Blackpool? No.

Blackpool...no way...drove through it many years ago...even the 57p shop was boarded up....its cheap for a reason, loads of empty hotels and burnt out buildings..huge crime and drug problems...dont waste your money.

I may be wrong, but I'm not sure that people who value a really nice hotel and are prepared to pay £££ for it would go to Blackpool

Hotels are sold as going concerns and priced according to their accounts. This hotel clearly has not been profitable if it's being sold so cheaply. You might need to spend 6 months upgrading and nobody wants to holiday on a building site. You might be better to look for a b&b with 8 letting rooms and space to offer afternoon tea to the public.

Another vote from me against Blackpool. Look elsewhere OP.

Definitely use your experience and skills to run a fab hotel and make a good living, but you need to choose location and market very carefully

Our friends ran a hotel for someone who was ill in Blackpool for a few months.
That had 12 bedrooms. It was a disaster. They needed all the rooms to be filled just to break even.
It was in the most perfect spot but as others have said it's Blackpool.
They only stayed for the summer season to honour the bookings made.
The owner has put it on the market for sale and it is still not sold it's been 3 years now.

The competition is fierce. I knew of some folk who bought a small b & B and the workload was very heavy and they didnt enjoy it. I don't think I would choose Blackpool.

Wrong location OP....Blackpool is not somewhere I would want to live or holiday in.

Instead of aiming for a hotel could you instead run a B&B?

As a four in a bed fan I’d dodge Blackpool. Room prices are often insanely low. B+B for two at £40. No idea how you make a profit.

With hotels, even more than houses, the location,location,location rule applies. With a house you might be prepared to take a punt on an area that seems as though it might improve, or you might put up with various problems or lack of funds to renovate in one go. With a hotel you need to think of the location above everything else.
In your place OP I would save for longer, and buy something small in an area where you can charge a fair price for a beautiful place. You want somewhere that attracts people even in the Winter. Then make it gorgeous and cosy for short breaks, and luxurious for longer ones.

Most grounded answer here. OP don't do it.

I grew up with DGM in Blackpool, but that was 70s, 80s. It has fallen on hard times nowadays.

Why not look at Wales? Tenby / Pebrokeshire? or something.

Blackpool really is the pits. Flush your money down the toilet instead, it’s easier