Significant purchase activity in the hotel sector

In the past two years particularly, our specialist leisure team has seen a spike in the volume of hotels being bought and sold in Scotland, many of which we have been directly involved in. Whilst there have been a number of ‘corporate purchasers’, there is still strong demand from independent operators and from the overseas market.

For most purchasers, there are several key areas that need to be considered once a decision has been made that this is the opportunity for you: –

• Are you buying the assets, or the company? Our leisure team can advise on the right option for you.
• Have you secured the relevant funding, and have the costs of acquisition been factored into that, such as valuation fees, professional advisory support and loan arrangement costs? We can help you to secure excellent lending terms.
• Do you have specific projections which identify any areas to address such as seasonality, large cash outflows such as VAT bills? We can prepare these for you to allow you to focus on key risks.
• Due diligence should be undertaken to identify any “deal busters” including property, staff, licenses etc. Our team will work with your solicitors to get you the right deal.
• Immediately after purchase, have you organized management accounting, payroll and other administrative support? Our specialist outsourcing department, EQ Accounting, deliver such solutions to numerous hotels, leaving you time to run the business.

In recent months, the expected ‘Brexit Effect’ has slowed down demand somewhat, and at the time of writing, we still have no clarity as to what the future might hold. Nevertheless, the right hotel in the right location can provide the owner with both an excellent return on investment and a good lifestyle.

Our specialist leisure team will be happy to support you all the way through the purchase of a hotel, from the initial proposal to signing on the dotted line. For more information, please contact our EQ Leisure team at leisure@eqaccountants.co.uk.