Selling a Mornington Peninsula Boutique Hotel: What Exactly Is Included in the Sale?
Selling a boutique hotel, retreat, lodge or other accommodation business on the Mornington Peninsula involves more than agreeing on a price for the building and business.
A purchaser needs to understand precisely what they will own, control or take over at settlement.
That can be particularly important in a region where accommodation ranges from hotels and motels to vineyard and farm stays, retreats, lodges, apartments and other specialised accommodation.
Preparing a detailed list of sale assets early can make the transaction much easier to understand.
Start With the Physical Property
For a freehold accommodation sale, clearly identify the land and improvements forming part of the transaction.
Then consider the operating assets.
Depending on the business, these may include:
guest-room furniture
beds and linen
reception furniture
commercial kitchen equipment
laundry equipment
outdoor furniture
pool or spa equipment
maintenance equipment
computers and office equipment
vehicles
artwork or decorative items
other plant and equipment.
Do not assume everything visible during an inspection automatically forms part of the sale.
Personal property, leased equipment and third-party assets should be clearly distinguished.
Create a Fixtures, Fittings and Equipment Schedule
A detailed FF&E schedule can help avoid uncertainty later.
Where significant equipment is leased, financed or supplied under another agreement, identify that arrangement.
Buyers should understand whether they are purchasing the equipment, taking over a contract or needing to arrange a replacement.
Include the Business Assets
The operating business may also have valuable non-physical assets.
These might include:
business name
website and domain name
telephone numbers
booking databases
approved marketing materials
intellectual property
social-media accounts where transferable
operating manuals
supplier information
forward reservations.
The transferability of individual assets should be checked rather than assumed.
Deal With Forward Bookings Properly
Accommodation businesses can have reservations extending beyond settlement.
The parties will need to determine how deposits, prepayments, commissions, cancellations and accommodation obligations are handled.
Gift vouchers and credits may also represent future obligations.
Keeping an accurate schedule of these amounts can help the purchaser understand what they are taking over.
Separate Trading Stock
Food, beverages, minibar products, cleaning supplies and other consumable stock are often dealt with separately from the main purchase price.
The sale contract should specify how stock will be counted and valued.
Where alcohol is involved, licensing and stock-transfer issues should be discussed with the appropriate advisers.
Do Not Forget Third-Party Arrangements
A boutique accommodation property may also have relationships with wineries, restaurants, tour operators, wedding suppliers, wellness businesses or other local operators.
If those relationships form part of the sale story, establish whether they are formal agreements or informal referral arrangements.
A buyer should not be told that a commercial relationship will continue unless there is a proper basis for that statement.
Give Buyers Certainty About the Package
The objective is straightforward: the buyer should understand exactly what the agreed purchase price includes.
Norton’s Resort Brokers can assist Mornington Peninsula accommodation owners with structuring the commercial presentation of the property and business and preparing the opportunity for qualified buyers.
Frequently Asked Questions
Is all furniture automatically included when selling a hotel?
Not necessarily. The contract should identify what is included and what is excluded.
What happens to future guest bookings?
The treatment of deposits, reservations and future accommodation obligations should be addressed in the transaction documents and settlement process.
Can the buyer automatically take over the website and social-media accounts?
Not always. Ownership and platform transfer rules should be checked for each digital asset.
Disclaimer: General information only. Sale inclusions, contracts, licensing and settlement arrangements vary. Obtain independent legal, accounting, taxation and other professional advice.