Hotel Source

1. Analyze Ownership's objectives and determine accurate value.

Right at the outset – before we begin a new assignment – our first task is to make sure we clearly understand the seller's objectives. This in turn allows us to determine the most effective marketing strategy for making those objectives a reality. Once we're comfortable that we have the right approach to meet Ownership's objectives, the next step is to determine the maximum market value of the asset being considered for sale.

To accomplish this, we:

• Analyze the hotel using the most prevalent valuation approaches: income (direct capitalization), sales comparison, and room revenue multiplier. In the process we consider many “intangibles,” such as barriers to entry, availability of financing, economic conditions, and perceptions about the property and market.
• Tour the property to examine its physical condition, obsolescence concerns, amenities, competitive advantages, and location.
• Review the competitive market and the potential for new room supply, often working with our network of appraisers, consultants, franchise sales representatives, operators, and city officials.
• Determine who are the most likely buyer groups for the asset.

2. Prepare marketing materials and determine buyer pools.

After providing a range of expected values and a recommended list price for the property, we determine the best possible positioning for the deal. We create diligently prepared marketing materials that are tailored to emphasize the most salient features and the areas of opportunity that will appeal to the most likely buyer groups. Each marketing piece is designed to concisely outline the various aspects of the opportunity, while communicating its appeal both visually and through the relevant data.

Immediately after a property is listed with Hotel Source, Inc., we perform the following tasks:

• Select Buyers – From our proprietary database (which is among the most comprehensive and integrated in the industry), we select the individuals and groups who are the most likely buyers based on their specific acquisition parameters. Acquisition criteria include geographic location, franchise preferences, property type, financial indicators, market orientation, and many others.
• Prepare Executive Summary – We prepare a concise document that outlines the salient points associated with the listing, summarizing the financial performance and selling the opportunity.
• Develop Offering Prospectus – This presentation provides detailed information about the property’s physical attributes, financial performance, market area, economy, and competitive hotel supply. We conduct extensive research by gathering information from the local Chamber of Commerce, Economic Development Council, Assessor’s Office, Treasurer, and area appraisers to provide a detailed overview of the market. The goal of this comprehensive collateral piece is to create and encourage well-informed buyers to make strong initial offers – leading to the step in the process where we qualify, negotiate, and close.
• Create Advertising Plan – Based on key parameters, we select the most effective media sources in which to place advertisements for the property, which may include both industry-specific and general media. The Hotel Source, Inc. website also serves as an advertising medium that allows us to reach a wide pool of buyers.

3. Market the property on a personal, one-to-one level.

Professional, attractive marketing materials are important – but they aren't enough to sell a hotel all by themselves. The key to completing the sales process is personal contact.

We start by calling the most likely buyers and companies to stress the highlights of the deal, provide marketing materials, gauge interest, answer questions, and encourage property showings. This initial feedback is key because it allows for strategic adjustments if necessary, and enables the tracking of changing buyer acquisition criteria.

We also contact franchisors, consultants, bankers, attorneys, and others who often influence purchase decisions. Our personal contact also includes presenting Marketing Updates to owners to keep them informed of our sales progress. These tailored updates detail the number and type of materials distributed, specific comments from recipients, synopsis of conversations, placement of advertising, and summaries of all offers received.

4. Qualify, negotiate and close

Keeping our clients well informed is critical to the next phase in the process, in which final purchasers and their offers are identified, qualified, evaluated, and acted upon. This is where our experience in sales assignments pays the greatest dividends.

We're keenly aware that closing deals is our bread and butter, so we draw on our years of experience to foresee many of the common obstacles that accompany closings – a number of which are unique to purchasing a hotel business. We work closely with our clients to ensure that the final phase of the process – involving letters-of-intent, counter-offers, purchase-and-sale agreements, due diligence, and closing documents – produces the best price and terms based on the owner's objectives.