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Hotel, hospitality and tourist investment sales are experiencing remarkable development even thanks to the presence of many international operators and investors who see Italy as a key tourist destination.

The total number of accommodation structures in Italy is very high and presupposes concentrations especially for those tourist destinations that attract foreign flows. In fact, more effective accommodation units with a high number of rooms are arising against many small structures.

Sales are therefore destined to increase, especially because many hotel entrepreneurs have to face a generational change in their own companies and many structures require relevant investments for the renovation of the building and installations.

 

STEP1:Pre-Marketing
STEP2:Marketing
STEP3:Offers
STEP4:Negotiations
Strategy
Due Diligence
Collateral Preparation
  • Sale strategy definition
  • Data collection for Investment Memorandum
  • Potential buyers identification
  • Strategy sharing with Clients
  • Investment Memorandum preparation
Marketing Campaign
  • Contacting potential buyers and investors
  • Site inspections with interested buyers
  • Due diligence access
Offers
  • Offers solicitation and collection
  • Offers analysis
  • Potential second round of offers
  • Final offers collection
  • Analysis of best offer and LOI signature
Closing
  • Contract redaction by Client’s lawyers
  • Mantaining relationships with other buyers
  • Support to lawyers in negotiations
  • Sale contract signature

 

The sales process can be directly adopted by the owner or supported by companies and real estate advisors that manage the whole hotel commercialization process towards the market.
 
The process often arises from the sellers’ need to complete their investments, reduce the number of owned structures or sell a property which is no longer in line with the investors’ needs.
 
In all these cases, there are some models that can be adopted for an effective commercialization.
 
In fact, the commercialization process is the following:
 
1. Preparation of an Investment Brochure, otherwise called Information Memorandum, through which it is possible to gather and present features of the accommodation structure, sales objectives, owner’s expectations towards the transfer and possibly indications of expected price (so called Asking price)
 
2. Preparation of a buyers’ list (so called Investor List) that contains all the potential subjects interested in acquiring the structure, considering the type of hotel product and the nature of investment.
 
3. Commercialization of the investment opportunity through commercial actions addressed to the market of national and international hotel investors and operators. Such actions aim at communicating sales opportunities, how the sales transaction takes place and the property expectations according to the sale price
 
4. Arrangement of the opportunity due diligence, gathering and availability of technical, operative, accounting, economic and financial documents of the hotel structure and the company owner of the real estate
 
5. Negotiations with investors and following preparation of a short list, namely a restricted list of buyers with which to maintain more advanced negotiations
 
6. Identification of the Sales Term Sheet, through which the hotel owner wants the main contract terms in the sales agreement to be respected
 
7. Selection of the most apt buyer to complete the sales: through such activity the most suitable subject to negotiate the term sheet is identified, entering a final phase of negotiation
 
8. Signature of the Term Sheet and inclusion of the legal parties in the negotiation: in this last phase, their respective lawyers are included in order to draft the sales agreement and finalize the contractual relationship of hotel transfer.
 
The total duration of the process may vary from few months to even more than a year, according to the different parties’ degree of involvement, the seller’s and buyer’s motivation and the conditions of financial markets.
 
Therefore, the process is composed of many iterative phases in which the investor or the owner make sure that the hotel is managed according to investment expectations. This generally implies the evaluation of market conditions, the need to renovate, refinance the property or propose its sale.
 
In such case, the owner can decide to conclude the investment and sell the asset. Even if this has to be included in the general process of hotel asset management, the decision is often affected by contingent circumstances that arise at a certain moment of the hotel life cycle and different market conditions. The most sophisticated investors always evaluate the possibility of maintaining or selling their own assets, estimating future cash flows and related risks, according to different alternative investment opportunities.
 
Generally, the sales brokerage service offered by brokerage and advisory companies is paid with a variable remuneration depending on the price achieved at the end of the sale.

Feasibility studies support the whole process of real estate development, identifying realistic objectives in terms of performance of the new accommodation structure in the market.

Hotel feasibility studies are the result of a professional activity aimed at establishing if a hotel project has enough probability to be economically sustainable, according to current and perspective market conditions.

The process of hotel valuation is linked to the unique features of hotel, hospitality and tourist assets, identifying a monetary value to be attributed to a property in given market conditions.

The hotel valuation is generally carried out by qualified professionals and consists of drafting and issuing a written and signed Report, which also contains the definitions of value determined.

The Investment Memorandums or Information Memorandums represent a key tool to communicate the investment opportunity to the public.

This tool, deriving from the English world, allows a professional, transparent and punctual promotion of the sale and purchase opportunity, qualifying in a unique way the hospitality property offered to the market.

The professional search and selection service of a hotel operator aims at identifying, evaluating and choosing the hotel operator that best suits the hotel owner’s needs, considering his objectives and the hotel features.

The commonly adopted professional approach involves the presence of a professional appointed by the Client that can identify hotel operators interested in signing mainly long-term hotel contracts.

The process of negotiating a hotel contract is a complex professional activity requiring relevant legal and commercial experience, which has to be acquired within the hotel and accommodation industry.

The lease contract and the management agreement are the most common forms in hotel contracts.

It is useful to rely on qualified professionals who know how to draft and negotiate these contracts.

Through franchising, independent hotels can receive commercial and marketing services, associating their own name with a recognizable brand in order to increase customer retention and loyalty.

The franchise agreement negotiation is based on the identification of all elements that are offered by the hotel franchisor, evaluating the perspective benefits that independent hotel entrepreneurs can enjoy through the contract.

Recently, hotel architecture and design have experienced important changes aimed at improving the guests’ experience, in order to best respond to a need of identity and recognition towards the places and the surrounding environment.

Furthermore, for all kinds of accommodation structures there has been a functional innovation path, due to technology advancements and building automation.

Such elements reflect on the distribution of the different areas included in the architectural project.

Hotel due diligence investigations are undertaken by buyers and investors in the process of evaluating a hotel investment, tailored to the acquisition of the asset.

The whole process is often assigned to specialized professionals, whereof principle objective is to render as faithfully as possible the buyer’s vision on asset to current status, legally and physically, technically and fiscally.

Hotel, hospitality and tourist investment sales are experiencing remarkable development thanks to the presence of many international operators and investors who see Italy as a key tourist destination.

The sales process can be directly adopted by the owner or supported by companies and real estate advisors that manage the whole investment sale process towards the market.

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