completing hotel transactions
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 hotel properties 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 agenerational change in their own companies and many structures require relevant investments for the renovation of the building and installations.
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:
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.
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