"Off Market" Listing for Your Hotel or Resort?

Why would you want to make an "Off Market" or pocket listing for your Hotel or Resort?

There is an old saying, that "Everything is for sale." That is especially true for investment-style assets (land, resorts, hotels, classic cars, etc). If someone wants something bad enough and they have the funds to allocate to a specific asset, they can usually make a deal, even if the seller never intended to sell.

But what about the seller who wants to sell an asset, but doesn't want anyone to know?

There is a strong case to made for keeping your potential sale a secret.

1) Your employees won't know, so they can't panic.

The struggle is real. Employees in hotels are often unwise to the ways of the business world that operates in the stratosphere above them. Ergo, any potential shift in ownership is a red flag and may cause them to jump ship so they don't have to look for a new job when new owners come in with a new concept- and fire them. Even 10% of a hotel staff participating in a mass exodus can have tremendous negative ramifications for a hospitality asset.

2) Because your staff doesn't quit, you don't have to deal with high turnover and the negative impact that has on customer service.

If you lose staff to the fear of an ownership change, the trickle-down effect is almost impossible to stop. Service slides. Costs go up with overtime and training. Revenue is lost in ancillary services, which are often the first to go. New employees take time to get up to speed on policies and procedures. All of this effects your bottom line.

3) Your customer service stays high, so your occupancy stays high.

Your financials don't suffer, because there is no fluctuations in the staffing. This increases the value of your asset and makes it clear to a potential purchaser that you are a strong brand, even if you're independent... maybe ESPECIALLY if you're an independent. This will create trust between buyer and seller and ultimately lead to higher sale price and a smoother transaction.

4) Personal Reasons-

Maybe you don't want your spouse to know that you're selling an asset? Maybe you don't want the neighbors or your brother-in-law to know. You have your reasons. A quality hospitality asset investment advisory should be able to offer your property to a trusted cadre of qualified investors through a controlled information environment that protects your privacy, while still making sure you get top dollar for your asset. This way you can track who is aware of the deal. The buyer benefits in many ways, also. A trusted relationship with a known business associate makes everything go smoother through each step of the due diligence process.

5) The allure of being on the "inside track".

It's true... human nature, especially in business, dictates that we love to know things that most people don't.

Especially our competitors.

Having a trusted advisor representing your asset "off market" allows for them to make the connections for you, keeping the deal quiet, while making the potential buyer feel like they're getting something that most people don't have access to. Buyer's often don't want anyone else to know what they're doing, either... they understand the headache of having to restaff an asset and build back the service standard that can be lost with employee exodus. Especially in the current economic environment across most of Asia.

The case for keeping an asset off the public market is strong. But if you really want to sell an asset AND keep it off the market what's the best way to do it?

Find a trusted advisor. An industry insider with the connections you need.

A company who has been in business for more than a few years, with a solid reputation in the area you want to do business in. Don't use your friend in Baltimore to help you sell a beachfront resort in Bali. Find someone in Indonesia or Singapore. Check their reputation. Talk to one or two of their previous clients... if they've been around long enough, they should have a client list of references and work they've done. Then trust them, sit back and let them work for you... they'll earn the commission by cutting through all the unregulated BS that the real estate industry in Asia creates. The headaches they save you will be worth it.