Any suggestions on what to do with a hotel?

WhyTheFace

Hi,

If you were given a 25 bed, very basic (old yet fully functional and clean) hotel along the Wild Atlantic Way how would you go about getting someone to run it for you, or rent it completely to someone and let them run it themselves?

Are there any agencies or websites that could help?

The hotel was bought as a long term investment with no debt involved. The long term goal is capital appreciation but it needs to be kept running. The owner of the hotel is not dependent on the hotel for an income.

Any suggestions?

Thanks

Trojan

If it's very basic, but clean, it could probably be set up as an independent hostel quite easily. That would probably be the quickest route to revenue as you need minimal staff and outlay.

WhyTheFace

What would be the main difference then between hotel and hostel? Is it that you are not obliged to provide a breakfast?

Due to its location on the west coast, and the fact it closes for winter it has proven impossible to find a chef. Even a local housewife to come down and do the breakfast shift.

nim1bdeh38l2cw

A refugee camp?

troyzer

WhyTheFace wrote: »

What would be the main difference then between hotel and hostel? Is it that you are not obliged to provide a breakfast?

Due to its location on the west coast, and the fact it closes for winter it has proven impossible to find a chef. Even a local housewife to come down and do the breakfast shift.

A hostel is self catering and you could put multiple bunk beds in each room.

Obviously you charge less but you'd need less staff and the the standards can be lower.

mikemac2

Try to get a State contract for direct provision ?

WhyTheFace

mikemac2 wrote: »

Try to get a State contract for direct provision ?

Not sure if it would work as it is along the wild atlantic way, Bord Failte etc. would no doubt object. Don't want to piss the neighbours off also as the owner is from the region and is known.

spurious

Retirement homes. Limited catering facilities in each apartment, communal restaurant, hairdressers, doctor's surgery on site also serving local community. Small shop on site etc..

WhyTheFace

spurious wrote: »

Retirement homes. Limited catering facilities in each apartment, communal restaurant, hairdressers, doctor's surgery on site also serving local community. Small shop on site etc..

Would require too much investment, lift etc.

Bigus

The Bar license if it has one , is very much integrated into the Hotel license , which is in turn dependent on passing an annual Board failté inspection approval (minimum standards and facilities)to remain in place . Therefore downgrading to a hostel will result in losing the bar license, which in future will be very hard to replace.
A Bar license used to be a valuable asset , but nowadays could be seen as a liability, depending on Location and trade, but definitely hard to re instate if lost.

25 rooms is not ideal from an overhead basis , and ideally would need to be expanded for long term sustainability.
A live in experienced couple , might be the ideal leasee, on minimal rent.
Where you find this experienced couple is anyone's guess but Brexit might make some Irish uk based people available to take up an offer.

WhyTheFace

Bigus wrote: »

The Bar license if it has one , is very much integrated into the Hotel license , which is in turn dependent on passing an annual Board failté inspection approval (minimum standards and facilities)to remain in place . Therefore downgrading to a hostel will result in losing the bar license, which in future will be very hard to replace.
A Bar license used to be a valuable asset , but nowadays could be seen as a liability, depending on Location and trade, but definitely hard to re instate if lost.

25 rooms is not ideal from an overhead basis , and ideally would need to be expanded for long term sustainability.
A live in experienced couple , might be the ideal leasee, on minimal rent.
Where you find this experienced couple is anyone's guess but Brexit might make some Irish uk based people available to take up an offer.

It has a fully licensed bar and the hotel as past all BF inspections.

Yes I was thinking about a couple with some experience/background who might want to run it as a career change/break etc. They could live on site and some form of remuneration package drawn up with a profit sharing aspect to it.

Are you saying that a change of use from hotel to hostel would mean loss of bar license? Generator hostel in Smithfield has a license.

Bigus

More than likely it would lose the Bar license, licensing is a very specialised area with only 4 or 5 barristers in Ireland that know their stuff when it comes to licensing.
Annual bar Licence is normally applied for every September, and has to fulfill a lot of conditions before the licensing court, inc in hotel case , bord failte approval, public liability insurance , a valid stamped lease, suitable licensee ( who must appear), fire cert, to name but a few.Tax clearance cert.
It may also have the benifit of a dance license which also needs renewal.
I think profit sharing is overly ambitious considering the contingent liabilities, and as an investor I'd be more concerned with the quaility of the management and their ability to maintain the premises, perhaps even the investors contributing annually towards upkeep and depreciation tax efficiently.
Really this should be looked at as reducing liabilities rather than a money making opportunity, because a 25 bed hotel in the west is not going to generate any more than a meagre income for a full time manager, and one public liability claim could wipe out many many years of profit. This is why a lot of places are boarded up. Insurance is a real real show stopper.

lastusername

You could look to the States for someone with deep pockets and a dream of setting up a hotel or hostel along the revitalising Irish Atlantic coast...

WhyTheFace

lastusername wrote: »

You could look to the States for someone with deep pockets and a dream of setting up a hotel or hostel along the revitalising Irish Atlantic coast...

Hi,

Yes that was kind of the idea of this thread. If anyone knew what channels could be followed to enable such connections being made.

Bandara

For me the idea to change it to a hostel makes no sense, hotel revenues are at their highest in years and climbing - and in the quieter areas of the WAW there is a scarcity of dining options so in-house revenues per head are even higher than they are in the big tourist cities like Dublin and Galway. The hostel model is too messy and there is not the return to justify it over a hotel proper imo. You say its is old yet clean - that is absolutely adequate for the markets that tour the west coast. There are a huge number of American tourists who are very well used to motel type accommodation and have no issue with it. And they are, by a distance, the highest visitor ratio who "Tour Ireland" - i.e. coast to coast' - as per the Failte Ireland presentations this summer.

I do a lot of business with overseas tour companies, DMCs and event organisers. There is a huge problem in obtaining accommodation with their price structures, particularly at the lower to middle sector of the market. If you reach out to these they will happily look at planning groups with you, and in the majority of cases this would be 12-18 months ahead of time with very acceptable rack rates available.

My own opinion would be to approach the other mid to large sized hotel operators there are within 50 miles in any direction and meet with them and sound them out as to their interest to lease the property from you. You may need to give a 15 or 20 year lease with a 5 year break but it is still preferable to taking a punt on one or two people who may or may not make it work, stick at it, have the skillset or funding required to keep it going.

I would feel you should not have any issues finding a current operator who will pass due diligence to take the site from you.

Good luck with it.

Eric Cartman

Theme the rooms to Irish writers / musicians , get some hippy painter in , throw some modern Ikea furniture into it, get a selection of Irish gin's and whiskeys and craft beers in the bar, list it on Airbnb as a hipster cool place to go, put a 'surf board rack' at reception for them , target American young tourists with too much money basically.

368100

Get on to the coach tour places....offer them a deal for minimum numbers, some will want to stay, some just stop for lunch etc but its easy revenue if you can strike a deal

Edit: I'm jealous, would love to get a chance to do something like that

MorganIRL

Im in the situation you are looking for someone for. We have a hotel/b&b. We took it over 3 yrs ago and have put a restaurant in and refurbed the function room. We are in a small rural town just off the WAW, the owner is gonna refurb the rooms shortly as we cudnt use them really in the current state as we have created a modern bar and function room at our expense(risky people will say) but the venue needed it and the owner initially wasn't gonna put any more money in, were now 50/50 with him so it's paid off. Honestly, You will find it hard to get someone to run a place of that size. There are sooo many people out there that are out for a quick buck, sign a 5 yr lease, but all they want to do is keep the VAT, and run out the door leaving bills all over the place. And ur business name in ruins.. contact me directly if u have any questions and I will try and help.

Graniteville

Drop down to the people who run The Inn to the West just outside Clifden.

They started as a luxury family oriented hostel but gradually upgraded to hotel status.

I guess it has worked as I tried booking it this year and every date I wanted was booked out.

jasper100

WhyTheFace wrote: »

Hi,

If you were given a 25 bed, very basic (old yet fully functional and clean) hotel along the Wild Atlantic Way how would you go about getting someone to run it for you, or rent it completely to someone and let them run it themselves?

Are there any agencies or websites that could help?

The hotel was bought as a long term investment with no debt involved. The long term goal is capital appreciation but it needs to be kept running. The owner of the hotel is not dependent on the hotel for an income.

Any suggestions?

Thanks

As mentioned previously whoever comes in to rent it will sign a 5 year lease and more than likely take as much money as they can out of the place over the 5 years from the business, leaving the place in poor condition, lots of unpaid bills etc. which will end up costing you a lot of money to put right.


You really need to go in and do this yourself, build up the trade, get the place into great condition and with strong trading figures behind you then sell it when the market conditions are right.

368100

jasper100 wrote: »

As mentioned previously whoever comes in to rent it will sign a 5 year lease and more than likely take as much money as they can out of the place over the 5 years from the business, leaving the place in poor condition, lots of unpaid bills etc. which will end up costing you a lot of money to put right.


You really need to go in and do this yourself, build up the trade, get the place into great condition and with strong trading figures behind you then sell it when the market conditions are right.

100% agree

davindub

There are quite a few recruitment agencies who are experienced in Hotel management. Renting out is a risk you probably don't want to take, if maintenance and upkeep is not kept on top of, the next operator will face a huge refurbishment, not to mention as other posters have stated loss of reputation, etc.

Get a Full Time General Manager with experience, maybe someone experienced at deputy manager level looking to relocate/ jump up. Get a part time marketing manager with experience & a Chef if there is restaurant or lower grade chef for bar food. These are the most important people to have in place.

Outsource the financial control/ HR functions. Set detailed budgets and KPIs for the next year and business plan for the next 5. Important to create a budget for refurbishment.

Get listed on booking.com etc etc (all of the booking sites) immediately (if not already trading, aim for April opening).

If the owner doesn't have the experience, the General manager will need to be fully aware of how to run a hotel, that includes health and safety (including legislative required training for staff), general security, financial management, etc. The recruitment agencies can help with selecting the right person. It would be common to offer career prospects such as directorship after a certain number of years.

the_pen_turner

Eric Cartman wrote: »

Theme the rooms to Irish writers / musicians , get some hippy painter in , throw some modern Ikea furniture into it, get a selection of Irish gin's and whiskeys and craft beers in the bar, list it on Airbnb as a hipster cool place to go, put a 'surf board rack' at reception for them , target American young tourists with too much money basically.

i think this is a great idea.

most hotels are all the same. lovely and well kept but nothing to set them apart.

i wouldnt do anything too perminent but just accesorise it with stuff like that.
basically a nice relaxed place

those kinds of people were into backpacking and traveling the world with very little. basically the hostel type. but now that they have grown up a bit they want the luxury of a hotel but still the lifestyle

Eric Cartman

the_pen_turner wrote: »

i think this is a great idea.

most hotels are all the same. lovely and well kept but nothing to set them apart.

i wouldnt do anything too perminent but just accesorise it with stuff like that.
basically a nice relaxed place

those kinds of people were into backpacking and traveling the world with very little. basically the hostel type. but now that they have grown up a bit they want the luxury of a hotel but still the lifestyle

Thats exactly it, the kind of 'glamping' vibe. Those american hipsters in their late 20s all have lots of disposable income , don't want 4 bunkbeds in a room but don't want the hilton either, let them experience a quasi put on edition of what they imagine as irish culture in their head.

Example 1 : A james joyce room just jeeds some mural painted on the wall, a small bookshelf with hard back copies of his work and a bit of ikea furniture. Give every room an en suite if feasible, a double bed and 1 bed/sofa combo to make it hold 4 mates / a family , a tv and desk with a lamp.

Make the kitchen self service and put long tables in a communal area and operate the reception and bar only yourselves. Put some instagramable crap like a chalkboard wall all guests can sign and some hip furniture.

Low renovation cost per room, low staffing requirement as on a quiet night one person behind tge bar could act as everything, no need for chefs or anything , appeals to a younger crowd , enough 'likes and shares' and youll be hopping april-november.

MorganIRL

Eric Cartman wrote: »

Thats exactly it, the kind of 'glamping' vibe. Those american hipsters in their late 20s all have lots of disposable income , don't want 4 bunkbeds in a room but don't want the hilton either, let them experience a quasi put on edition of what they imagine as irish culture in their head.

Example 1 : A james joyce room just jeeds some mural painted on the wall, a small bookshelf with hard back copies of his work and a bit of ikea furniture. Give every room an en suite if feasible, a double bed and 1 bed/sofa combo to make it hold 4 mates / a family , a tv and desk with a lamp.

Make the kitchen self service and put long tables in a communal area and operate the reception and bar only yourselves. Put some instagramable crap like a chalkboard wall all guests can sign and some hip furniture.

Low renovation cost per room, low staffing requirement as on a quiet night one person behind tge bar could act as everything, no need for chefs or anything , appeals to a younger crowd , enough 'likes and shares' and youll be hopping april-november.

That's all good and well if u have a good passing trade from the WAW, but the truth is that it's very one off in rural areas, unless ur close to 1 of the major towns or locations. I'm not sure where people are getting there views of 'glamping' and 'hipsters' , but the real world is that they won't pay the rates and bills, and expenses of staying open because no matter how much they sell 'how they want to return to a simpler life' they don't venture much outside of the main places of westport and Killarney and maybe, Killary harbour that has 20+yrs of tough business behind them ( my area of knowledge, maybe others) .I hasten to add my experience is the above and I just off the WAW. If the OP can enlighten us so we can help or just close the thread either wud be great.

davindub

Eric Cartman wrote: »

Thats exactly it, the kind of 'glamping' vibe. Those american hipsters in their late 20s all have lots of disposable income , don't want 4 bunkbeds in a room but don't want the hilton either, let them experience a quasi put on edition of what they imagine as irish culture in their head.

Example 1 : A james joyce room just jeeds some mural painted on the wall, a small bookshelf with hard back copies of his work and a bit of ikea furniture. Give every room an en suite if feasible, a double bed and 1 bed/sofa combo to make it hold 4 mates / a family , a tv and desk with a lamp.

Make the kitchen self service and put long tables in a communal area and operate the reception and bar only yourselves. Put some instagramable crap like a chalkboard wall all guests can sign and some hip furniture.

Low renovation cost per room, low staffing requirement as on a quiet night one person behind tge bar could act as everything, no need for chefs or anything , appeals to a younger crowd , enough 'likes and shares' and youll be hopping april-november.

Some good ideas but the realistic target market outside of the main cities / not near the main tourist attractions is not young US visitors. The main issue being accessibility and obviously younger visitors will have a list of attractions they want to see and travel more extensively, so short stays rather than week long. But also per visitor for smaller hotels, the US can have the lowest ROI (excluding corporate), advertising into the US is very competitive and you pay a premium.

WhyTheFace

Hi,

Sorry for the delay in getting back to you.

First of all thank you all for your input and ideas. Some great insights by people who obviously understand the industry and its pitfalls.

Through hard work, albeit on a limited budget, the owner has brought it up to a perfectly acceptable standard and traded for the first time this year. While he ran it himself he found it impossible to find a chef, which is no surprise really considering the nationwide shortage. The owner has realised he is not physically able to continue to run it, again he bought it mainly as an investment, not as a revenue stream.

The main reason I started this thread was to find out if anyone knew what routes to go down in searching for someone to either i) manage it for him or ii) lease it from him. Having read the thread the idea of someone taking the lease for 5 years and running it into the ground is a bit disconcerting.

I personally think it would do better as a basic hotel with a focus on those who are into the outdoors, rather than a romantic weekend away. I found these lads online and think it might be of interest to the likes of them should they look to expand

https://bigstyle.ie/bigstyle-atlantic-lodge-hostel-mayo/

In reality, the long term hope is that someone with deeper pockets than the owner and with a background in hotels might wish to buy it and invest significantly in it. Due to its location it would be almost impossible for planning approval for a new hotel where it is situated. But in the meantime we feel the need to keep it open as a going concern instead of allowing it to fall into disrepair.

Approaching other hotel companies and asking them if they would be interested in it might be a start.

Thanks again for all your input!

antoinolachtnai

The problem for your friend is that a person buying this hotel to invest in it will need to get it cheaply to justify closing it for a season and doing it up. At the end of the day, it will still be a 25-room hotel and the new owner will face the same difficulties that your friend has.

You are quite right that finding the right 'positioning' is the way to go to maximise the revenue. But it will still require investment and it won't necessarily make the hotel viable.

If there was a plan (preferably with permission) to extend the hotel on the current site that might make it more valuable to a hotel operator. But this would still involve an investment in the planning.

Is there any other way the site could be developed? I think your friend needs to think carefully about how he is going to realise value from this asset in a few years.

Water John

Certainly a la Bigstyle, that is your market. Essential to get customers not weather dependent.

sysprogrammer

you might send me a pm with contact details, I run coaches to many places like yours along the WAW.
You might be best to tout this around the industry first.

Chat soon,
Sys

Bandara

Bandara wrote: »

For me the idea to change it to a hostel makes no sense, hotel revenues are at their highest in years and climbing - and in the quieter areas of the WAW there is a scarcity of dining options so in-house revenues per head are even higher than they are in the big tourist cities like Dublin and Galway. The hostel model is too messy and there is not the return to justify it over a hotel proper imo. You say its is old yet clean - that is absolutely adequate for the markets that tour the west coast. There are a huge number of American tourists who are very well used to motel type accommodation and have no issue with it. And they are, by a distance, the highest visitor ratio who "Tour Ireland" - i.e. coast to coast' - as per the Failte Ireland presentations this summer.

I do a lot of business with overseas tour companies, DMCs and event organisers. There is a huge problem in obtaining accommodation with their price structures, particularly at the lower to middle sector of the market. If you reach out to these they will happily look at planning groups with you, and in the majority of cases this would be 12-18 months ahead of time with very acceptable rack rates available.

My own opinion would be to approach the other mid to large sized hotel operators there are within 50 miles in any direction and meet with them and sound them out as to their interest to lease the property from you. You may need to give a 15 or 20 year lease with a 5 year break but it is still preferable to taking a punt on one or two people who may or may not make it work, stick at it, have the skillset or funding required to keep it going.

I would feel you should not have any issues finding a current operator who will pass due diligence to take the site from you.

Good luck with it.

Excellent idea. Wouldn't limit it to hotels in a 50 mile radius, I would include any 3-4 star hotel chain in the country. Since you are looking at capital appreciation and probably thinking of selling it within the lease time, that could be a tricky part of a negotiation. First refusal at independently valued market rate could convince the third party.
You want the place kept in good condition and not run into the ground which can happen with a hostel, and anything State sponsored the place can get completely destroyed leaving you with huge bills to make it useable again.