the hotel business

[VitaMan]

Hotels are everywhere.....big towns, small towns, upscale, budget.

There is no unique product differentiation in the hotel business...it's just a place to sleep. How good a business can it be ? And where does all the funding come to build them ? Maybe mostly from franchising.....but even so, building a hotel is not an inexpensive proposition.

We do see many of the budget range hotels get resold and renamed. Wonder what the return on investment is.


In the old days, the phone in the room was 1 of the big revenue sources.

[Slitlikr]

I wish I could donate Google to you.

[Yabadabbado]

Sir there’s a difference between a hotel and a motel. A hotel has various revenue streams. Catering being probably the biggest, not to mention most upscale hotels are in the 260 range per night for a base room. In motels, which normally have about 40 rooms, imagine flipping a room 10 times a day at 25 dollars. Multiply that at the amount of rooms. It’s not a bad business. The biggest thing is own the real estate you sit on, so make money plus have value if you sell. Hotels, honestly, make money off of rooms but they have so many revenue streams besides that. Room service, the bar, etc and most hotels own what they are sitting on so it’s always that value again. The Omni galleria has been rebuilt 3 times behind floods. It’s money there sir.

[instfixer]

In Las Flores Hotel in Nuevo Progreso they have one room at $100 a night... it has a jacuzi as I remember and a stripper pole and they dont mind if you take a chick there for the night either.

[3Sum]

Here what I know. My father is a developer in NY and has done many office buildings and hotels for clients.

Hotel usually owned by a corporation. Motel usually owned by individual, say LLC. I noticed most Motels here in south is owned by Middle Easterners. They raise money to build one by family groups, small organization, or money coming overseas from Middle East.

They build a motel on a location they think the value will go up in 5 to 10 years. They hire a staff, pay taxes (except cash for horn dogs like us who use it for an 1hr or 2hrs), and they crack even or take a loss on the business (it’s a business write off). 5 years or 10 years down the line, a real developer with deep pocket offers them the double triple what they paid for on land so the real developer can build shopping centers, apartments, condo, etc. You get the picture.

Bottom line is they build motels on speculation that the land value will go up, not the business. Guess what so far it’s been true since beginning of time; land value will always go up. I personally know a guy who owns several Palace Inn who turned a million into several to hundreds of million in profits on the sale of the land.

A group outside of NY offered my father to some motels and he turned it down. They are cheap when using building materials and when it comes time to pay for work. All most all gas stations and motels here in Houston is owned by a Middle Easterners. Very smart business minded.

[bbkid]

^^^ that is the most sane post, and spot on, I might add, that's been said here in like.......forever ?