When and How to Start Preparing

Hotel Exit Planning 101

April 22, 20254 min read

Most hotel owners don’t plan their exit — they react to it. Whether triggered by burnout, a surprise offer, or personal circumstances, many owners find themselves scrambling at the last minute. The result? Missed opportunities, lower sale prices, and unnecessary stress.

But it doesn’t have to be that way. With proper hotel exit planning, you can position your business for maximum value, minimize risk, and walk away on your own terms.

This guide covers everything you need to know to start your exit strategy — even if selling is 1–5 years away.


Why Hotel Owners Delay Exit Planning (And Why That’s Costly)

Many owners avoid exit planning for three reasons:

  1. They’re too busy running the day-to-day.

  2. They think it’s too early.

  3. They don’t know where to start.

But the truth is, early planning gives you options. It gives you time to clean up your financials, improve key metrics like RevPAR and EBITDA, and address any red flags before a buyer sees them.

Example: A hotel in the Carolinas started planning 3 years before listing. They increased revenue by 22%, reduced staff turnover, and negotiated an off-market, above-asking deal with a strategic buyer.


Step 1: Define Your Exit Timeline

Ask yourself: When do I want to be out?

  • Less than 1 year? You’ll need to move fast and focus on cleaning up books and packaging the deal.

  • 1–2 years? Focus on boosting financial performance and reputation.

  • 3–5 years? You have time to build long-term value and prepare for premium buyer types.

The longer the runway, the more leverage you have.


Step 2: Clarify Your Exit Goals

Your plan should fit your personal and financial goals:

  • Do you want to retire completely?

  • Are you looking to reinvest into another property?

  • Would you prefer a leaseback and stay involved?

  • Do you want to maximize price or speed?

Understanding your outcome goals will guide the right strategy and buyer targeting.


Step 3: Know What Buyers Look For

Serious hotel buyers — especially private equity or strategic operators — evaluate:

  • Consistent cash flow (EBITDA)

  • Clean financials and systems

  • Property condition and deferred maintenance

  • Online reviews and brand reputation

  • Competitive RevPAR and occupancy rates

  • Staff stability and retention

The better you look on paper and in person, the more interest you’ll attract.

Pro Tip: Buyers love consistency. Show 3 years of steady growth and you’ll attract stronger offers.


Step 4: Clean Up Your Financials

Sloppy financials are the #1 deal killer.

  • Separate personal and business expenses.

  • Get a clean P&L and balance sheet.

  • Align P&L to tax returns.

  • Consider a Quality of Earnings (QoE) review.

Example: One owner shaved $70k in personal expenses off their books before listing. Their adjusted EBITDA went up — and so did their valuation.


Step 5: Improve Key Performance Indicators

To command top dollar, focus on increasing:

  • EBITDA: Net profit before taxes, depreciation, etc.

  • RevPAR: Revenue per available room

  • Occupancy: % of rooms booked year-round

Tactics:

  • Upsell premium rooms

  • Introduce dynamic pricing

  • Improve direct booking rates

Incremental increases can add hundreds of thousands in sale value.


Step 6: Strengthen Operations

Buyers want to step into a well-oiled machine.

  • Document your SOPs

  • Develop a strong management team

  • Automate marketing and booking processes

Even if you're involved in day-to-day, start delegating. It improves valuation and eases transition.


Step 7: Fix Deferred Maintenance

Property neglect kills deals or triggers massive discounts.

  • Repair HVAC, roofing, plumbing

  • Modernize common areas

  • Replace outdated linens or technology

Pro Tip: Keep a CapEx log to show ongoing reinvestment in the property.


Step 8: Prepare for Due Diligence

Start building your hotel “buyer folder” now:

  • 3–5 years financials

  • Lease or deed

  • Franchise agreements

  • Licenses and permits

  • Insurance policies

  • FF&E list

  • Vendor contracts

  • Staff info and org chart

Being prepared shortens the deal cycle and boosts buyer trust.


Step 9: Evaluate Your Buyer Types

Each type comes with pros and cons:

  • Individual buyers: Flexible but often need financing

  • Strategic buyers: Likely to pay more for synergy

  • Private equity: Quick closings, aggressive negotiations

  • Hotel groups: Look for expansion and often buy with cash

Your advisor can help vet the right fit based on your goals.


Step 10: Get a Valuation & Advisory Team

Finally, work with a hotel-savvy business advisor. They’ll help:

  • Provide a formal valuation

  • Identify hidden value drivers

  • Position your hotel effectively

  • Attract and screen serious buyers

  • Negotiate favorable deal terms


Final Thoughts: Plan Early. Exit Smart.

The best hotel exits don’t happen by accident. They’re engineered years in advance by owners who saw the opportunity before the urgency.

If you’re even thinking about selling in the next 1–5 years, the time to start planning is now.

Your future self will thank you.

👉 Need a custom exit plan for your hotel? Schedule a free exit readiness call today.


Anthony Rivas is a business advisor and M&A strategist specializing in helping hotel owners maximize their valuation and exit on their terms. With deep roots in real estate and private business sales, Anthony brings a sharp eye for value, strategic deal structures, and buyer psychology. He began his journey in the M&A space with the NYBB Group and now partners with HedgeStone to help owners navigate high-stakes transitions with clarity and confidence. When he's not advising clients, you’ll find him connecting with entrepreneurs, studying market trends, or out walking with his two dogs.

👉 Connect with Anthony on LinkedIn: linkedin.com/in/thebestbusinessadvisorintown

Anthony V. Rivas

Anthony Rivas is a business advisor and M&A strategist specializing in helping hotel owners maximize their valuation and exit on their terms. With deep roots in real estate and private business sales, Anthony brings a sharp eye for value, strategic deal structures, and buyer psychology. He began his journey in the M&A space with the NYBB Group and now partners with HedgeStone to help owners navigate high-stakes transitions with clarity and confidence. When he's not advising clients, you’ll find him connecting with entrepreneurs, studying market trends, or out walking with his two dogs. 👉 Connect with Anthony on LinkedIn: linkedin.com/in/thebestbusinessadvisorintown

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