Hotel Exit Planning 101
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:
They’re too busy running the day-to-day.
They think it’s too early.
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.
