How can I tell if a motel depends on one contractor or work crew for its bookings?

Ask the seller for bookings by guest type: transient travellers, contract crews, tour groups and long stays. Group them by company if possible. The point is to see how much of the occupancy comes from the biggest few accounts, especially in the quieter months, when a work crew can hide a weak base.

Then look at the paperwork. Is there a written agreement, a standing invoice or only a handshake? Who decides to keep booking: a site supervisor, a head office? Ask what rate they pay compared with other guests, and whether they pay promptly. A discounted rate on many rooms can look strong in occupancy and weak in income.

Finally, ask what is ahead. When does the project end, and are others likely to follow? Call the main account yourself if the seller agrees. Your accountant can compare revenue with and without the biggest customer, so you can judge whether the motel stands on its own. Also ask what the motel did before the crew arrived. If occupancy was thin then, it may be thin again afterward. Look at reviews and advance bookings from ordinary travellers for a sense of the base without the crew.

Key takeaways

• Break occupancy down by customer, and watch the slow season closely.
• Check whether the arrangement is written and who controls the decision.
• Ask your accountant to model results without the largest account.
• Look at what occupancy looked like before the main account arrived.