How do I check a motel’s room rate changes across the year?
Compare the posted rates with what guests actually paid, month by month. Ask who sets prices, how often they change and what drives them: season, events, weekdays or competing motels. Then see whether the pattern can be repeated without the current owner.
Ask for the rate cards over time and the actual booking records, then compare the two. Discounts, long-stay deals, contractor rates and last-minute drops can make the real picture quite different from the sign out front. Note when the rates rise and fall, and what was happening nearby on those dates: festivals, sports, harvest, construction or road closures.
Then ask how decisions are made. Does the owner check nearby motels each week, use software, or rely on instinct? Is anyone else able to change the rates? Look at what happened in the weeks when rates were raised or cut. Did bookings fall, hold or rise? That gives you a sense of how guests react to price.
Finally, connect rates to cash. Use the statements to see how rate changes show up in revenue over the year, and plan your own cash flow for the slow stretch. Ask whether any regular guests have special deals that might end when ownership changes, and whether rates were ever held down on purpose to keep rooms full. Ask what the slowest month looked like and how the owner coped. Compare the rates you see with those at similar nearby motels, using their public listings, and note any room types that earn more than the rest.
Key takeaways
- Compare posted rates with what guests actually paid across the year.
- Ask who sets prices and what the decision rests on.
- Look for special deals that could end when ownership changes.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat are financial statements?
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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