Apart hotel – business for sale, investments in Tenerife.
42 units in the hotel. The business for sale owns 23 of these units which is over the 50% + 1 unit quota required to hold the license.
Studios of 44m2 x 9 units sleeps 2 adults
1 beds of 72m2 x 6 units sleeps 4 adults
2 beds of 72m2 x 8 units sleeps 6 adults (these are converted 1 beds)
Private owners have:
Studios of 44m2 x 5 units sleeps 2 adults
1 beds of 72m2 x 14 units sleeps 4 adults
6 of these are available for sale as well.
Of the 19 units privately owned, they have 16 of them contracted long term to the hotel to be leased out.
Rental rates start at 50€ per night for a studio
Owners are paid 135€ per month for a studio (plus fees)
Owners are paid 185€ per month for a 1 bed (plus fees)
85% – 95% occupancy
Payments are made within two months of clients staying in the hotel when booking direct with hotel
Good ratings across all major review sites averaging 4 out of 5.
Current hotel contract with tour operator
Thomas Cook have contracted 34 of the apartments in the hotel.
This earns them 256,908€ for the Winter Season and 205,533€ for the Summer season.
Total income from Thomas Cooke contract = 462,441 per year.
Which is 37.26€ per apartment, per day.
The additional 5 apartments earn on average 100,000€ per year.
Which is 55€ per apartment, per day
(This has now been improved – a new 3 year contract has now been signed at a 20% increase in price)
The deal means no advertising, no transactions (credit card charges etc) no dealing with payment processing etc so cuts down hugely on administration
25 years in business, well established, solid income.
6 employees plus the owner:
3 x cleaners
1 x pool bar
1 x gardener
1 x night porter
Most owners in here have owned for a long, long time and he usually gets first option whenever they wish to sell.
Information about the running of the complex – interactions between owners, any debtors etc.
Owner is the president of the community. No debtors on the community. He has majority holding so can make & change rules at his discretion.
Reception is in one of the apartments and will be sold with the rest of them (Apartment number 1.)
Looking into having the reception outside, under the arch on the community land and then apartment 1 could be rented out.
At 55€ per night, this brings in an additional 20,000€ per year.
Poolbar is owned by community of owners. Storage rooms owned by community, pool owned by the community. He makes the money from the pool bar and it is profitable.
Rental contract details, standard terms and conditions that owners agree to, cancellation period, contract term etc.
He alters prices throughout the year depending on availability, has no obligation to provide them to affiliates so can take their bookings when he needs to and fill them himself at other times. Doesn’t put the prices too high as he wants the repeat business. (Although in my own opinion, correctly marketed it is not really necessary to lower prices for repeat business as you can generate new business on an ongoing basis and if done at a higher price then you have an increased budget for marketing.)
The peak months of January, February very likely could be priced higher as it is when demand far outstrips supply.
Turnover and profits – last few years
In 2013 they had 82.35% occupation over the 12 months.
Gross income 486,456€
Total costs 251,731€
Profit as a % of turnover: 48.25%
In 2014 they had 84.41% occupancy
Gross income 520,513€
Total costs 267,972€
Profit as a % of turnover: 48.51%
Increase in turnover year on year was 7.00%
Increase in profit year on year was 7.59%
These figures wqill now be higher with the new deal they have in place.