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What should you compare besides the offer price?
Start with each buyer’s complete written offer and compare the same categories side by side. Ask for evidence behind assumptions rather than treating an indicative price as guaranteed proceeds. Business Queensland advises sellers to establish a value range with professional help and negotiate using the facts established through due diligence; Ashurst’s 2017 Australian tourism investment guide likewise illustrates reviewing indicative prices alongside key terms.
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| Offer dimension | What to compare or request | Why it matters |
|---|---|---|
| Net economics | Purchase price; debt to be repaid, assumed, or excluded; working-capital and inventory adjustments; transaction costs; estimated tax; and expected capital or brand-improvement spending. | The amount the seller may retain can differ substantially from the headline price. |
| Deal perimeter and structure | Asset, share, or hybrid sale; property interest; equipment and supplies; goodwill and intellectual property; receivables; contracts; employees; permits; brand and management relationships; and liabilities retained or assumed. | Different structures transfer different assets and risks, and can require different consents and tax treatment. |
| Funds and completion certainty | Proof of funds or financing status; deposit amount and refund conditions; buyer approvals; diligence scope; closing conditions; and buyer termination rights. | A high offer is less useful if financing or unresolved conditions make completion uncertain. |
| Time and process control | Exclusivity period; diligence and approval deadlines; target closing date; and what happens if a deadline slips. | Long or open-ended exclusivity can limit your ability to pursue alternatives while uncertainty remains. |
| Seller priorities | Confidentiality; employee, brand, and operating continuity; transition support; timing; and acceptable risk of delay or failure. | A seller seeking a dependable, prompt exit may rationally prefer a different offer from one focused on maximizing price. |
There is no source-supported universal weighting formula for these factors. Rank them against your own objectives, then test whether the offer still works after its assumptions and conditions are made explicit.
How do you estimate what you will actually retain?
Ask your accounting and tax advisers to model expected proceeds under each offer using the actual ownership structure, debt, tax basis, asset allocation, adjustments, and transaction costs. Compare the likely amount and timing of seller proceeds—not just the stated purchase price. Make clear whether the buyer proposes to take on any debt or whether it must be repaid at closing.
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Include any working-capital or inventory adjustment, costs of completing the transaction, and expected capital spending or brand-required improvements in the comparison. A property improvement plan associated with a franchise may add substantial cost; confirm whether one applies and who would bear it under the proposed deal.
Tax treatment depends on jurisdiction and structure. Chambers and Partners’ 2026 UK Hotel Management & Transactions guide identifies stamp taxes, VAT, corporation tax, and capital allowances as UK transaction considerations and states a 25% main UK corporation tax rate. That figure is not a universal hotel-sale tax rate or an estimate of an individual seller’s effective tax. Obtain advice based on the seller, the assets, and the transaction actually proposed.
Should you sell the hotel’s assets or the company?
In an asset sale, the buyer generally acquires specified property and business assets. In a share sale, the buyer acquires ownership of the company, which may continue to hold historical or unknown liabilities. A hybrid structure may also be proposed. Which is preferable depends on local law, ownership, tax position, financing, the assets and liabilities involved, and the consents required; neither structure is automatically better for every seller.
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Define exactly what each offer includes and excludes. Confirm whether the transaction covers the land or leasehold interest, furniture, fixtures and equipment (FF&E), operating supplies or stock, goodwill, intellectual property, receivables, customer data, vendor contracts, employees, permits, and any separate operating entity. Identify liabilities the buyer will assume and those the seller will retain.
Map property and operating entities
If the hotel property and its operation sit in separate entities—often called PropCo and OpCo—map both. Identify intercompany leases, services, debt, and revenue or cost allocations, then confirm which entity or interests each offer covers. The 2026 UK guide notes that a transaction may involve one or both entities; the actual structure and consequences require advice specific to the seller and jurisdiction.
What happens to contracts, staff, and the hotel brand?
A hotel is both real estate and an operating business. A sale can involve employees, licenses, supplier arrangements, management agreements, franchise rights, intellectual property, and other operating assets as well as the property. Do not assume that an agreement transfers automatically because the buyer has offered to purchase the hotel.
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Management, franchise, and brand agreements
Review change-of-control, assignment, termination, fee, and buyer-approval provisions in management and franchise agreements. The American Bar Association’s US-focused discussion notes that franchise arrangements are often personal to the owner and that a buyer may need franchisor approval for a new license. That is not a rule for every jurisdiction or contract: confirm the governing agreement and local law. Check for any associated property improvement plan, its cost, and whether completion or approval is a condition of the deal.
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Suppliers, employees, licenses, and permits
Check transfer, termination, and consent terms in property-level service agreements—for example, laundry, IT, or valet contracts—and in any master agreements. Establish what happens to employees, planning permissions, operating permits, and liquor licenses. The ABA discussion notes that US liquor-license transfer rules vary by state; confirm requirements with local advisers rather than assuming they apply elsewhere.
Disclosures and existing obligations
Have counsel review the proposed representations, warranties, disclosures, and schedules. Relevant matters may include physical and environmental condition, financial performance, bookings, litigation, contracts, alterations, employees, and encumbrances. Understand which statements the seller must make, what evidence supports them, and what remedies or liability may follow if they are inaccurate.
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Which conditions could prevent the sale from closing?
Identify every remaining condition and ask what the buyer can still terminate over. Conditions can include diligence, financing, regulatory or licensing approvals, third-party consents, and the transfer or approval of contracts and intellectual property. For each one, establish what information or action is needed, who is responsible, the deadline, and whether the condition can be waived.
- Financing: Request evidence of available funds or the status and terms of financing. Clarify whether financing approval remains a condition and when it must be satisfied.
- Deposit: Record the deposit amount, when it is due, who holds it, and the specific conditions under which it is refundable or forfeited.
- Diligence: Agree on the scope, information requests, access arrangements, and deadlines. Ask which findings permit the buyer to withdraw or renegotiate.
- Approvals and consents: List required buyer, brand, lender, regulator, landlord, or other third-party approvals as applicable. Confirm who will seek each one and how delay or refusal affects completion.
- Exclusivity: Set a definite period and clear milestones. Understand whether you may continue discussions with other buyers and what happens when exclusivity expires or deadlines are missed.
Ask the buyer to state the target closing date and explain the remaining steps to reach it. A stated date is a target, not a guarantee, while material diligence, financing, approval, or consent conditions remain outstanding.
How should you run the offer process?
A process may move from specialist advice and expressions of interest to shortlisted or revised offers, buyer diligence, negotiation and signing, satisfaction of conditions, completion, and post-completion adjustments. Ashurst’s 2017 Australian tourism investment guide is an illustration, not a guaranteed sequence or current legal checklist. It shows shortlisted investors providing indicative prices and key terms, with the seller potentially granting exclusivity to one bidder.
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- Prepare the sale perimeter and seller priorities. Identify the property, entities, operating assets, contracts, and obligations that may be included, as well as what you want from the sale: net proceeds, speed, confidentiality, continuity, or another priority.
- Obtain a supported value range and specialist advice. Use relevant financial, property, operational, and legal information to inform the range. Business Queensland recommends establishing value with professional help and grounding negotiations in due-diligence facts.
- Request comparable written offers. For each bid, request price, assumptions, inclusions and exclusions, structure, conditions, deposit terms, financing evidence, diligence requests, approvals, and target dates.
- Compare terms and test assumptions. Use the same comparison categories for each offer. Ask buyers to clarify gaps, show support for assumptions, and identify what could change their price or ability to close.
- Negotiate process protections as well as price. Set clear diligence and approval milestones, deposit terms, exclusivity duration, and consequences of delay. Avoid treating a higher indicative offer as a firm commitment.
- Review signing and completion obligations. Have advisers check the binding documents, conditions, required consents, completion steps, and any post-completion adjustments before committing.
A letter of intent may record proposed terms and process expectations, but its legal effect depends on its wording and local law. Business Queensland describes a suggested non-binding letter of intent followed by a binding letter of offer and purchase agreement in its Australian guidance; that sequence is not a rule everywhere.
Which advisers should help evaluate an offer?
Use qualified advisers for the actual transaction. Depending on the deal, the team may include hotel valuation or brokerage, legal, accounting, tax, technical engineering, environmental, and insurance specialists. Ashurst’s Australian process guide lists these adviser categories for hotel transactions. A hotel broker may assist with valuation, buyer marketing, negotiation, and completion, but that does not replace independent legal and tax advice.
Ask advisers to examine the specific offer documents and ownership structure, rather than relying only on a general valuation or a buyer’s summary. The legal and tax implications of assets, shares, debt, contracts, approvals, and liabilities are jurisdiction- and transaction-specific.
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