Tourism to boost accommodation boom

As tourism numbers continue rising in both domestic and international travel, the accommodation sector is reaping the rewards and showing a steady increase year-on-year. The recent release of the draft, Aotearoa-New Zealand Government Tourism Strategy, indicates the proposed visitor levy is estimated to bring an additional NZD$80m each year. International visitor numbers are expected to increase 4.8 percent per annum. This additional pool of money is intended to support and sustain this forecast (shared between tourism and conservation).

In addition, the latest National Tourism Infrastructure Assessment (2017), identifies visitor accommodation as the leading area likely to add the most value to the tourism industry. This provides a huge scope within the commercial accommodation sector to capitalise on this projection.

However, the accommodation sector, as attractive as it may be, does require specialist knowledge and expertise. There have been some changes in the market – notably, an increase in syndications buying businesses, including those in the 50-plus age group teaming up with family and friends to form multi-ownership deals, and a surge in interest from Private Equity groups.

While these acquisitions often provide a premium price, the offers are typically conditional, requiring a number of acquisitions for the desired aggregation result.

As a seller, there are many compliance and due diligence matters that need to be sorted to ensure you’re in a prime position to sell with minimal hassles, for example:

  1. Prepare all sale documentation well in advance – from legal to financials.
  2. Ensure system reports match financials and GST returns.
  3. Ensure all stakeholders are easily accessible – including accountants, solicitors, etc.
  4. Allow flexibility in your schedule for potential buyer inspections.
  5. Have any additional information that may assist with the sale process on hand.

“At LINK, we’ve always placed an importance on having brokers with the right expertise, which is why we’ve established a team of 12 specialist accommodation brokers to ensure all parties are taken through the proper process on both the buying and the selling side of the equation. They are the most experienced and most effective brokers, consistently delivering the best results for sellers,” said Aaron Toresen, CEO, LINK.

With offices throughout New Zealand, LINK has a vast network of qualified brokers to help you capitalise on this tourism and accommodation boom. Visit www.linkbusiness.co.nz