Motels

There are three typical types of motel business structures, including:

An operator owns the freehold and runs the business.  A freehold interest.

1. An investor owns the real estate and leases the property to an operator who runs his own business.  A Lessor’s (Investor) and Lessee’s (Tenant) interest exist here, and both are free to sell their interest.
2. The franchise model, where there is an investor (Lessor), the franchisor (Lessee) and the Franchisee (Sub-Lessee).  Again each party is able to sell his interest.

Motels are a long established and easily recognized business within Australia and vary widely in size, age and style of operation.  They all have their place and are dependent upon many factors that affect the accommodation business and it’s success.  For example:

The location and physical position.

The broad and local economies.

The quality of accommodation offered.

Annual events.

It’s fair to say that the success of a Motel business is location centric, in that it can be on a major highway in a country location, half way between two major cities and it will capture the weary traveler looking for a break in the driving.  However put that same Motel 2 kilometres off the same highway and both occupancy and tariff will be inferior.

In summary the better performing Motel businesses, in general, have a good high exposure and easily accessible location.

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Email: admin@australianvaluers.com.au