Sectors / Category

Annual turnover

  • Mandate: 29114
  • Added: 06 May 2016
  • 1690

Profitable and Established Hotel Business in Tranquil Karoo Town near Port Elizabeth

Eastern Cape, Eastern Cape and other areas
Mandate 29114
Added 06 May 2016
R 1,500,000* ZAR
Stock: R 0
Assets: R 378,000
R 55,817 ZAR
Willem Smuts
Aldes Algoa
Eastern Cape
Eastern Cape

Established for more than 130 years , frequently revamped and an icon in the hospitality industry.This business ( excluding the premises) is priced to sell!. Netting in excess of R61 000 per month for 12 month period to 28 February 2015.

R 1,500,000* ZAR
Stock: R0
Assets: R378,000
R 55,817 ZAR

Established for more than 130 years , frequently revamped and an icon in the hospitality industry.This business ( excluding the premises) is priced to sell!. Netting in excess of R61 000 per month for 12 month period to 28 February 2015.

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Fully describe the business's activities?
This is a two star hotel in the tranquil Karoo boasting with 19 bedrooms (all with TV, most with DSTV) a dinning room and a fully licensed Bar.Next to the Hotel is also a 2 bedroom and 2 bathroom flat included in the rental. The hotel also has a conference facility and a function room that can host 150 guests.

How long has the business been established?
The original hotel was built in 1878 and has had numerous owners since built. The hotel burn down in 1991, was rebuilt, modernized but retained its character and trading name.

How long has the owner had the business?
Tthe present owner of the business has been renting the premises since 2005.

How does the business operate on a daily basis?
The kitchen functions from 7am to 10 pm. Accommodation is 24 hrs and the Bar trades from 10 am to 12 pm.

How are the clients attracted to the business?
Clients are mostly attracted by word of mouth and a web site advertising.

What Advertising/Marketing is carried out?
By means of a web site and word of mouth advertising. A huge percentage of business is repeat business from satisfied customers.

Does the business have any contract work?
No contract work.

What competition exists?
Limited competition from another hotel, guest houses, B&B's in the town.

What are the seasonal trends?
The business is consistent throughout the year with a slight slow down in December.

Is the business VAT Registered?
Yes, the business is registered for Vat.

What VAT documentation is on file?
All Vat returns are on file.

Are there up-to-date Management Accounts available?
Management Accounts for two years ending February 2014 and 2015.

What Balance Sheet and Income Statements are available?
Annual Financial statements for year ending February 2014 and 2015.

What percentage of the business is cash/credit?
All business is 100% cash.

How could the profitability of the business be improved?
The hotel has a much better rating than a two star facility, but chooses to remain as such for competitive reasons. The profitability could also be improved by brochure circulation to travel agents etc.

Is Seller finance available and for what amount?
Seller finance is not available.

What is the total staff complement?
8 staff members plus one supervisor.

Give a breakdown of staff/ functions/ length of service?

Do any receive special perks or incentives?

Are they on contract?
All staff are on permanent contract.

Do any have management potential?
The supervisor has excellent managerial skills.

How involved is the Owner in running the business?
80% involved.

When does the current lease end?
The current lease expires end February 2017.

Is there an option of renewal & what period?
The lease contract is for a three year period with the option to renew for another 3 years.

What is the annual escalation %?
The present escalation on the rental contract is 6%.

What are the trading hours?
Kitchen from 7am to 22 pm. Accommodation 24 /7. the Bar from 10am to 12pm.

What is the square meters of the business?

Is a copy of the lease available?
A copy of the lease is on file.

Do you require a licence?
The Bar has a full liquor license is in the name of the lessor. you will be permitted to trade under this license, but advisable to have transfered into own name.

What lease deposit and/or other surety is required?
One month rental deposit will be required.

Are any items not included in the sale?
All items on the list are included in the sale.

What is their overall condition?
All equipment is in an excellent working condition.

Do any require repairing?
No repairs required at this stage.

How have they been valued ?
They have been valued at a realistic market related value.

Which assets are on lease/HP and with whom?
All assets and equipment is fully paid.

Are they presently insured?
All buildings, furniture and fittings and equipment are insured.

Is a full asset list on file?
Yes, a full list is on file.

This hotel is established since 1878 and has earned a reputation for excellent service, food and value for money. the hotel has always stood out as a icon in the hospitality industry of the area. the sales figures indicate a 29 % growth for 2015 compared to 2014. This is due to the wind terminal construction and the development of a local flying school. Thee are long term projects and it is estimated this growth figure would be sustainable for the next 5 years minimum.

The hospitality industry is competitive. Accommodation is offered by other B&B's in the area, meals at restaurants.

The premises can be more utilized for functions by pairing with event co-ordinators etc. for weddings, celebrations and year end functions. The nursing college is expanding and no additional accommodation is available.

There are other venues which offer relatively simular facilities. B&B's have always competed for accomodation.

What is the reason for the sale?
The owners wish to retire.

Why is this a good business?
This business is well established, profitable ( generating a return on investment of 45%) and can cater for any function required. The hotel has a unique character which will always attract customers and guests. The business is priced to sell!!

What is the price plus stock and the net profit?
The asking price is R1 500 000 and has netted R55 817 per month on average for the 12 month period to 28 February 2016

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