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Accommodation and Tourism Providers Business Valuation Issues 

The accommodation sector includes hotels, motels, caravan parks, bed and breakfast units.  The tourism sector includes experience businesses, amusement park operators, recreational services and other regionally located businesses.

The key changes that influence an accommodation business valuation include:

  • Tourism activities

  • Population growth

  • Discretionary income

  • Property prices (and hence the property rents expected to be charged or earned)

  • Cost of labour

  • House sharing technology such as AirBnB

A similar range of issues impact tourism businesses, in addition discretionary income and reaching consumer markets are other key issues.

Some acquisition and merger opportunities exist as businesses seek scale, however many businesses lack systems and processes that facilitate a smooth transfer and the businesses often rely on owners.

Key Drivers of Accommodation and Tourism Provider Business Valuations

An accommodation business valuation is driven by key factors below such as: 

  • Number of rooms and occupancy rates

  • Location and Local and tourist population

  • Property prices and rent

  • Staff costs

  • Low reliance on owners with documented processes and systems

  • Effective management systems and integrated IT systems

EBITDA Margins range from less than 5% to 25%, depending on the size of the business, localtion, range of services, technology and automation.

Typical EBITDA Multiple ranges we have observed are:

  • Revenue of $1m - $10m: 0.5x - 3.0x

  • Revenue of $10m - $20m: 2.5x - 4.0x

  • Revenue greater than $20m: 3.5x - 5.0x

Key Industry Statistics

According to IBISWorld, key statistics for the sectors relevant to these  industries include:

We have collated industry performance statistics based on ABS data and detailed them in a whitepaper, which can be downloaded from the link below.

What Makes a Business Highly Valuable?

SME Performance Whitepaper

Our Business Valuation Experience

Our accommodation business valuation experience and our tourist business valuation experience has included including business valuations for:

  • Multiple regionally located motels

  • Motel located in metropolitan Melbourne

  • Multiple bed and breakfast businesses located in regional Victoria

  • Extreme driving experience business

  • Day trip and overnight stay catamaran and yachting experiences

  • Multiple wineries across regional Victoria

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