The Powerball is getting to levels where I play. So I was looking at real estate. I started looking at Portsmouth, which has some nice places. But then I turned my gaze to Hampton Beach, where I noticed something interesting.
There are a ton of hotels for sale. Like, at least half a dozen. Several of them are big.
The pessimist wonders why there are so many hotels for sale, and whether market conditions in Hampton are poor for some reason.
The optimist thinks that six (at least) hotels all up for grabs is a great market opportunity. There are still competitors, so you’re not really a monopoly, but owning a bunch of hotels surely gives better market leverage than owning a single hotel. Other benefits include referrals (“No, we’re all booked for that weekend–but our sister hotel down the street has openings…”), and a sort of ‘laboratory’: you can implement something in one and see how it works; say, a certain type of renovation, price increases, or changes in scheduling. (Plus, there could be economies of scale if you shared services between them, such as buying supplies in bulk and having handymen who serve all locations.)
And $3,000,000 for a 60-unit motel is $50,000 a room. I can only imagine that they need work, but I also imagine that if they were sold as condos, they’d fetch a lot more than $50,000 apiece. Although they’d probably need to be retrofitted for kitchens and the like.