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Understanding How Motels Are Valued
One of the most common questions asked by motel buyers and owners is:
"What multiple is this motel worth?"
Unlike residential property, motel businesses are often valued using a multiple of adjusted net profit.
Understanding motel multiples is critical when buying, selling or valuing a motel business.
A motel multiple is the number used to convert a motel's adjusted net profit into a market value.
For example:
Adjusted Net Profit
$200,000
Market Multiple
3.5x
Indicative Value
$700,000
$200,000 × 3.5
This methodology is commonly used when assessing leasehold motel businesses.
Not all motels attract the same multiple. Factors that may influence value include:
Strong regional centres and popular tourism destinations often attract higher multiples.
Longer lease terms generally provide greater security and buyer confidence.
Higher and more stable profits often attract stronger buyer demand.
Well-maintained motels with modern facilities typically achieve stronger valuations.
Opportunities to increase occupancy, ADR or profitability may influence buyer interest.
While every business is different, motel multiples often vary depending on:
Understanding motel multiples can help owners:
Assess current value
Plan future improvements
Develop an exit strategy
Maximise sale outcomes
Need a Professional Assessment?
MotelsForSale.com.au can connect owners with accommodation specialists who can provide guidance on motel values, buyer demand and current market conditions. Complete the enquiry form below to request a confidential discussion.