let's play guess the resort

[SteveFass]

I found this listing at diveshopsforsale.com

Central America: Roatan
Asking Price: $1,700,000
Ocean front Hotel and Dive Operation in Roatan.

Successful and well established dive resort located in front of one the world's second largest reef.

The hotel consists of 11 guest rooms, 1 two-room manager suite, 3 rooms for employees' quarters, a fully equipped kitchen, a dining area, patio bar, dive shop and boat docks. Each of the 11 comfortable rooms has two queen-sized beds, A/C, ceiling fan, cable TV, and an en-suite bathroom.

I don't know guys, add a boat to this description and it sounds like paradise to me. I doubt I have the guts to drop everything and buy something like this, but a little knowledge couldn't hurt.

Can you guess from the description which resort this is?

I'm wondering what it takes to make a business like this (11 rooms, restaurant, dive shop) turn a profit and a reasonable income for the owner. Can a business like the one above do that? What niche would you suggest (price, level of luxury, services)? Do you know of any business journals or articles that would describe successful business models?

Anybody want to go partners?

 

[CODMAN]

Steve, I'm no expert on this matter so take it for what it's worth. But usually business this small usually need to go the extreme luxury route to be profitable! In this I mean exorbitant prices... and Exceptional sevice (to make the exorbitant prices worth while).

Would this be feasible on Roatan, which is renown for a great price/quality ratio? I personally doubt it. But maybe someone whith better business savy than me will give you a better insight into all this!

But it doesn't mean you can't dream of it!!

 

[Doc]

An internet search using several sophisticated search engines yielded only two hits.

Not in stone, but:

1) Reef House Resort, it has 11 rooms

2) Spyglass Hill, a disused property that would fit the description, yet wouldn't have any current gross annual sales to publish. I believe it is described as proerty #11-107 and is listed at $650,000 See it at http://72.14.203.104/search?q=cache...ml+ROATAN+"11+ROOMS"&hl=en&ct=clnk&cd=6&gl=us

Note "Shipwreck Key"... it's that rock just off the end of the RTB Runway... Great spot for a Carlos and Charlies.

You've obviously got the bug, big time. Look at the diveshopsfor sale.com listing for Tobago. That is a place I know well and is a potential gold mine.

 

[rleslie]

In very general terms, businesses can sell for 5 to 6 times owner's earnings (those funds that can be withdrawn or used by the owner for personal use). So...using 5.5 as an average, that means that the operation should be netting the owner approx. $300k annually OR $28,000 per room. If you keep each room booked 365 days (100%), that is $77.00 per room. With a 65% occupancy rate, that is $118 per night. Of course that is NET - after all expenses.

If you can buy it for $1.5 and $1mil is the value of the property, you are only paying $500k for the business operation. That's more like it, but you stil need $1mil to put down on the property.

Think that I will pass!!

 

[highdesert]

The ad refers to the Reef House in Oak Ridge, which is on the east end of the south shore, at the end of the paved road down the island. This was one of the first resorts on the island, maybe 35 yars ago. After one of the previous owner's relatives managed it, and manged to run it into the ground, the owner sold it to Larry and Carol Stevenson, a Canadian couple, who sold a minor interest to their daughter and son-in-law, Aussie Barry Kennewal. They all live on site and run the operation. If you go to http://www.tripadvisor.com/Search?where=body&returnTo=&geo=1&q=reef+house+roatan you'll see that Reef House rates No. 1 with guests.

If I was in the market for a resort with a great location, good facilities and staff, and a loyal clientele, I'd jump on it in a New York minute. It's at the top of our list of "must go back" places. It's not on the market due to any problems; it's very well run, but the owners just have some other objectives in mind.

Check out www.reefhouseresort.com

I should add that this resort is very successful without going the "exterme luxury" route. To the contrary, it is very low key and laid back, to the extent that you would never know that they run a very tight ship as far as management. Larry is a really sharp business person, and he knows how to save money.