Motel Sales and Managing Employees

Motel Sales and Managing Employees

• Posted By Andrew Morgan

With the sale of any business all the assets owned by the business are transferred to the buyer at settlement.  One of the most important assets of any business is the employees.  At the best of times the importance of good quality employees is something that cannot be overlooked in any business, no matter what the industry.  This is highlighted at the present with it being very difficult to find workers across many industries.  The management market is very tight at present as well as finding good quality employees to fill roles.

In addition to finding workers, the standard of employees can literally make or break a business. Therefore when selling a motel, it is in the best interests of both buyer and seller to make the transition as smooth as possible for all concerned, especially the employees.  This I feel is something that is often overlooked or taken too lightly.

When an employee finds out the business they work for is being sold, the common questions always amount to the same thing – concern!  Is my job safe?  What will we do?  Where will we go?  How will we live?  If it’s not the motel owner worrying about the staff leaving if they find out the motel is for sale, it’s the staff worrying about whether they will have a job or not going forward if the motel sells.  The result is that this can lead to the employees feeling nervous about their future and they start looking for another position elsewhere.

Sellers are often unsure as to whether or not they should advise their staff that they are selling, in case they fear for their job and then leave.  In my experience I have found that the staff often know just about everything that is going on around the business, and find out very early in the process that the business is for sale.  Very few businesses can function effectively without good quality employees, therefore their jobs are, in most cases, going to be secure.  Most new owners initially retain all the existing staff in order for there to be a smooth transition at and after settlement.  Obviously this is different for managers, who may not be required if the new owners are going to operate the business themselves.  They will however still need the staff other than management in these instances.  This being said, there are many motels run under management nowadays and the sale transactions often includes the retention of all employees, including the managers.

How the motel operator manages the sale with the staff is going to determine whether staff want to leave, or remain satisfied that their position will be safe upon a change of ownership.  Upfront communication with the staff about the security of their position will hopefully put their minds at ease, although there is always the fear of the unknown, being the new owner and what changes within the business may occur.  Trying to hide the fact that the owner is selling, ends up with the employees finding out the business is for sale through another source.  This results in that person feeling as though their employer is being dishonest with them.  It can be difficult to try and hide the fact that you are selling your business when there are people walking around inspecting the property, and often as potential buyers can sometimes do, they can openly talk about the business within earshot of an employee showing limited discretion.

Often there may be an interested buyer who has turned up “on the quiet” to the motel, and is staying as a guest, not having informed the Broker or owner that they would be on site.  These people often have a tendency to discuss the business within earshot of the staff, be it the cleaners outside their room, or the staff in the restaurant.  Some will even ask the reception questions about the business which are more in depth than the usual small talk with a travelling guest.  Within one foul swoop the chinese whispers then start and all of a sudden everyone knows the motel is for sale, and the staff are left in a state of concern.

Selling a motel utilising an “off market” campaign has been extremely successful in recent times and as such is an excellent way to keep unwanted interest in the business away.  That may be from those one doesn’t want knowing their business, such as non-genuine interest, competitors or other brokers, etc.  Employees may be part of this list, however, this only extends to the point when prospective buyers wish to inspect the property.  When to advise the staff of a marketing campaign or pending sale is a tough decision, however history and experience has shown that upfront communication can save a lot of issues down the track.