Mini-Hotel | Corfu Island, Greece | ˆ795,000 euro
Hotel is located in the Northern part of picturesque Corfu Island. It consists of a 2-storey building for 16 rooms and a separate 200 sq.m. cottage. Hotel is just 300 m from the sea. It sits in the middle of a tourist town with developed infrastructure, banks, shops, lots of dining options, taverns and cafes.
Lot size: 4000 sq.m
Hotel building: 2-storey
Cottage: 1-storey
Hotel Area: 620 sq.m
Cottage area: 200 sq.m
Rooms: 16 (not including cottage) - 8 rooms for double-occupancy, 8 rooms for 3-5 occupants (family rooms)
Distance from sea: 300 m
Distance from airport: 14 km
Facilities: Bar-restaurant, 3 wells for individual water supply, satellite TV, Internet, parking, solar panels.
Calculation of profitability (ROI)

Presently this hotel is operated only during the high season: from May 1 to October 15. However, it is fully equipped for the year round use. Extending the seasonal use is one of the expansion possibilities. Also the bar-restaurant for 20 seats provides extra income.

Income calculation

From June 15 to September 1 (high season)
Occupancy: 90%
Doubly occupancy room rate: ˆ40 / per day
Family room rate: ˆ60 / per day
Cottage rent: ˆ180 / per day

From May 1 to June 15 and from September 1 to October 15
Occupancy: 80%
Doubly occupancy room rate: ˆ30 / per day
Family room rate: ˆ40 / per day
Cottage rent: ˆ120 / per day

Occupancy level of bar-restaurant: : 70%

Combined income for the season: ˆ147,000 euro/year
Expenses calculation

Property tax: ˆ1,350
Salary: ˆ14,500 (2 maids, barman, cleaning, laundry, gardening)
Electricity and water: ˆ5,650
Repairs: ˆ3,000
Supplies: ˆ2,500
Other: ˆ1,000 (telephone, Internet, satellite TV, etc.)

Combined expenses for the season: ˆ28,000
Current finances and outlook

Yearly profit of the hotel is: ˆ119,000 euro.

The asking price is ˆ795,000.
The actual purchase price can be ˆ700,000
ROI (Return on investment): 17% / year

Income tax in 2016 was: 29%

One of options for expansion of the business is extending the seasonal use of the hotel up to the year round use. This will require conversion of the hotel, during the low season, to theme-vacation services aimed at specific groups of tourists. That would help increase profitability in 30-50%.

Purchase of this hotel as an investment is very attractive due to current conditions of real estate market in Greece. The prices have been fallen for several years and they have reached the bottom. Most likely, the prices will go up starting from 2018.

Also a good strategic location of this hotel allows upgrading its rating after some restructuring is done and a concept is changed. Then the room rates can be raised. Besides, this will increase the hotel's market value.

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