Hotel Ownership 101: 10 Smart Questions To Ask Before You Invest

August 18, 2025

Share this article

Picture
10 Smart Questions to Ask Before Investing in a Hotel
1. What is the location’s long-term potential?

  • Nearby attractions and demand generators (airports, business centers, universities)
  • Seasonality and occupancy trends
  • Competition in the area
  • Zoning and development plans

2. Is the property franchised or independent?
3. What are the historical financials and performance metrics?

  • Occupancy rate (Occ)
  • Average daily rate (ADR)
  • Revenue per available room (RevPAR)
  • Net operating income (NOI)

4. What capital improvements are needed?

  • Renovation history
  • Upcoming property improvement plans (PIPs)
  • Age of HVAC, plumbing, and roofing systems

5. Who will manage the hotel?

  • Management fees
  • Performance benchmarks
  • Experience in similar-sized properties or markets

6. What’s included in the purchase?

  • Inventory (furniture, fixtures, equipment)
  • Licenses and permits
  • Employee contracts or union agreements

7. What’s the local labor market like?

  • Local wage rates
  • Staff availability and training options
  • Employee retention strategies

8. Are there any legal or environmental issues?

  • Title searches
  • Environmental assessments (e.g., asbestos, mold, underground tanks)
  • Local code violations or legal disputes

9. How does the hotel rank online?

  • Guest reviews on platforms like Google, TripAdvisor, and OTA sites
  • Star ratings
  • How well the hotel responds to guest feedback

10. What insurance coverage is in place?

  • Existing business insurance policies
  • Claims history
  • Gaps in coverage (see below for more on this topic)

Why Business Insurance Is Essential for Hotel Owners

  • General liability – Covers guest injuries or property damage
  • Property insurance – Protects against damage from fire, storms, or vandalism
  • Business interruption – Covers lost income if the hotel must close temporarily
  • Workers’ compensation – Required in most states for employee injuries
  • Cyber liability – Protects sensitive guest data and reservation systems
  • Employment practices liability – Shields against wrongful termination or discrimination claims

Final Thoughts
At Desmond Insurance, we aim to provide comprehensive insurance policies that make your life easier. We want to help you get insurance that fits your needs. You can get more information about our products and services by calling our agency at
 
. Get your free quote today by
 
.
Disclaimer: The information presented in this blog is intended for informational purposes only and should not be considered as professional advice. It is crucial to consult with a qualified insurance agent or professional for personalized advice tailored to your specific circumstances. They can provide expert guidance and help you make informed decisions regarding your insurance needs.​

< Older Post

Newer Post >

Recent Posts

Preparing for Spring Storm Season

March 20, 2026
Preparing for Spring Storm Season: A Quick Insurance Check

Planting Seeds for Tomorrow

February 28, 2026
Planting Seeds for Tomorrow: Life Insurance for Children & Long-Term Security

Shannon Desmond Walz Named to Big I Kentucky Board of Directors

January 26, 2026
Shannon Desmond Walz, Vice President of Desmond Insurance, has been named to the Board of Directors of Big I Kentucky, the state association representing independent insurance agencies across the Commonwealth.  Big I Kentucky supports its members through legislative advocacy, education, professional development, and industry resources that strengthen independent agencies and the clients they serve

Preparing for the Winter Storm!

January 23, 2026
Winter Weather Is Here! Simple Steps to Protect Your Home, Your Drive, and Your Business
Show More

Contact Us

Still here — when you need us the most.