Dombowsky said there is a gap between what buyers are willing to pay and what vendors expect to get. Prices are down at least 25 per cent from the 2008 peak he said, with franchise (or flagged) motels achieving the better sale prices.
One steady trend is retirees from Saskatchewan and Alberta looking for a motel in relatively balmy B.C., he noted.
An example of current prices is an 82-unit Travelodge in the East Kootenays priced at $4.2 million, or around $50,000 per suite. A non-flagged motel of the same size and condition would likely sell for $35,000-$40,000 per suite.
Financing, while getting better, remains difficult, particularly on non-flagged hotels.
“You would need at least a 50 per cent downpayment,” Dombowsky said, adding that a franchise motel may attract 60 per cent financing. Credit Unions remain among the most active lenders in the motel market.
