Assisting regional pub owners to maximise the value of their property

14 October 2019

It’s no secret that the hospitality industry is experiencing challenges on the back of changing consumer trends and an ageing population, particularly in rural Queensland. Mining downturns and crippling operating costs are seeing many regional pubs close their doors for the final time as they lose the battle to stay afloat.

Impact of current market conditions

The mining boom of 2002-2012 saw an increase in leisure expenditure for regional areas, with many owners purchasing rural pubs during this period of increased and constant demand.

Market conditions are now experiencing significant decline as mining projects come to an end and the population drifts back to major cities.

As a result, owners are now struggling to pay out commitments, often working 50+ hour weeks while relying on help from family members to manage the books, work behind the bar and oversee the day-to-day running of the pub.

Struggling to get off the merry-go-round, current owners are now trying to sell at a decreased regional hotel value.

The bank is not the enemy

It is often hard for owners to hear that the bank is not the enemy during this process. In fact, our experience has shown that communication and open dialogue with the bank is key to getting the best possible resolution.

Of most importance to the banks is the knowledge that they are communicating with owners that are operating as willing vendors – doing everything they can to have their pub ready for sale.

By working with the banks to be ‘sale ready’, you will maximise the value of the property.

We have assisted many owners’ in both buying and selling their property achieving excellent results with the cooperation of the financier. By being able to provide a clear understanding of the business and its operation, we have reduced business risk enabling our clients and their financiers to make the best decision and to achieve the best sale price as soon as possible.

BDO’s Business Advisory team are here to help 

BDO’s Business Advisory team is comprised of specialists who know how bankers think and operate.

Our team of experts include Certified Turnaround Professionals, registered insolvency practitioners, CPAs, CAs, former industry executives, valuation professionals and investment bankers who can provide practical advice on issues affecting the tourism and hospitality industry.

Armed with the insight into your financial position, we work with you to ensure the best possible financial outcomes while improving the quality of your current banking relationships.

Please contact us to discuss how we may be able to add value to your current financial arrangements.