What You Should Know About Buying a Motel
What You Should Know About Buying a Motel
Buying a motel in Australia can be a great investment, offering both lifestyle and financial benefits. Whether you are an experienced investor or a first-time buyer, it’s important to understand the key factors that can impact your success.
Here’s what you need to know before making a purchase.
Understanding the Motel Industry in Australia
Motels play a crucial role in Australia’s tourism and hospitality sector, catering to travelers, business professionals, and long-term guests. With domestic travel increasing and international tourism rebounding, motels in key locations are experiencing steady demand. However, profitability varies depending on location, occupancy rates, and operational efficiency.
As of the year ending March 2024, Australia recorded 7.2 million international visitor trips, while in the September quarter of 2024, domestic tourism remained stable compared to the same period in 2023, with a 1% increase in spending (an additional $396 million) and a 3% rise in overnight trips (790,000 more trips).
Total visitor expenditure in Australia is projected to surpass pre-pandemic levels this year and is expected to reach $227.7 billion by 2027.
For insights on Australia’s tourism trends, visit Tourism Research Australia.
Leasehold vs. Freehold Motels
When purchasing a motel, you’ll typically choose between a leasehold or freehold property:
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Leasehold Motels: You buy the business but lease the property. This option has lower upfront costs but requires ongoing rent payments.
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Freehold Motels: You own both the business and the property, offering greater control but requiring a larger initial investment.
Both options have pros and cons, so consider your financial position and long-term goals before deciding.
Location Matters
When buying a motel, it's important to remember that the success of a motel largely depends on its location. High-demand areas include coastal regions, major highways, and tourist destinations. Conduct market research to understand occupancy trends, competitor performance, and seasonal variations.
A good location ensures steady foot traffic and repeat business. For example:
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Coastal Regions: Locations such as the Sunshine Coast, Gold Coast, and Great Ocean Road attract high volumes of holidaymakers, ensuring strong occupancy rates year-round.
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Highways and Transit Hubs: Motels located along major highways or near airports, such as those on the Hume Highway or near Sydney and Melbourne airports, cater to business travelers and road-trippers looking for convenient accommodations.
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Tourist Destinations: Areas like the Blue Mountains, Barossa Valley, and Cairns experience high seasonal demand, particularly during peak holiday periods and festivals.
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Regional Towns: With increasing domestic travel and workforce mobility, motels in mining towns and regional centers (e.g., Broken Hill, Kalgoorlie) often serve corporate clients and long-term guests.
Government resources like the Australian Bureau of Statistics can provide useful demographic and business data.
Financial Considerations and Due Diligence
Before buying a motel, assess its financial health. It’s worth reaching out to consult an accountant and business advisor.
Key factors to review include:
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Revenue and profit margins
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Occupancy rates
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Operational expenses
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Staff wages and management structure
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Existing bookings and contracts
Licenses and Regulations
Owning a motel requires compliance with various regulations, including:
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Business registration and licensing
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Food safety standards (if offering meals)
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Fire safety and building codes
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Employment laws
Visit Business.gov.au for details on regulatory requirements.
Looking to buy a motel in Australia? These businesses may be your perfect fit.
Broken Hill Outback Resort – Freehold Caravan Park & Resort
Price: $3,200,000
A modern, fully managed resort in Broken Hill with 24 self-contained deluxe cabins, 78 powered and 13 unpowered sites, a 70-seat restaurant, bar, bistro, and camp kitchen. Set against breathtaking Outback landscapes, this unique investment offers strong growth potential.
Leasehold Motel in Greater Bendigo
Price: $370,000
An excellent entry-level leasehold motel with 12 refurbished suites, guest amenities, and a 5-bedroom owner’s residence. Strong financials with a 40% buyer's yield. Located in a prime regional area with a tightly held market.
Boutique Motel for Sale – Gympie, QLD
Price: $1,590,000 WIWO
A premium 9-room boutique motel, only 7 years old, successfully operated by one family. Positioned on the new main road into town, benefiting from strong corporate clientele and high occupancy. Net profit of $204k for 2022/23. Easily managed by a single person or couple, with potential for further growth.
Swansea Holiday Park – Premier Holiday Destination in Tasmania
Price: Contact Agent
Located just 50 metres from a stunning sandy beach in Swansea, this top-quality holiday park features 23 refurbished cabins, 36 powered sites, a fully renovated 4-bedroom home, and excellent guest facilities. With a 2024 annual revenue of $946,489, this profitable business is currently run under management and offers a great opportunity for owner-operators or investors.
Motel Leasehold in East Gippsland
Price: Contact Agent
This well-established 14-room motel, part of a strong accommodation chain, is located in a thriving regional town with excellent access to local attractions. The property includes a 3-bedroom manager's residence, an inground pool, BBQ area, and guest laundry. A long lease is in place with options extending to 2041. Energy-efficient with a 64-panel solar system, this motel presents a fantastic investment opportunity.
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About the author
Catherine Mangana
Customer Support
Catherine enjoys generating articles that highlight some of the opportunities that are now available for purchase on Bsale. She hails from a family of ...
