HVS Brokerage & Advisory, in cooperation with Eric Vincent Guerrero, as the sole and exclusive advisory firm to ownership, presents the opportunity to acquire the 63-key Best Western Natchitoches Inn. This well-performing hotel asset would be ideal for an experienced owner/operator. The property has been well maintained, having undergone an extensive $1.5-million renovation approximately six years ago.
Strong-Performing Asset with Value-Add Component to Reduce Expenses for “Hands On” Investor
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The hotel has a stable top-line operating performance with an average rooms revenue of $1,150,000 (rounded) over the last three years.
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The hotel achieved $1,280,000 (rounded) in rooms revenue last year, registering a $55 RevPAR level–its highest performance since 2021.
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The hotel’s RevPAR penetration index has maintained a steady average of approximately 69.0%, suggesting substantial potential for an investor to employ a value-add business model to implement aggressive sales tactics and capture more demand to maximize RevPAR penetration.
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Per the STR data, the hotel ranked sixth out of six competitive hotels in terms of occupancy, with a 78.0% penetration index; in addition, it recorded the lowest RevPAR among the competitive set for the trailing-twelve-month period (TTM) ending February 2024. Given the midscale brand affiliation, and upon the completion of the change-of-ownership property improvement plan (PIP), there is flexibility for a new operator to increase occupancy and improve RevPAR.
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Per the 2023 financial statement, the hotel achieved a gross operating profit (GOP) of only 38.7%, leading to a $348,700 NOI flow-through. Great upside exists for a more “hands-on” owner/operator to restructure the hotel’s operations and boost NOI flow-through. In the HVS five-year pro-forma projection, a new operator could achieve GOP levels north of 45.0% of total revenue.
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Based on HVS pro-forma projections, stabilized rooms revenue next year is anticipated to exceed $1,430,000 ($62 RevPAR), with an NOI flow-through of $504,000 (rounded).
Excellent Location near Corporate & Leisure Demand Generators
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The property boasts a strategic location just off Interstate 49 and serves a mixed clientele consisting of oil & gas (O&G) workers, construction workers, and transient highway travelers.
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The property is proximate to Downtown Natchitoches; local attractions and demand generators include Northwestern State University, the Natchitoches Jazz/R&B Festival, Louisiana Summer Fest, the NYP Pub Crawl, and youth sporting events at the newly constructed, multimillion-dollar sports park.
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Growth in the lodging sector in Natchitoches is anticipated to be driven by the local economy’s strength and diversity. The area attracts both working-class and leisure-related demand, which is expected to continue.
Discount to Replacement Cost
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This opportunity provides an investor the ability to acquire the property at a price below replacement cost at $77,777 per key.
Limited Hotel Construction in the Area
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Over the past 14 years, only three new hotels have opened in Natchitoches, creating a market environment with reduced competition.
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Holiday Inn Express & Suites Natchitoches, an IHG Hotel – January 2007
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Comfort Suites Natchitoches – March 2011
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Fairfield by Marriott Natchitoches – November 2013
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