What Multiple Do Motels Sell For?

Motel multiples in Australia differ sharply by structure. Leasehold motels generally transact at a lower multiple of Adjusted Net Profit than freehold going concerns, because the leasehold buyer receives no land and bears lease-expiry risk. Within each structure, the multiple moves with the length of the remaining lease, the quality and consistency of earnings, location, and asset condition.

Any single number quoted without context — 'motels sell for X times profit' — is close to meaningless. The multiple is an output of risk assessment, not a fixed market price list.

Consistent profit over three or more years. Clean, verifiable books. A long lease with options (for leaseholds). Strong location with diversified demand drivers. Well-maintained rooms and plant. A business that runs without over-dependence on the current owner.

Each of these reduces buyer risk — and reduced risk is what a higher multiple actually pays for.

Volatile or declining profit. Accounts that require extensive adjustment. Short remaining lease terms. Heavy deferred maintenance. Dependence on a single demand source, a single large account, or the owner personally. Recent one-off events — floods, road works, major competition changes — that cast doubt on the future.

Most low multiples aren't the market being harsh. They're the market pricing genuine risk.

Multiples are most useful as a comparison lens: why does this motel trade at a different multiple than that one? Answering that question tells you what a property must demonstrate to achieve a strong price.

If you're preparing to sell, the better question isn't 'what multiple will I get?' but 'what risk can I remove from a buyer's assessment?' A confidential appraisal maps exactly that.