Selling your hotel without disrupting its operations

A hotel is a trading business before it is a property. Throughout a sale, it keeps welcoming guests, paying suppliers, retaining staff and meeting its banking covenants. The price a buyer pays rests on those results. This guide explains how a sale can be run without the news getting out before the moment the seller chooses. Groundwork ahead of the sale is covered in a separate guide: preparing a hotel for sale.

The cost of news getting out too early

Talk of a sale is never neutral. Its effects are well known, and they compound.

• Staff. A general manager, head chef or head housekeeper who hears about the sale from a third party expects a change of management and starts listening to offers. Departures tend to hit the most sought-after people, those who carry the quality of service.
• Guests. Corporate accounts, event organisers and agencies with annual contracts hesitate to commit to a hotel whose future looks uncertain. Group business slows.
• Suppliers. Some shorten payment terms or ask for guarantees.
• Banks. The lender reviews its change-of-control or acceleration clauses and may harden its position before any offer exists.
• The franchisor or operator. A franchise or management agreement often contains consent, pre-emption or change-of-control clauses. Told too early, the partner can position itself, delay the process or weigh on it.
• The negotiation. A hotel whose sale is common knowledge becomes a “shopped” asset. Buyers know it has been shown, wonder why no deal was reached and negotiate accordingly. Any drop in trading during the process feeds straight into the price.

Confidentiality is therefore not a matter of the seller’s comfort. It protects the EBITDA, or EBE, on which the valuation rests.

Who knows what, and when

The principle is simple: each person is informed only when their involvement becomes necessary, and only of what they need to know. The table below sets out a typical sequence, to be adapted to each transaction.

This sequence is indicative. Landlord consent, a pre-emption right or the duty to inform employees may require a step to come earlier. It is built with the lawyer as soon as the mandate is signed.

NDA and anonymous teaser

Nothing without a confidentiality agreement

No identifying information is shared before a non-disclosure agreement is signed. It sets out the information covered, who may receive it (executives, and advisers who are themselves bound to secrecy), how long the undertaking lasts and what happens to the documents if talks end. It prohibits any direct contact with the hotel, its staff, operator, landlord, franchisor, banks, suppliers or guests: every question goes through the seller’s adviser. Signing comes with buyer qualification: identity, beneficial owners, financial capacity.

The teaser and the re-identification test

The first document a buyer receives is a two-page teaser, with no name. The care goes into the details that could give the hotel away: a neutral code name, location given at city or regional level, capacity and figures in ranges, no recognisable photographs, no mention of the seller, the operator or an identifying brand. The PDF metadata is cleaned.

Before anything is sent, one test is essential: someone who knows the local market tries to identify the hotel from the teaser and the booking platforms. If they manage it within a few minutes, the document is reworked. The same applies to competitors: naming the competitive set is often enough to locate the hotel.

Two-stage disclosure

When staff must know nothing, the information memorandum itself can remain anonymised. The name, address and photographs are then provided in a separate document, only at the viewing or at the letter of intent stage. The buyer has the trading data needed to form a view without knowing which hotel it is. Each copy of the memorandum is named, numbered and watermarked with the recipient’s name, so that any leak can be traced.

Viewings and data room

Viewings with no contact with staff

The viewing is the most exposed moment. It is organised by the seller’s adviser, at times agreed with the seller, in a way that draws no attention. The buyer asks staff no questions, keeps to the agreed route and does not come back alone. Questions are noted and dealt with afterwards in writing. Viewings are reserved for buyers genuinely able to make an offer.

A named, tracked data room

Detailed documents are not sent by email. They are placed in a data room with named, tracked access: every view is logged, rights are granted section by section and withdrawn if talks end. Personal data on employees is excluded or anonymised. The expected contents are covered in the guide the data room in a hotel sale.

Restricted circulation, no parallel channels

A confidential sale rules out listing portals, mass mailings and buyer lists contacted in bulk. Each buyer is chosen on the criteria they have declared (segment, size, location, intended structure, investment horizon) and approached individually. Each dispatch is recorded. That is what an off-market sale means.

Intermediaries are a risk too. A finder or independent consultant who presents the hotel on their own account multiplies the channels and blurs the price. At RR Hôtels & Finance, freelancers are bound by a confidentiality agreement and a non-circumvention clause: they may neither circulate the file nor deal directly with a buyer who has been introduced. An exclusive mandate also prevents the same hotel from circulating through several routes at different prices.

Informing employees in advance

In some French companies, the sale of a business (fonds de commerce), or of a majority stake in a company, must be preceded by notice to employees so that they can, if they wish, put forward an offer to buy it. This is the scheme known as the “loi Hamon”. Its scope, its exceptions and the notice period before the sale depend in particular on the size of the company and the nature of the transaction. Where a works council (comité social et économique) exists, it may also need to be informed or consulted.

These rules do not conflict with confidentiality: they set the moment at which employees must be told. Employees informed in this way are under a duty of discretion, but the information does leave the small circle of the transaction. The timetable is therefore built with the lawyer from the start of the mandate, since it determines the signing date. Failure to comply can be sanctioned: this is not a formality to sort out the day before completion.

On the sale of a business, existing employment contracts in principle transfer to the buyer (article L.1224-1 of the French Labour Code). This too is prepared with the advisers, well in advance.

Key point: when staff are told is decided at the start of the mandate, with the lawyer, not on the day rumours begin.

Preparing the announcement to staff

The announcement is the last stage of confidentiality. It is prepared like the others.

• One shared message. Seller and buyer agree on what will be said: the reasons for the sale, stated plainly, the buyer’s plans, and what will not change.
• A clear order. Hotel management is told first, then heads of department, then all staff, ideally on the same day to avoid distorted versions. Contracted clients and key suppliers follow, with a suitable message.
• Answers ready. Employees’ questions are predictable: contract, length of service, pay, organisation. The answers are prepared with the advisers, particularly on the transfer of contracts.
• The buyer’s presence. Where possible, an early visit by the buyer to the teams sets the tone for what follows.
• Continuity. The seller remains available during the transition period provided for in the sale and purchase agreement, which secures the handover of operations.

A controlled announcement, at the chosen moment, is the outcome of a sale run without public circulation. The steps followed are described on the sale process page, and support for sellers on the hotel sale page.