Now is your chance to buy the Sosua Bay hotel for only 65 million USD!
144 Rooms , using rudimentary Hotel value Math , like Room revenue Multiplier , this Hotel at Full occupancy 365 days a year ,. @ $65 average/ room ..
and that is Generous , Maximum Value is around 17 MIL.. Someone may pay 20 Mil for it ,if they have Big Plans . Curious to see what happens .
So that would add another $5 million if the casino pays decent rent. About the only other tenant is the gym on top and they don't pay much in rent.It also includes the building across the street that has the casino.
There is a set method for valuing hotels, you take the average room rate achieved, multiply it by the occupancy, then multiply this by the profit margin and then multiply that by 10. In other words 10 times the profit. No hotel could possibly achieve 100% occupancy - some rooms always need to be blocked for one reason or another and we have hurricane season. In Sosua I would suspect 70% would be a fairer number. So 144 (rooms) x 0.7 (occ) x $65 (ARR) = $2,332,512 projected revenue per year.
Now of this revenue, 18% is paid in ITBIS. And 15% will be paid to the travel agencies like Hotels.com. And then I imagine a big chunk, maybe another 18% currently, will cover electricity bills as all those rooms use a lot of AC. And then you have your salaries, and your food for breakfast etc. etc. So I would imagine absolute top-side if the planets all align, they wouldn't achieve more than a 30% margin. So 30% of $ 2,332,512 is $699,753, that's the most profit you could expect to make in a year.
And now multiply that by 10, and you get the market price (on which you would obviously negotiate) of US$ 7M. So basically if you bought it for $7M and everything worked out as you wanted it to, you could pay back your investment in 10 years, or put another way get a 10% return on your investment. If the price gets any higher, then this return is lower and to be honest you'd be better putting your money in a bank or in other types of property like apartments with less risk and less hassle.
I'm using a " 5 " multiplier . OF the Gross .. my #s are accurate ..(FULL occupancy not necessary , its a guide to get a baseline, Room Revenue ( gross) Multiplier is industry standard .There is a set method for valuing hotels, you take the average room rate achieved, multiply it by the occupancy, then multiply this by the profit margin and then multiply that by 10. In other words 10 times the profit. No hotel could possibly achieve 100% occupancy - some rooms always need to be blocked for one reason or another and we have hurricane season. In Sosua I would suspect 70% would be a fairer number. So 144 (rooms) x 0.7 (occ) x $65 (ARR) = $2,332,512 projected revenue per year.
Now of this revenue, 18% is paid in ITBIS. And 15% will be paid to the travel agencies like Hotels.com. And then I imagine a big chunk, maybe another 18% currently, will cover electricity bills as all those rooms use a lot of AC. And then you have your salaries, and your food for breakfast etc. etc. So I would imagine absolute top-side if the planets all align, they wouldn't achieve more than a 30% margin. So 30% of $ 2,332,512 is $699,753, that's the most profit you could expect to make in a year.
And now multiply that by 10, and you get the market price (on which you would obviously negotiate) of US$ 7M. So basically if you bought it for $7M and everything worked out as you wanted it to, you could pay back your investment in 10 years, or put another way get a 10% return on your investment. If the price gets any higher, then this return is lower and to be honest you'd be better putting your money in a bank or in other types of property like apartments with less risk and less hassle.
refer back to my prev comment about Hotel theft ..( this is common knowledge for that hotel, especially the Victoria House side)Quick show of hands: How many here think that hotel operated at anywhere near 50% capacity when it was functioning?
If it were turning a profit, it probably wouldn't be for sale.
I heard he is in a nursing home and that his wife is selling off all of his assets.Anyone know if Armando is still around? He went through a lot of trials and tribulations a few years back
I heard he is in a nursing home and that his wife is selling off all of his assets.