At the beginning of this year, I wanted to buy a mountain lodge. It was an old A-frame hotel in one of Slovakia's less popular ski resorts. With 11 rooms and a price tag of 500.000€, it seemed to be a good opportunity.
My idea was to convert it into one of the concepts/designs I saw in the US and Canada.
Make it still affordable, with a focus on team events and group bookings.
And I thought that with an additional investment €500k I could make an epic and cash-flowing business.
From a socialistic dream to an opportunity in 2024
There are hundreds of such mountain hotels in Central/Eastern Europe.
They were typically built during socialism as hotels of state companies (well, all companies were state companies back then).
They were also used for school trips and gatherings of organizations like Scouts.
The quality of these constructions was low, and most haven't received any proper reconstruction since socialism fell.
So why are these these hotels interesting? 👀
- Scarcity: They are in very unique locations where it is not possible to build anything else
- Price: Nobody wants to buy these hotels, and the prices go down as they need more maintenance and are not energy-efficient
- Demand: The younger generation wants to visit such locations, but the options are typically a fancy hotel (expensive and not so cozy) or a budget but not nice cabin/guesthouse
- Seasonality: These properties have a lot of demand during summer and winter (if there is snow). If you can bring bookings in low/mid-season (I can), you are the winner.
So, there is plenty of room for building a scalable hospitality business as there are many of these hotels for sale.
It reminds me of a few hospitality companies in the US and Canada refurbishing old boring motels into trendy boutique hotels.
"OK, tell me finally about that A-frame hotel"
I hired an expert to visit this hotel and review everything.
The final report revealed all the risks and estimated investment (€380k). I decided to pass for three main reasons:
- The tricky ownership structure of the land - the seller owned the land under the hotel, but some areas right next to the hotel structure were not
- The road to the hotel is not maintained during the winter, and the only way to get there is by snowmobile = costs added to each single booking
- Structure of the property - sizes of corridors and rooms don't comply with current rules to get a hotel license (this was the most significant issue)
The boom of modern lodges in 🇺🇸🇨🇦
It has been a couple of years since I found Coachman. It's a mountain lodge at Lake Tahoe.
I scrolled through their Instagram and found this lodge's appearance before the refurbishment. It was an old inn.
There must be more of these restorations out there, right? Right.
I found more than a dozen of them (you can see them all in my research hub, if you are a subscriber). One of my favorites is Ozarker.
👋 Do you want to do this in Europe?
Let me know. I want to be involved.
