The average sales price for hospitality businesses is on the rise, key findings from the latest Market Intelligence Quarterly Report by ABC Business Sales shows
Hospitality business sale prices are up a massive 40 per cent compared to the same time last year, a stark contrast to the overall average price for SME businesses (excluding hospitality) that has increased by just eight per cent for the 12 months to June 2022.
Managing director Chris Small says the increase in sales prices is not being driven by demand activity from ‘vulture buyers’ looking for businesses on their knees and making lowball offers, but rather it represents a genuine bounce back in confidence for hospitality businesses.
"The main drivers of demand for hospo businesses include strong return on investment – often more than 50 per cent – as well as positive cashflows from day one, such as cash coming in prior to paying any bills.
"Plus with the renewed confidence of our borders now being open to all international visitors, the ‘certainty’ of no more lockdowns and potential buyers hearing about many hospo operators experiencing extensive waiting lists and not being able to keep up with demand, the appeal of these businesses is well and truly back on the rise.
“The significant percentage size of the average sales price increase is also a result of hospitality prices coming off a very low base in 2021 caused by the initial COVID period. But we are confident these current average prices – in the high $200,000 range – are more reflective of a normal market and will be sustained going forward."
