Austria: Many hotel businesses about to be handed over to new owners

Family businesses in the hotel industry were usually built up over decades of hard work. If the company is passed on, there is a lot at stake. It's usually about more than just money. A regulated succession accompanied by neutral experts is therefore the order of the day

Almost half of the hotels are planning a handover in the next 10 years. The transition of a family business to the next generation has always been a delicate matter. Inflation and economic pressures have reinforced this recently.

Even if it is a decisive step. Succession planning should not be driven by emotions. Rather, what is needed is a carefully planned strategic approach. If there is a precise timetable with defined steps and specific times, emotional concerns and reservations recede into the background. On the other hand, anyone who hands over under time pressure or sells in an economically difficult situation is taking a high risk.

Every handover should be done calmly. The interests of family members are best discussed at a family meeting. It makes sense to involve a neutral moderator. A written family constitution sets the common goal and direction. It serves as the basis for all other legal and tax issues. A realistic sequence of implementation steps is determined with the consultants. A family constitution is also useful if the business is passed on outside of the family. For this purpose, the Prodinger Tourismusberatung has developed a "business handover pyramid" with integrated modules.

Classic case: The transferor naturally first thinks of a transfer within the family. However, the children often have completely different interests and are not available to take over the business. If no suitable successor can be found in the family, the search extends to the extended family or to the circle of managers or employees. However, the entrepreneur can also lease the business or conclude a business management agreement (management contract). Another option is to use an external manager (host, director, general manager). Finally, the entrepreneur can also part with the business in one fell swoop by selling it.

Significant determination of company value

In the case of a free transfer in the family, the determination of the company value (including an internal balance sheet of private assets) is necessary, on the other hand, a value determination forms the basis for negotiations in the event of an intended sale of the company. The basis for evaluating tourism businesses is the so-called earnings value method. The Austrian Hotel and Tourism Bank (ÖHT) has developed a practicable quick evaluation test with the help of multipliers, which simply and quickly indicates a range of evaluation.

Unfortunately, many business transferors fail to think about their retirement provisions early on and rely on pensions from the company. However, such services only work if they are realistically feasible and can actually be generated. The mandatory share rights of other heirs are also regulated.

In domestic tourism, there are many handovers from the 3rd to the 4th generation, since these are faltering due to inflation and rising interest rates, a structured approach is becoming increasingly important. In the coming months, the new handover pyramid will be presented at numerous events and seminars. The importance of tourism business transfers was recently recognized by the members of the tourism committee of the parliament.