How to buy a hotel or motel in Colorado: valuation, financing, due diligence and what to know in mountain and resort towns.
Buying a hotel or motel means buying both a building and a running lodging business, with its staff, bookings and reputation. It is a large investment with real risk and heavy demands on your time.
The steps are: set your goals and business model, line up financing, learn the metrics, study the local market, check the books and the building, project the numbers, then offer and close. In Colorado, judge every deal against snow, tourism and local lodging taxes.
This post walks through each step and ends with what is different about hotels in ski towns. To see what is for sale now, browse Colorado hotel and motel listings.
What You Are Actually Buying
A hotel sale usually transfers four things at once, and each needs its own review.
| Component | What it includes | Who checks it |
|---|---|---|
| Real estate | Land, building, parking, signs | Inspector, appraiser, title company |
| Business | Bookings, staff, online listings, guest reviews | You and your CPA |
| Furniture, fixtures and equipment (FF&E) | Beds, linens, laundry, kitchen, software | Inspector and the purchase agreement |
| Licenses and contracts | Franchise, liquor license, vendor and booking contracts | Your attorney |
A motel is usually a smaller, limited-service property with outside room doors and parking at the room. A hotel usually has interior corridors and may add a restaurant, bar or meeting space. The more services a property offers, the more of the price rests on the business rather than the building.
Step 1: Choose the Type of Lodging and Business Model
Start by deciding what kind of lodging you are buying and who will run it.
Lodging ranges from small motels, inns and bed-and-breakfasts to full-service resorts and vacation rentals. You can run the property as an independent, join a brand such as Marriott or Hilton as a franchise, or hire a management company. A passive option in Colorado is a property with an existing five-year triple-net lease to an established operator.
| Model | Your role | Trade-off |
|---|---|---|
| Owner-operator, independent | You run the front desk, staff and marketing | Most control and most work |
| Franchise | You run it under a brand’s standards | Booking system and name, but fees and required upgrades |
| Third-party management | A hotel manager runs it for a fee | Less time, less margin |
| Net-leased to an operator | Tenant runs it and pays most costs | Passive income, tied to one tenant |
If you buy a franchised hotel or sign a new franchise, the brand must give you its Franchise Disclosure Document at least 14 calendar days before you sign a binding agreement or pay. That is a federal rule (16 CFR 436.2). Read it with your attorney, and look for the brand’s property improvement plan (PIP), the list of upgrades a new owner must make.
Step 2: Line Up Financing
Plan your financing for both the purchase price and the cash to run the business until it is profitable.
Sources include your own capital, bank loans, outside investors and partners. SBA loans can fit an owner-operator: 504 loans finance major fixed assets, with the SBA-backed portion capped at $5 million for most borrowers, and 7(a) loans go up to $5 million. Hospitality property also needs capital reserves for maintenance. See SBA 504 loans in Colorado.
The SBA 504 program offers long-term, fixed-rate loans with 10-, 20- and 25-year maturities, pegged to 10-year Treasury rates. A 7(a) loan can also fund working capital, which matters for a hotel that needs cash for payroll before the busy season. Lenders weigh both the building and the business, so expect them to ask for several years of hotel operating statements. For the wider loan menu, see the main types of commercial real estate loans.
Step 3: Know the Metrics: Occupancy, ADR and RevPAR
Three numbers describe a hotel’s performance:
- Occupancy: the share of available rooms that are sold.
- Average daily rate (ADR): the average room income per occupied room.
- RevPAR (revenue per available room): room revenue divided by the number of rooms and the days in the period.
Together they show how a hotel performs, and ADR alone is not enough. Compare each one with the same period last year and with a competitive set of nearby hotels. ADR moves with the seasons, local events and the economy.
Worked Example: A 40-Room Motel
The figures below are an illustration of the math, not Colorado market data.
- A 40-room motel has 40 x 30 = 1,200 room-nights available in a 30-day month.
- It sells 780 room-nights, so occupancy is 780 / 1,200 = 65%.
- Room revenue is $109,200, so ADR is $109,200 / 780 = $140.
- RevPAR is $109,200 / 1,200 = $91, which also equals 65% x $140.
Now compare two ways to grow. Raising ADR to $150 at the same occupancy lifts RevPAR to $97.50. Raising occupancy to 72% at $140 lifts RevPAR to about $100.80. RevPAR shows which change earns more per room, but the occupancy gain also adds cleaning and labor costs.
Step 4: Study the Local Colorado Market
The local market decides what guests will pay, so study demand, new supply and seasonality before you look at a property.
| Town | Lodging tax trend | Period |
|---|---|---|
| Aspen | -3.9% | YTD June 2026 |
| Steamboat Springs | -8% | June 2026 YTD |
| Breckenridge (short-term lodging) | -5.4% | Q3 2025 |
| Montrose | +18.5% | Q2 2026 |
| Mesa County (hotel and restaurant) | +6.0% | June 30, 2026 YTD |
| Basalt | Higher, because the rate rose to 6% | 2026 YTD |
Lodging tax collections fell in the resort towns listed and rose in Montrose and Mesa County.
Lodging tax collections are a useful proxy for room revenue, because the tax is charged on each stay. Montrose’s lodging taxes rose to $370,833 in Q2 2026 from $312,939 a year earlier, even as commercial sales slowed after the Gold Mountain Fire. Mesa County’s hotel and restaurant taxes reached $3,486,394 by June 30, 2026, up from $3,289,375.
Watch for rate changes that distort the trend. Basalt’s 2026 increase reflects the new 6% rate, not more visitors. In Durango, tourism makes up about 25% of jobs, roughly 6,000 positions, according to RMCRE’s 2026 Durango outlook.
| Market type | Colorado examples | Demand drivers | What to watch |
|---|---|---|---|
| Ski resort | Aspen, Steamboat Springs, Telluride, Breckenridge | Winter skiing, summer festivals | Snow, resort closures, short-term rental competition |
| Western Slope regional hub | Grand Junction, Montrose | Highway travel, business, medical, outdoor recreation | New supply, wildfire disruption |
| Gateway and highway towns | Salida, Pagosa Springs, Durango | Summer travel, hot springs, rail and river trips | Road work, short shoulder seasons |
Step 5: Watch New Supply and Local Taxes
New hotels and new lodging taxes change a property’s future income.
- Frisco: The $90.5 million Foote’s Rest project includes an 80-room Marriott Tribute hotel.
- Roaring Fork Valley: Harvest Roaring Fork proposes a 120-room hotel, and an office building in the valley is being converted into a high-end hotel.
- Telluride: The Four Seasons Hotel & Residences is drawing strong buyer interest.
- Pagosa Springs: A November 3 vote decides a 6% lodging tax outside town limits from 2027, so price it into hospitality deals now.
How Lodging Tax Works in Colorado
Colorado charges its 2.90% state sales tax on hotel, motel, inn, guest ranch and similar rooms. Cities, counties and special districts add their own sales taxes, and counties and local marketing districts may add lodging taxes. A stay of at least 30 consecutive days by a permanent resident under a written agreement is exempt from the state tax.
The guest pays these taxes, but they still affect your price. In Aspen, the city puts the total tax on a night in a traditional lodge at 12.35% in 2026. Short-term rentals there pay 17.35% or 22.35%, which can help hotels compete. Short-term rental caps and taxes by town are covered in our ski-town buying guide.
Step 6: Check the Books, the Building and the Contracts
Before you commit, review several years of results and every contract.
- Profit and loss statements for the past several years, plus accounts, cash flow, assets, debts and contracts
- Any franchise agreement or other long-term contract
- Zoning requirements
- A full building inspection, since mountain weather wears buildings faster
- A Phase I environmental assessment
- The property’s reputation with guests
Also ask why the owner is selling.
Match the books to outside records. Compare reported room revenue with the lodging and sales tax returns the hotel filed, and with booking-platform statements. A gap between them is a question for the seller. The full list of checks is in a full buyer’s due diligence list.
Liquor Licenses Do Not Transfer Automatically
If the hotel has a bar or restaurant, its Colorado liquor license must go through a transfer of ownership with the local licensing authority. Under C.R.S. 44-3-303, the buyer may ask for a temporary permit to keep serving while the transfer is reviewed. The permit application must be filed within 30 days of the transfer application, with a fee of no more than $100. A temporary permit lasts until the transfer is decided or 120 days, whichever comes first. Start this early, and make closing conditional on it.
Step 7: Project the Numbers, Then Offer and Close
Build a forecast first, then negotiate from it.
Project renovation costs, room revenue, food and beverage, loan payments, insurance, property taxes, utilities and labor. Budget for staff carefully, since labor shortages have hit hotels in recent years. For scale, an HVS study put development costs at about $150,000 per room for limited-service hotels and $805,000 per room for luxury hotels. Then submit a letter of intent, and have an attorney draft the purchase agreement. To check the price, work out what a lodging property is worth.
Lenders and appraisers usually value a hotel on its income. Net operating income (NOI) is revenue minus operating expenses, before debt payments. Divide NOI by a market cap rate to get a value, then compare that with recent sales and with the cost to build new. Learn how NOI is calculated before you rely on a seller’s figure.
A typical purchase runs in this order:
- Letter of intent: price, deposit, due diligence period and closing date.
- Purchase agreement: drafted by your attorney, with the FF&E list and any franchise and liquor contingencies.
- Due diligence: books, inspection, environmental, title and survey, within a period set in the agreement.
- Financing and approvals: loan commitment, franchise approval of the new owner and liquor license transfer.
- Closing: staff, bookings, deposits and guest data hand over on the closing date.
Mistakes to Avoid When Buying a Hotel
Most failed hotel purchases trace back to optimistic income or a missed obligation.
- Using a peak-season month to value the year. Ask for at least three years of monthly figures.
- Skipping the franchise PIP. Required upgrades can cost more than the down payment.
- Forgetting working capital. Payroll and supplies come due before the busy season pays.
- Missing advance deposits. Guest deposits for future stays belong to those guests, so credit them at closing.
- Underpricing labor in mountain towns. Housing costs make staff hard to hire and keep.
Hotels in Colorado Ski Towns
Ski-town hotels in Colorado earn well in season but carry weather and tourism risk.
Hotels, bed-and-breakfasts and short-term rentals can generate substantial returns, but they need active management. As tourism moderates, hospitality values may soften, which creates openings for experienced operators. Telluride bookings fell during a 2026 ski-area shutdown, then recovered. More on resort towns in buying commercial property in a Colorado ski town.
The Telluride case shows how fast it moves. Air bookings fell as much as 40% during the December 27 to January 10 closure, then returned to year-over-year levels within weeks. A ski-town hotel buyer should hold enough cash to cover a slow month like that one.
Frequently Asked Questions
How much do I need to buy a hotel in Colorado?
It depends on the property and the loan. The SBA-backed part of a 504 loan is capped at $5 million for most borrowers, and 7(a) loans go up to $5 million, but you will still need a down payment, closing costs and working capital. A lender will set the exact equity requirement.
Can I use an SBA loan to buy a motel?
Often, yes, if you will operate the motel as your business. SBA 7(a) loans can cover the purchase and working capital, and 504 loans fund major fixed assets such as the building. A lender confirms eligibility.
What is a good RevPAR for a Colorado hotel?
There is no single good figure, because RevPAR depends on the town, the season and the hotel’s class. Compare a hotel’s RevPAR with the same months last year and with nearby competitors. A resort-town hotel and a highway motel are not comparable.
Does a Colorado liquor license transfer with the hotel?
Not automatically. The buyer must apply for a transfer of ownership with the local licensing authority. A temporary permit can let the bar keep operating for up to 120 days while the transfer is reviewed.
What taxes do Colorado hotel guests pay?
Guests pay the 2.90% state sales tax on rooms, plus local sales tax and any county, marketing district or city lodging tax. Totals differ by town; Aspen’s total for a traditional lodge is 12.35% in 2026.
Finding Lodging Property Through RMCRE
RMCRE brokers handle investment property across Colorado, including income-producing and mixed-use buildings. Members share opportunities across the network before they are openly marketed. You can also search Colorado commercial listings for every property type.
Rocky Mountain Commercial Real Estate has been a network of partner brokers across Colorado mountain towns since 2010. For buy-side help on a lodging deal, see RMCRE investment services, or read the Montrose Q2 2026 market update.
