• Lodges
• Resorts
• Camps
• Air services
• Outpost cabins
• Motels/hotels
• Campgrounds
• Private cottage

Featured Listings Modern Hotel on Trans Canada Highway Successful Highway Motel and Restaurant

Choosing the Tourism Industry

The Tourism Industry is the fastest growing industry in Canada. In northern Ontario, the Tourism Industry represents one of the leading economic foundations for most communities, and provides hundreds of thousand of jobs. To some, it is a way of life. A chance to work along side your family members, towards a common goal - your future. To others, it provides an excellent environment for business investment with countless rewards and higher returns on their investments. We invite you to consider all the benefits of buying and operating your own tourism business.

Exclusive Buyer Agency Representation

If you are looking for a tourism property in northern Ontario, an option is to retain my services be your exclusive representative to search for a business opportunity whether it is listed for sale or not. Acting on your behalf, I will provide you with information on what is available and details on properties that have recently sold so that you have a solid understanding of the market before you make such an important decision.

I will be able to talk to owners of properties that have the facilities that you are looking for but have not listed the property at this time. There are many properties out there that are not publicly for sale because owners are fearful that if customers found out, they may not return. Let me do the research for you to find the ideal business for you.

The buyer agency contract is in effect for one year and under the terms of the contract, the commission is payable by the buyer. As well commission can be payable by the seller and/or the buyer depending on the circumstance. Naturally any businesses that are listed for sale, there will be no commission payable by you. Should I be able to negotiate a commission from a seller not listed, quite often this is the case, the commission due from you will be reduced by that negotiated amount.

I would love to help find you the perfect tourism business for you!

Types of tourism businesses in northern Ontario

Tourism in northern Ontario is a large industry sector, and businesses vary in sale price up to several million dollars. Most of the properties that I work with, usually range up to two million dollars, and generally consist of:

• fishing and hunting lodges and camps for sale
• family resorts for sale
• air services for sale
• outpost cabin operations for sale
• trailer parks and campgrounds for sale
• marinas for sale
• hotels and motels for sale
• restaurants for sale
• trading posts (souvenirs, bait, fuel, sundry items) for sale
• attractions for sale
• private cottages for sale

Businesses for sale

When dealing with the sale and purchase of an operating business, Real Estate laws in Ontario require full disclosure of both financial information and the assets being included and excluded from the sale. This information will be provided to the purchaser at the appropriate time, and usually at the time of a physical visitation to the business site.

Sellers may consider the sale of the assets (sold by the proprietor owner, or the corporate owner), or the sale of the shares of the business (sold by the shareholder(s)). Again, we'll be pleased to explain your options on purchase for each business being considered.

Considerations:

Type of business

We recommend that as one of your first considerations, you contemplate the type of business you would feel most comfortable owning and operating. Options include:

1. What accommodation services are provided:
   • Housekeeping (cabins with self-catering kitchens)
   • American Plan (guests eat meals in lodge dining room)
   • Outposts (usually air access only; single cabins on remote lakes)
   • Motels (generally without dining facilities)
   • Hotels (generally with dining and liquor lounge)
   • Campgrounds (usually a transient clientele)
   • Trailer Parks (usually has seasonal campers/trailers)
2. What activities would your guests participate in:
   • Fishing
   • Moose hunting
   • Bear hunting
   • Deer hunting
   • Canoeing
   • Hiking and other eco-tourism outdoor activities
   • Snowmobiling
   • Cross-country skiing
   • ATVing
3. What type of access to the business property would suit you:
   • Drive-in easy access (close to a community)
   • Drive-in semi-remote
   • Boat-in
   • Fly-in

Geographical area

This web site references all business locations in relation to the provincial geographic areas; North-West Ontario, North-Central Ontario, North-East Ontario and Southern Ontario. Please refer to our map on the home page. Some of these areas have greater or more developed strengths than other areas. As an example, Southern Ontario is highly developed in eco-tourism activities, whereas the Northern areas of the province are best known for the excellent fishing opportunities. Consideration should also be given to which geographical market you feel comfortable in catering to. Clients heading to northern Ontario usually travel in a north-south corridor, either from the United States, or from southern Ontario. The prime destination markets for Ontario residents is within an 8 hour drive, whereas the US market will comfortably travel within 8 to 14 hours. Hunters and fishers will travel much further than eco-tourists. Family vacationers will usually drive the least.

Cash equity

The amount of cash you have available for investment is critical, especially in determining what properties to consider for purchase. On a purchase of a tourism business, the banks will generally finance up to 50% of the purchase price provided the business is financially viabile, and strongly recommend a Vendor held mortgage for 10% to 15%. That indicates 35% to 40% cash from the buyer. With that, you'll need to determine what businesses are within your financial reach. You'll also need cash to cover closing costs, as well as some cash for those rainy days. We'll be happy to provide guidance to you.

Going concern

Businesses promoted on my website are considered going concerns, that is, they are in a state of functional operations. The profitable and well run operations are considered as 'turn-key'. Others available and worth considering are those that haven't received recent and appropriate best management practices. These include businesses considered as 'fix ups' (needing physical improvements) and 'new management style needed' (those with poor revenues and profits). Occasionally businesses are sold under a 'power of sale' provision within a mortgage (in other words, the mortgage holder is selling the business - as is). Most business values are determined and based on the cash flow (profitability), and supported by the replacement value of lands and buildings.

Your living arrangements

Consideration needs to be given to the size of home you require, and the seasonality of the business residence. Many of the seasonal tourist lodge businesses have a seasonal residence at the business site, and the owners have a separate winter home. This is especially true for remote and semi-remote businesses.

Family considerations

Are there special family considerations, such as school busing for children, special needs children, proximity to community/health care, outside work availability in the off-season for you or your spouse, cultural/recreation activities for family?

Choosing your new business

An old saying in the real estate business states the three most important aspects of a purchase are 1) location, 2) location, and 3) location. Everything else can be changed. We believe that, especially for a tourism business, and have considered the different meaning of each location. After you have determined the type of business you wish to operate, and have determined who your client will be, then consider:

Location (proximity to your market)

Ensure you understand who your client/market is, and where they reside. Can the facility be reached by your anticipated clients within the accepted drive time and/or travel time? Is it an appropriate and easy access for your clients?

Location (proximity to needed resources)

Ensure the resources your clients are coming to experience are readily available. If it's fishing, ensure there is an adequate fishery in the lake and nearby. If a family resort, are attractions, shopping and beaches nearby?

Location (the physical site itself)

Does the physical site of the business lend consumer appeal, and is it an appropriate site. If you offer hunting, don't locate next to a large eco-tourism park.

Financial considerations

You'll need to complete a business plan to understand the cash flow from the business, whether there are sufficient funds to replace worn out equipment, or embark on a needed marketing program.

Bringing experience/knowledge to business

When considering the type of business, consider the knowledge and experience you will be bringing to the business. Love of fishing and hunting doesn't ensure your business success. It is the ability to apply knowledge, people skills and management technique that helps make the business a success. Know your strengths and weaknesses.

The offer:

Drawing it up

It is normally the responsibility of the real estate broker representing the buyer to draft the offer to purchase. In situations where the buyer is purchasing the shares of the business, the advice and assistance of your solicitor and accountant are required.

Your advisors

There are a number of issues relating to a business purchase that need complete reviews and advice provided. Generally a buyer seeks advice from a solicitor (legal and offer issues), an accountant (tax & corporate planning, business plans and budgeting), environmental consultant (fuel tank and septic issues), government officials (MNR for fisheries, wildlife/hunting, remote access, forestry issues, native land claims) (Min. of Tourism for marketing, trends and staffing/training). I can also provide contact for local, regional and provincial associations, information on lodge issues (hunting BMA, Allocation tags, LUPs, etc.) and much more.

Deposit

With any offer, a deposit is required as a sign of good faith and commitment. The maximum amount allowed by law is 10% of the purchase price, however amounts in the range of $5,000 to $50,000 are more common. The deposits are placed in the Trust Account of either the listing real estate broker, or the solicitor for the Seller, and form part of the payment on closing (the purchase).

Conditions

Most offers include sale conditions of the Buyer, and may include:

• financing condition (usually for 60 days)
• house sale (usually for 60-90 days)
• review/approval of financial information (usually for 30 days)
• property inspection (usually for 30 days)

Financing

I would be happy to assist with arranging meetings with appropriate financial lenders, and in the development of business plans for financing. Lending institutions will not commit time analyzing a financing application without a signed and accepted Agreement of Purchase and Sale. Most banks take about 4 to 6 weeks following receipt of all information in order to make a firm commitment.

Closing costs

Anticipate closing costs for the following areas:

• Solicitor (up to 1% of purchase price)
• Accountant (usually up to about $1500)
• Purchase of lodge inventory (merchantable stock)
• Land transfer tax on lands and buildings (about .5% -1%)
• Sales tax on chattels and equipment (at 8%)
• Moving costs

Closing date

When is the best time to 'close' the transaction.

• If marketing the business to clients is critical, you may wish to consider a closing in early January.
• If the business has a solid repeat clientele, or if cash flow is slower during winter months, consider a closing in April.
• If considerable maintenance, repairs and fixing-up is required, consider a closing in September or October.
• Consider snow conditions for moving in and out if the business has a year round home.

I am committed to assisting you in locating and purchasing the 'right' business for your needs. Please call me to begin the first step of this exciting journey.