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How we bought a hotel in Spain

Interview with...

Joy and Spencer and Rennie
Age:
Joy 44, Spencer undisclosed
CV:
Joy: teacher. Spencer:  computing
Business name:
The Finca
Goods/services:
Hotel
Location:
Mallorca
When bought:
Four years ago
Price paid:
£190,000
Buying a hotel in Spain

Click here to browse hotels-for-sale listings

Joy and Spencer Rennie decided to move abroad when their search for a business in the UK proved fruitless.

"We tried to buy a couple of B&Bs back home but we encountered lots of problems," recalls 50-year-old Spencer. "With one of the purchases they accepted our offer, but then someone else came along with cash and they didn't give us a chance to come back to them.

"When that fell through the vendors came back and offered it to us again. The same thing happened and it fell through a second time. That was when we decided to look abroad."

Redundancy

Spencer, who waHow we bos a computer services manager, and his wife, a 44-year-old teacher, had been contemplating a change of lifestyle for a while, and had already thought of buying a B&B. Then Spencer was made redundant, and that pushed the couple on to make their dream a reality.

They found the internet ideal not just for finding businesses, but also to appraise them before viewing. "I think you can get a good idea of how B&Bs look from pictures on the web," says Spencer. "You can also look for feedback from guests on other websites."

The majority of the guests have been fantastic and we have made many new friends of different nationalities.

Type quoted person's name here

Though prospective buyers should remember that finding the right business doesn't always happen quickly, the Rennies struck gold immediately in their search abroad.

"The business we ended up buying was the only one we went to view. What clinched it was that this business was unique; others were a bit out of our reach and much more expensive.

"We compared it to other places we'd been looking at on the internet to make sure we weren't paying too much." They eventually paid £190,000 for the leasehold.

The couple are now the proud proprietors of a 10-room country hotel, which they found through an English business broker who was selling businesses in Mallorca. They have an 'Agrotourismo licence', which means they have to cultivate some of the agricultural land in the 33,000m2 estate.

And because the hotel is a 17th century farmhouse, there are building constraints. "There are rules about what additional building you can do. The ratio of buildings to land must be maintained.

"The way things are for us, we can't build any more - but we're happy with the way things are."

Perfect retreat

The Finca (Spanish country house) is located in beautiful countryside in the south-east of Mallorca, surrounded by vineyards, fruit orchards and mountains with glorious views. It's the perfect retreat.

"It's very quiet and peaceful here," says Spencer. "We are 1km from the road and 35 minutes from the airport.

"There's currently a lot of motorway building going on, which makes it very quick to get around the island."

Spencer admits that they hadn't done much research before taking the plunge and moving to Spain. "To be honest, we knew a lot more about the UK market - the way the businesses work, quiet and busy times, and so on.

"The season is longer in Spain and it's been very different and a lot harder for us than we thought it would be."

 

They think they've found a simple way to cut costs next year. "The winter was very quiet and we were losing money, perhaps because we stayed open," reflects Spencer.

"The heating bills for this place are phenomenal; it's oil fired and it costs a fortune. Next year we're going to close for a couple of months."

Unsurprisingly, when asked what they would do differently if they went through the experience again, Spencer talks about the importance of investigating the marked peaks and troughs inherent in the tourist trade. "I would do a lot more research into what it's like outside the season," he admits.

"Although Mallorca is an all-year-round place, the majority of hotels and amenities close for the winter. There are still people coming out here, but you don't get the same kind of numbers."

Joy and Spencer got off to a shaky start with the staff. "The guys who were here said they would stay, and then when we took over they didn't, which left us in the lurch a bit.

"The hotel was full at the time and we were definitely thrown in at the deep end. We've had no major disasters and no complaints from the clients, although it was very stressful at first."

Guests can be "a little awkward," admits Spencer. "Sometimes they make a mess or break something and you can't understand why.

"We've had occasions where people have tried to take advantage - for example, coming back for breakfast twice. They think we don't notice!"

But, he adds: "The majority of the guests have been fantastic and we have made many new friends of different nationalities.

Spanish way

"Generally speaking, everything is OK. We get occasional problems with the telephone or electricity but that's something I think we are just going to have to get used to.

"It's the Spanish way: no one really cares about the fact that things break down."

As well as taking bookings directly, the couple work with tour operators from all over Europe. The conduct of one operator in particular taught them a painful lesson.

"They were very slow in paying us. Basically, there was a six-month delay from when the guests stayed to when we got our money - and that was definitely a worry because it affected cash flow.

"It was a big enough sum to become a problem. To overcome this we have renegotiated our contract and I'll make sure we get a deposit from them in future."

Spencer recalls telling friends and family about their move. "They were surprised when we told them initially, and said we were very brave.

"They've been over to visit a few times. My son was here for Christmas and New Year and my wife's son came over to live with us after finishing his GCSEs last summer."

The language barrier hasn't caused them any problems. They are learning Spanish, but visitors often want to practice their English, and most of the guests are English or Germany anyway.

"We don't get to practice very much," says Spencer. "We're out in the countryside here so we don't really speak to that many people, unless we go into the local village.

"Another thing in Mallorca is that they speak a different version of Spanish - a bit like Catalan - so some of the words that you know in Spanish mean nothing here." Whatever the linguistic barriers, "the Spanish people are fantastic - everyone has been friendly and welcoming."

As in so many places in the world, the cost of living in Spain is appreciably lower than in the UK. "Almost everything costs less. Petrol is cheaper; at about one euro a litre, it's almost a third less than at home."

Marketing and promotion are crucial for any business, especially one in a field where competition is fierce. "We've got a great website," says Spencer.

"My son is a web designer and he designed it all for us. We also advertise with various tour operators and hope that word of mouth will bring us more custom."

Joy and Spencer have more plans in store for growing their business. "We are going to start offering activities, working with a specialist travel company.

"This place can be an ideal base for people who want to do walking, trekking and hill climbing, and we also want to offer courses which can be completed here in the hotel and gardens - like jewellery making and painting. We want to widen our appeal to lots of different people, not just families."

Finally, Spencer has some words of wisdom for anyone out there thinking of buying a business, be it at home or abroad. "Don't rush into it and make sure you check it out properly," he advises.

"Even if you are put under pressure, even if you're sure it's a good deal - hold back a bit. Be cautious. Talk to more people in similar businesses. Remember: there will be plenty of other opportunities."

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