How to Start a Hotel Business
Friday, July 6, 2018, 6:00 AM | Leave Comment
Running a hotel could be a very lucrative business idea. However, it’s rather difficult to start because it requires a lot of planning and even more initial resources.
Before venturing into the unknown with this idea, it’s best to investigate the market and find out if there are customers that are in need of your services.
A good thing about running a hotel is that you can scale up when needed. That way, you can start a small and modest business operation and simply expand on it as you see fit in terms of resources and demand.
-
Location, location, location
The most important factor in deciding whether a hotel business will be profitable is its location. The hotel can only be profitable if it’s located in an area that has a lot of tourist attractions and provides a constant stream of guests.
This is something you need to research before creating a business plan. It’s fine for the hotel itself to provide an incentive for more tourists to visit it, but nothing can be done if they don’t have a reason to visit your city or the area nearby. It’s also important to have in mind how many hotels there are in the area and what kinds of competitors you are dealing with.
-
Budgeting
The next big item to figure out before the actual planning takes place is how much it would cost to start a hotel. It’s not an easy calculation to make because there are a lot of expenses that you need to take care of beyond just establishing a hotel and paying wages to employees.
There are also numerous day to day expenses that come with running such a complex business. This needs to be factored in when you’re taking out a loan. It’s best to borrow more than you actually need, just to make sure you’re financially stable and can work comfortably.
-
Equipment and maintenance
Before a hotel can open its doors and start taking in guests, you need to make sure that it can accommodate all of their needs and preferences. This is sometimes rather simple and easy to organize, but if you want high-end customers, the hotel itself needs to look the part.
For instance, investing in free standing bath and luxurious shower can easily turn your bathroom from ordinary common rooms to places of indulgence for your customers.
-
Licenses
Hotel businesses are pretty intensely regulated because a lot of industries converge in the workings of a single hotel. The location of the hotel itself is regulated by local laws, customs and regulations because you need a license to open a hotel. The same goes for serving food, alcohol, and abiding by rules of safety.
Have in mind that obtaining these licenses will cost you both time and money. Small businesses that are struggling to get by can’t really afford either, so the costs of starting a business need to be factored in.
-
Employees
Employees are the most important part of any business, including hotels. A hotel can only operate and be profitable if you manage to find the best employees out there that can make that happen for you. It’s a difficult thing to do for a small company because you usually don’t have enough money to provide large paychecks and bonuses.
The location of the business very much determines what kind of employees you can rally on, but it’s not the most important factor to consider. The best way to find the employees that can improve your hotel is to create an environment in which employees can thrive and prosper.
-
A failure is an option
It’s important to have in mind from day one that a failure is an option for a hotel business. There are a lot of moving parts and hotels tend to rally on a variety of other companies working in the area. That means that a hotel can fail regardless of your efforts.
This is something to prepare for right away because that’s the only way to keep as much of your funds as you can when the business goes bust. It’s always a good idea to save on whatever you can and to have backup income sources.
Starting a hotel business takes time and effort. You need to fully understand the market you plan to work in before making an investment, and only then will you have chances of success.
Throw us a like at Facebook.com/doable.finance
