Have you ever thought about starting a hotel business?
The hospitality industry continues to grow worldwide, and, as such, if you’re thinking of starting a business, you can hardly do better than a hotel company.
But starting a hotel business is also a great challenge. You want to make sure you plan to run a successful hotel company. This industry has fierce competition, and your hotel can easily go under within the first year.
So what do you do? How do you run a successful hotel?
Here’s how to start a hotel business:
The Basics of the Best Hotels
What do the best hotels have in common? How do you make sure that your hotel stands out from the competition?
Here’s what makes a great hotel:
People stay in hotels with specific needs. Some might need to stay in hotels long-term and might wish for a kitchenette. Others are digital nomads and demand fast Wi-Fi. Focus on having as many amenities as possible.
Where’s the Hotel?
The location of your hotel also matters. You want to consider what type of guests you wish to attract.
If you want to attract frequent travelers and business travelers, consider having your hotel near an airport. If you want to attract tourists, you want a hotel near the city center.
You also need to consider the protection you’ll offer your guests. For example, do you want to install CCTV cameras in the hotel? Do you want to install smoke alarms in each room? Consider what safety precautions you’ll want in your hotel.
Finally, you need to make sure your staff knows how to attend to your guests. They need to be personable and friendly with your guests. They’ll also need to know how to politely handle conflict when needed.
Financing Your Hotel
Once you’ve planned your hotel, you’ve got to find a way to finance it. You can consider hotel loans from the Small Business Administration.
You want to consider how fast you’ll be able to recover your costs when deciding on your hotel space. You might want to consider buying a small hotel first to test out to the waters.
For newcomers to the hotel industry, you should wait until you invest in a larger five-star hotel. You’ve also got to plan for financial strains in your hotel.
For example, consider the following scenarios:
- What happens if a guest cancels their reservation?
- What happens if a guest complains and demands a refund?
- You might face a hike in prices from your vendors
- There might be maintenance costs and bills that rise over time
- How much will you have to pay your staff?
You want to make sure you find a great financial planner who can help you prepare for such scenarios. Running a hotel can be costly, and you want to make sure you can keep your hotel operating as long as possible!
Types of Hotels
Let’s return to the types of hotels that you should consider. As mentioned in the first point, your amenities help you determine which hotel works for your needs.
If you buy a space in a historic area of your city, you might want to open a boutique hotel. This gives you the most freedom to design your hotel and what experiences to offer your guests.
If you want to focus on acquiring a large number of guests and frequent travelers, you might want to consider motels or budget hotels. These are what Holiday Inn does best.
You can also consider opening a hostel for budget travelers. These are great for attracting backpackers and students. These hostels work best if you’re operating in a popular city.
You can also offer a family hotel which offers amenities that work for children. These can include swimming pools or beach access.
In contrast, you can also offer adults-only hotels that offer open bars, a nightclub, and adult entertainment.
A new type of hotel that we might see in the future is one for remote workers and digital nomads. Many remote workers might wish to hunker down in a new city for 1-3 months.
They’ll want to find affordable accommodation from where they can work online. You might want to consider jumping into this niche before it becomes oversaturated.
Steps Before Opening
Once you’ve bought your hotel and secured licensing, you’ve got to take two final steps before opening day.
You want to hire your staff and train them for when your hotel opens. It’s always best to hire staff who have extensive experience in the hotel industry.
If you need to hire newcomers, you should give them a probation period to assess how they work in this demanding industry. This also puts pressure on them to work their best.
You want to put your staff through role-playing scenarios to assess how they’ll greet your guests. You should test how they’ll handle conflict with guests and what executive decisions they’ll make.
The next step is to start marketing your hotel to potential guests. Add your hotel to online booking platforms. Offer discounts to first-time guests. You can also ask your friends to spend a weekend in your hotel and garner feedback from them.
Make sure you also get your guests to publish online reviews of their stay. This is the best way to market your hotel and attract more guests in the future.
You want to spend at least 6-12 months training your staff and marketing the hotel before opening day.
That’s How to Start a Hotel Business
Now that you know how to start a hotel business, you can start the process of opening your hotel.
Start by creating a blueprint of the different types of hotels that you’d wish to operate. Choose the right location and consider the amenities that you’d like to offer your guests.
Make sure you seek financing options to open your hotel. You want to plan on how to manage the financial strains that you might face.
Please share this guide with anyone else interested in starting a hotel business. You can find more great business advice on our website.