The advantages to owning and running a hotel business are seemingly endless – be it the creative opportunities, the profitability, or the reward of establishing a thriving hospitality enterprise. However, there is a lot of competition in the hotel industry that can stifle these benefits. To make sure you get the most out of your hotel business, we recommend laying the proper groundwork for success. In this short article, we’ll cover some essentials you should know about how to start a hotel business.

What is a hotel business? 

A hotel business is a company that provides temporary accommodation. These lodgings can take many forms, including small beach-side bungalows and skyscraping urban towers. The tenants have just as much variety, ranging from to backpackers, to vacationers, to business professionals. Being able to cater to travellers is at the core of a hotel business.

Steps to start hotel businesses in 2023 

To Start hotel businesses means acquiring real estate to house travellers and providing housing essentials to make those travellers feel welcome (and pay for their visits). Hotel entrepreneurs may take over existing hotels and transform them into their own businesses, or they may build hotel real estate from the ground up. Either way, this step by step guide will tell you how to own a hotel and succeed in the hospitality industry.

Step 1: Find a market need

To identify a market need, start by asking yourself the following questions: Who are my ideal hotel guests? Where are they travelling to? Where will they likely travel in the future?

These questions will help elucidate why travellers might come to your location and consider booking a night at your hotel. To answer these questions, put yourself in the shoes of your target clientele. What kind of accommodation would appeal to you if you were a travelling businessperson? Would those needs change if you were a backpacker on a budget?

If you’re having a hard time finding hotels that can fulfil these hypothetical needs, chances are your target clientele is too. This means there is a potential market need your business can fill. Consider these market needs and ensure your hotel business can satisfy them to bring in a stream of customers.

Step 2: Research, research, research

Details about a specific location will have a tremendous impact on your hotel’s likelihood of succeeding as a profitable business. Some of the crucial factors are…

• Accessibility
• Climate
• Local taxes
• Political stability
• Available workforce
• Competition potential (the likelihood of other competing hotels to pop up nearby)

Before building up your hotel enterprise, research the above factors to measure suitability. You might also conduct a hotel and resort feasibility study to see what other pivotal factors you might need to consider.

Step 3: Prepare a business plan

A comprehensive business plan must cover your potential services, financial projections, leadership team, staffing requirements, and day to day operations.

Beyond the crux of your business idea, you will need to give careful consideration to:

• Occupancy rate
• Guest experience
• Operational efficiency
• Cash flow
• Revenue management
• How you’ll secure funds
• Existing competition in the local market

Your comprehensive business plan should indicate if you have the available funds, potential income, and workforce necessary for success.

Step 4: Run the numbers

An effective financial plan is one which:

• Is thorough
• Is flexible
• Prepares for a slow start
• Offers backup plans and branching options in the face of undesirable outcomes (also known as a Plan B)

While keeping a positive outlook is conducive to building a well-functioning business, running the numbers is an essential task for running a successful hotel and can prevent over-optimistic attitudes from covering up financial issues.

Step 5: Build your brand

Whether you intend to run a boutique hotel or a roadside inn, your brand should be immediately recognizable to your target clients. Consider designing…

• A memorable name and logo
• A characteristic colour scheme
• A team of respected affiliates to promote your hotel

When crafting your brand, remember to reiterate your name often and to associate with positive messages to create a good impression in the eyes of potential customers.

Step 6: Hire an amazing team

You won’t be able to do everything yourself – nor would you want to. Instead, surround yourself with competent, creative, and enthusiastic people. Search for people with…

• Extensive backgrounds in the hospitality industry
• Interest in building something new
• Positive attitudes!

The team you choose to work with will impact the viability of your hospitality business.

Step 7: Prepare a strategic marketing plan

Digital marketing and social media marketing for hotels is a must. Be sure to…

• Make your marketing plan flexible
• Include A/B testing
• Prepared to change course based on actionable feedback
• Remember your marketing efforts may take months to bear fruit
• Don’t be shy about soliciting help from marketing professionals

Developing a marketing plan is as effortful as making your business plan, but you don’t have to be alone. There are marketing professionals out there who can help you make the hotel business of your dreams.

Final Takeaway

As long as people travel, there will be a need for hotels. And you could be the entrepreneur to satisfy that need. To make waves in the hospitality industry, follow these essential steps and don’t forget to tap on any marketing professionals who might be able to assist you.