2021 might not look like a good year to start a hotel business, but it’s possible to start one and find success. Sure, the COVID-19 pandemic sent the hotel and restaurant industry to the cleaners, but as vaccines begin to hit the shelves, the industry is regaining its vibrance.
However, this isn’t to say you’re assured of success when you start a hotel. So many hotel businesses fail, but it’s not for a lack of demand. The owners don’t take time to build a business that can succeed from the start.
Don’t be like them.
In this article, we’re sharing the steps you need to follow in order to start a hotel that can be successful.
Understand the Hospitality Industry
You aren’t going to start a hotel business just for the sake of it. You need to have a superior understanding of the national and local hospitality industry. In 2021, of course, the focus is on the effects of the coronavirus pandemic. However, there are several other factors to assess.
For instance, how does the competition look like in the area you want to set up the hotel? If there are several hotels like the one you want to set up, competition is likely to be high. That’s not an ideal location.
It’s also important to know local regulations for hotel construction. These vary from state to state, but you should understand how they will affect your plans.
Draw a Business Plan
A hotel, even a small one, has many moving parts. This is one of the reasons you need to focus on crafting a detailed business plan.
The plan fleshes out basic details such as the name and address of the hotel, as well as crucial information, such as capital requirements, sales and marketing strategies, and the range of services offered.
If you’re not an experienced entrepreneur, it’s advisable to hire a hotel business consultant to help you draw the plan.
Secure Adequate Capital
Regardless of how you slice it, starting a hotel is capital intensive. A small motel is going to cost you about $1 million while a big, luxury hotel can cost more than $20 million. Much of this cost goes into the land, buildings, and equipment.
As such, an important step when you’re starting a hotel is to secure adequate capital, as forecast in your business plan. If you’re self-funding, great! But if you’re short on funds, you can look into business loans or even equity investments.
With the money, you can then focus on putting up the hotel in your chosen location. Remember there are a variety of permits you’ll need to obtain from local authorities.
Market Your Hotel
Once the hotel is fully built and ready to start operating, don’t expect guests to start driving in out of the blue. You’ve to invest in marketing.
You can start by marketing it locally, then expand your target market gradually. The modern consumer is searching for services online, so work on expanding the facility’s digital presence, especially on social media.
Start a Hotel That Will Succeed
The hospitality industry is fiercely competitive and the COVID-19 pandemic has made things worse, but it’s still a good time to start a hotel. With this guide, you now know the key steps you need to follow.
Keep reading our blog for more business and marketing tips.