Ever since the first ever hotel was established in 1768, this business type has been one of the most lucrative. Nowadays, people have a different image of how a hotel should look and operate, and expect different things.
As things stand, the hospitality industry is booming despite the setbacks from Covid-19. But even with that fact in mind, it’s quite expensive to start a hotel business of your own. Hotels are usually located in areas where there’s a lot of tourism, which means you will also have to find the right location for your business.
Since it can be overwhelming to learn everything about starting a hotel business, we compiled a list of comprehensive tips to help you reach your hospitality goals.
Research and create a business plan
Determining whether the area you have in mind is viable is one of the first steps to opening a successful business. You need to research the area and find out whether there’s a competitor and whether there is an actual need for hospitality services. Even if there’s a need for that sort of service, find out whether the area needs a hotel or a motel-type business.
After that, you will have to think of how your business will reach its goals. To quickly put your ideas into something more concrete, you can always use a hotel business plan that will ensure you are making factual and informed decisions. With a business plan, you can also be sure that you will tackle the marketing aspect of your business.
Furthermore, with a solid business plan, you can estimate the profits you are set to net in the following years of operation, which makes it easier for investors to see that your business is financially feasible. They might even consider investing or franchising at some point. You can also think about employing other techniques to calculate your potential profits with the method of revenue per area.
Get the right paperwork
To establish a new business, there are numerous legal, regulatory, and insurance requirements.
To determine your specific requirements, consult your legal, accounting, insurance, and operations teams as you will need to create a business structure and obtain business insurance before you open your hotel. Also, you will need to get building permits and hotel licenses, as well as licensing for food and alcoholic drinks. As you work on your building or renovating project, there will be many safety and health requirements as well, so you might need a building permit.
Although this can be overwhelming and daunting, it will ensure that your business is compliant with every rule and regulation. That being said, work tightly with your legal team to keep track of the entire process so that you don’t make costly mistakes later.
Hire and train your hotel staff
The success of a business depends on the quality of its team members. With the right staff, you’ll be able to provide value to your customers and position yourself as a market leader by hiring top-quality employees.
Hotels often hire first for departmental and executive positions which sets the tone and gives direction to all future employees. When hiring, it’s important to look for people that are hard-working and share your vision. If your employees don’t share your vision, you might not have a good working environment and fail to reach your goals.
To ensure that your candidates are the right fit, make sure your interview them and review their applications thoroughly. It might also be a good idea to run a background check on the employees you consider hiring, as knowing with whom you are going to share your business is crucial.
After you have hired a great team of people, it is important to train them. This is an essential step that will benefit everyone over the long term. All employees who interact with guests need to be trained in guest service so they are ready to help, no matter what their job responsibilities are.
Opening a hotel might not be an easy task. But with the right guidance and thorough knowledge of how you should approach the hospitality business, you will be on the right path to success. Besides that, a good marketing strategy that will help you spread the word about your business can also benefit you tremendously. Consider implementing the three steps outlined in this post to help you better navigate your business plan.