Starting a
hotel is capital intensive, tough and challenging. The business is location
sensitive, has lots of players and highly profitable.
The scope and
size of your hotel dictates the amount of startup funds you need. Other
considerations are the type of hotel, bread- breakfast, stopover hotel, self
service or a hotel boutique.
You need some
hotel management experience, adequate funding.
It takes several years to get established and turn a profit. Other
important points are if you want to build from scratch or acquiring an existing
one.
Leasing a
property and turning it into a hotel is bad the best approach is to buy an
existing hotel and revamping. However building from scratch requires huge
investment in finance, time and planning.
Type
of Hotel
What kind of
hotel are you trying to run? You need to decide on the mode of accommodation and
services for your guests.
There are
different kinds such as bread and breakfast, self service, and high-end boutique
hotels. More are stop-over, hotel for business travelers or a holiday inn.
There are
three major criteria which are establishing an upscale establishment,
affordable hotel or budget. Other considerations are type of amenities you want
to provide.
The hotel
could run a basic room accommodation have a fitness center, recreational area
or restaurant.
Location
Once you have
decided on the kind of hotel you want then the location is the next step. The
location usually determines the type of hotel and clientele.
Highbrow area
attracts high net worth individuals who expect certain standards. The amount
you charge, furnishing and amenities differ from each establishment. Beach side hotels and tourist destination have
their own type of clientele.
Permits
You need
permits and licensing to start a hotel business. Register your business name
and get liability insurance.
Hotel
business has many sectors such as supplying food and beverages including
alcohol. You need a license to sell alcohol and food handling permit.
If you have a
swimming pool you need a certified lifeguard and medical center. Other
licensing are fire safety and staff insurance.
Finance
You need a
professional to write your business plan. The plan should be very comprehensive
and cover all parameters.
You need lots
of money to start a hotel business. Lending from friends and family will not
provide the type of money you need.
You need venture
capitalists, sales of preference shares to investors. You need core investors
or major bank loans.
Things to add
in your business plan are long term goals, management structure and a market
analysis. Outline future goals, growth, financial sources and promotional
strategy.
Buy
or Build
Register your
business as a limited liability company including tax identification number.
Find out all the licensing you requires based on the amenities you provide.
Buy
or Build
There are
four ways to start a hotel business. You can lease a building and convert into
a hotel or buy an old hotel.
Another
strategy is to buy landed property and build from scratch. Some entrepreneurs
prefer buying a regular building and redesign into a hotel.
Building a downscale hotel with sparse amenities is a bad strategy. You compete with
established hotel in your host community that provides better service and
prices.
The best
option is buying an old establishment and upgrading. Once you decide on a
location, buy or build a hotel, refurbish and apply for licensing.
You need to
distinguish your establishment by creating a new branded name. The name of your
establishment is very important to the corporate identity of your hotel.
Other major
considerations are utility bills and structural fixtures. Create a beautiful aesthetically pleasing hotel by using a certified interior decorator.
Full
Service
Offering full
service come with its own challenges. Additional amenities and services like
restaurant, beauty spa, bookshop add to the expense.
To run a bar,
night club or pub selling alcohol require sales permit. Others are security,
furniture and staff.
The same
applies to restaurants and fast food lounge. You need food handling
certification and occasional checks and certification.
Other
amenities that attract additional funds are building a banquet hall, sports,
swimming pool or recreational areas.
Amenities
found in a Hotels
Banquet hall
rooms
Restaurant
Night club
Bar
Sports
complex
Book store
Boutique and
spa
Car rental
service
Marketing
and Promotion
Promote your
hotel through a website or yellow pages. Use travel websites, agencies and
tourist locations.
You can advertise on television or use print
media. Advertise in national newspapers and create nice billboards.
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