Deliberating on how to Open and Set-Up your very own hotel? Then look no further as this article would guide you through the 8 important steps in setting up a hotel. Today, the hospitality industry has skyrocketed to be part of one of the largest in the world, with the industry steadily growing each year. Although the hospitality industry is saturated, there is still a need for hotels, guesthouses, and B&Bs, all over the world.
Setting up a hotel goes beyond providing a building with rooms and charging people to check in. A hotel is an establishment that provides lodging and, oftentimes, meals and other services for travelers and other paying guests, it should be a sanctuary for tired travelers, a place where guests feel comfortable and can relax when they’re in their room.
What Makes a Successful Hotel?
- Exceptional Guest Service: The most successful hotels are focused on the guests as the reputation of your hotel relies on the satisfaction of your guests. Hotels that realize how essential guests' experience aims to ensure the experience is a positive one.
- Location: Tourists and travelers are always on the lookout for hotels that provide a certain level of convenience to them, hotels that are situated close to top attractions, hot spots, or travel hubs like airports, inter-state bus parks, etc.
- Cleanliness: This is a crucial component of every successful hotel. The untidy environment, rooms, and the hotel, in general, are repellent to guests. With no guests, you can’t possibly hope to turn over a profit.
- Amenities: Hotel amenities play a huge role in the success of the business. The hotel amenities range from a pool, complimentary breakfast, smoking area, business amenities, and more. Having great hotel amenities play a great part in increasing the number of recurring guests and giving a positive customer experience, it can also be a source of revenue.
- Safety: Similar to location, the area the hotel is situated in plays a role in the safety of your customers. If guests are worried about what else might be going on in the area, it will make it harder for them to relax. Nothing ruins a vacation more than trying to fall asleep to the sound of oncoming police sirens.
How to Set Up your Hotel in 7-Steps
- Step 1 - Draft a Strategic Plan: Every successful business starts with a properly laid out plan, you would need to carry out research to have an idea of what market you are entering before committing to any project. If you have little experience in the hospitality industry, you could start by taking professional courses on hospitality, carrying out adequate research, and employing the services of a professional hospitality consultant. Learn the ins and outs of what makes a hotel successful, and figure out what the best hotels do well and what the bad hotels did poorly. Conduct research on your target markets and identify what your audience looks like. Take time to visualize what your hotel looks like, use all your senses to imagine how your hotel looks, feels, and smells. Figure out the type of people your hotel would cater to and consider what you can do to attract them to your business.
- Step 2 - Create a Unique Concept for your Hotel: There are various types of hotels such as motels, resorts, boutique hotels, conference hotels, inns, etc. Depending on the type of hotel you choose to establish the business decisions you take would vary from other kinds of hotels. The concept of your hotel goes a long way in determining your target market which in turn determines your unique value proposition. Your unique value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. Picking a concept for your hotel will impact the rest of your business decisions. It isn’t very easy to transition from one concept to another, so do plenty of research before you commit to a decision. Always remember that the guests booking into your hotel is looking to enhance feelings of pleasure and alleviate their stress, so what would your hotel offer that the other competitors in the hotel industry don't offer and why should guests book with your hotel?
- Step 3 - Run the Numbers: With your hotel concept and plan in place, it's time for you to run an analysis and find out if you would be profitable. Using tools like forecasting and market research set up various scenarios to see how some decisions affect the profitability of your business. You can also estimate key factors like room pricing, vacancy rates, revenue per available room, and operating costs. This may be a little daunting to do by yourself if you have no experience, so it is more advisable to employ the services of a professional.
- Step 4 - Secure Funding: Before securing funds you first need to determine if you want to purchase an existing hotel or build a new one. Buying gives you the opportunity to customize the hotel to suit your preference but it costs a considerably large amount to build compared to purchasing a hotel. So once you decide to build or buy a hotel focus on securing the funds to fund your project. There are many options in doing so that can help you get cash flow to help you build your dream. You can apply for a business loan, look into venture capitalists, angel investors, crowdsourcing, and invest your personal money. If you’re determined and have a great plan, there will be a way to obtain funding.
- Step 5 - Obtaining Hotel Permits, Licenses, and Other Legal Paperwork: There are different permits and licenses required depending on the local government of where your hotel is, so be sure to research your local regulations. Consult with your legal, insurance, accounting, and operations teams to determine the requirements for your location. All of this paperwork is not the motivating factor for getting into the hospitality industry, but it is important. Work with your team to check requirements at the local, state, and federal levels.
- Step 6 - Create a Marketing Plan for your Hotel: Formulate a strategic marketing plan that would help bring your clients to your hotel and keep your rooms booked. Marketing is an ongoing process, but as you develop your initial business plan, you will need to add a marketing plan to bring awareness to your opening. This plan will be what you will use to advertise the opening of your hotel, it is an important part of your overall business strategy. Think back to the target audience that you identified in your market research. Using that initial audience, you can now conduct more in-depth customer research to determine who your customers are. Some potential marketing ideas to explore include; SEM and PPC Advertising, Content Marketing, Social Media Marketing, Partnership Marketing, Print, and Traditional advertising, etc. Employ the services of a creative marketing team and brainstorm how you can make your business stand out.
- Step 7 - Recruit and Train Staff: Recruiting the right hotel employees to help you achieve your vision is one of the most crucial steps to making your entire hotel business run by design. Many hotels choose to hire from the executive and departmental positions first, setting the tone and direction. These leaders can then identify what they want to see within their teams and how many staff members they need. Find ways to communicate your core mission, values, and approach to this new business throughout the hiring process. This will help you attract candidates who share your vision. Once you’ve hired a great team, take the time to onboard and train them. This is an incredibly important step that will help everyone in the long run.
- Step 8 - Open your Hotel: You are all set !!! All that’s left is to launch your hotel. The goal of the launch is to introduce your brand and concept to the public, it is a great opportunity for you to set yourself apart from your competitors and establish yourself to the community, key stakeholders, influencers, and potential partnerships.