How to Start a Hotel: 5 Keys to Success

Starting a hotel requires careful choice of a location and strategy, a business plan, access to considerable financial resources, and a customer service mindset.

1) Location and Opportunity

The location for your hotel is highly linked with the opportunity that you feel there is for your hotel. In the right location, where competitors are not fulfilling all customer needs, a hotel can thrive. However, in a beautiful neighborhood that happens to have heavy competition from existing hotels, success may not be so forthcoming. Likewise, if the neighborhood leaves too much to be desired, you may not be able to price the rooms low enough to encourage travelers to stay at your hotel, even if you are within walking distance of key attractions.

2) Strategy

The next step is to know how customers will answer the question why my hotel? How will you tailor your services to the customers you want to attract, whether they are families with kids, couples on romantic vacations, businesspeople, or international tourists? Consider the combination of amenities, atmosphere, location, and services that will be right for your customers. Always keep in mind that strategy means making tradeoffs — it is almost impossible to be everything to everyone and succeed. You might have to forgo certain customer target markets in order to make your service offering perfect for your most desired customers.

3) Planning

A simple, clear, but persuasive hotel business plan will be necessary not only for you to think through how you will take on the opportunity, but for you to convince any investor or lender that you have the ability to do so. No savvy investor will be attracted by a lack of planning. There is no excuse to not create a plan with the wealth of information available on writing business plans and even business plan templates tailored to the hotel business sector.

4) Fundraising

Whether you buy an existing hotel, build one from scratch, or renovate a building into a hotel, you will need millions of dollars to invest. Assuming you do not have this money, you will need to seek bank loans and/or angel investment in your hotel. As you will be working with considerable assets, dependable and experienced legal and accounting help is a must as you create deals with investors.

5) Hospitality Mindset

Finally, you must have an ingrained sense of how you want your guests to be treated so that you can instill this mindset in your top management and they can, in turn, teach this to the staff. Staying at a hotel can be stressful and uncomfortable, and guests demand the highest attention to their needs or they will have no problem complaining loudly and publicly. If employees sense you have higher motives than customer satisfaction, customer service may fall by the wayside and your hotel business may fail or never take off in the first place.

The first step to starting a hotel is to develop your hotel business plan. Growthink provides products and services to help you develop a professional business plan and turn your dream into reality.

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