You’ve made the decision to pursue your goal of opening your own hotel. To receive financial assistance and the strategies you need to thrive, the first step is to write a hotel business plan. It’s like a map to the big picture. However, we’ve noticed that this is where the majority of businesses get trapped. Writing a good hotel business plan is actually not that tough. It’s nothing more than a well-organized description of your vision. Many people try to incorporate every aspect of their hotel idea into the business plan. This article explains what to include and exclude from your hotel business plan and gives a clear definition of what a hotel business executive summary is.
What is Hotel Business?
The hospitality industry presently employs over 2.7 million people, according to the British Hospitality Association (BHA). With more than 45,000 establishments responsible for jobs in hotels and related services across the UK, the hotel industry is a major component of it.
The most important aspect of the hotel industry is, of course, the provision of lodging. The size of the facility can range from a few beds to a skyscraper in the style of Las Vegas, and while beds are required, a hotel owner might opt to include a variety of services such as a restaurant, conference facilities, or health and spa amenities.
How to Start a Hotel Business
Starting a hotel business might seem so simple, but always keep in mind that you need to take some steps to accomplish success in the business.
The following are steps to follow when starting a hotel business:
#1. Make a Business Plan
You won’t know where you’re heading if you don’t have a hotel business plan, and you’ll always be lagging behind without one. A hotel business plan is a document with a single purpose: to persuade the reader to invest in your hotel business. When looking for financing to open a hotel, this document will assist you in addressing possible investors or banks. Don’t worry if you’ve never written a business plan before; we’re here to assist you.
#2. Hire and Train Your Team
The prosperity of a hotel business is just as good as the people that work there. Many hotels choose to hire main executives and departmental roles first, establishing the tone and direction for the rest of their hiring decisions.
You’ll position yourself to give value to your guests and become a market leader if you hire exceptional staff at all levels. Make sure your hotel manager and staff are well trained to follow procedures and are competent to deal with customers’ concerns and complaints. Prepare them to go to whatever lengths to ensure that your hotel’s guests are pleased.
#3. Scoping Out a Location To Open Your Hotel
After you’ve decided on an idea, the next step is to find a location. The process of choosing the best location for your hotel is critical, as your hotel’s commercial success and occupancy rate are dependent on it.
Use the following questions when you’re searching for a good location to start your hotel business:
- What part of the region will you be operating in?
- Is there a rise in demand in the area?
- What nearby amenities, such as airports, beaches, or event sites, will you have access to?
#4. Drafting a Marketing Plan
When you open a hotel, you’ll need a great marketing plan to advertise your hotel business and build customer trust. Your hotel marketing plan is a vital aspect of your hotel business plan, driving decisions about decor, everyday operations, communications, and customer service, among other things. Consider the target audience you discovered through your market research while thinking of the right marketing plan to go for.
You can now do further in-depth customer research using that initial audience to decide:
- Who are your customers?
- Where do you find them?
- How you’ll communicate with them
- How do they define value?
A marketing plan includes everything from ensuring your hotel is listed on online booking systems and paying for online advertising to developing a website and social media profiles that highlight all of your hotel’s amenities.
Finally, you’ll need to develop a strategy for increasing occupancy in off-seasons, such as offering discounted prices on your services throughout a specific week.
#5. Secure the Funds Needed To Open Your Hotel Business
Write a solid, well-thought-out plan and submit it to investors and lenders to secure the necessary funds. It’s critical to project confidence and demonstrate that you’ve given your new business idea careful consideration. After you’ve written your hotel’s business plan, the next stage is to secure the funds you’ll need to build and start a hotel. It’s a smart idea to raise funds for your new hotel business if your circumstances allow it and you have a great hotel business plan.
The Rules and Regulations Involved in Starting and Running a Hotel Business
There is a variety of hotel-related legislation. In the United Kingdom, you must register your hotel with your local authority’s environmental health agency at least 28 days before it opens for business.
It’s vital to remember that this procedure is completely free. Allowing a local authority to inspect the space you’ll be using to make food and verify it’s safe and sanitary is all that’s required. You’ll also have to follow any restrictions set forth by the Food Standards Agency, a government agency that sets standards for sanitation, sampling, labeling, and traceability in food facilities.
Finally, if you wish to sell alcohol, you’ll need to apply for a premises licence. You’ll be able to perform live and recorded music as well as provide hot food and drinks, even late into the night.
The restrictions that apply to your hotel business will differ depending on its location, size, and the services it provides. The amount of work required to comply with the standards varies depending on whether you are purchasing an existing hotel or opening a new one.
Also, keep in mind that hotels are subjected to an annual inspection. Any security breaches must be addressed immediately, or you risk being shut down.
What Is a Hotel Business Plan?
Your hotel business is incomplete without a hotel business plan. It is a roadmap to the success of your hotel business. You also need to direct readers or investors down the route you want them to take. Writing a hotel business plan might seem confusing. That is why we’ve compiled a very good and catchy hotel business plan just for YOU!
Here are the steps to putting your hotel business plan into action, as well as what it must include:
#1. Executive Summary
A hotel business plan executive summary explains what your hotel business does, why an investor would be ready to invest in it, why their money will be wisely spent, and why you do what you do.
It’s a must that you make your hotel business plan executive summary short, concise, and positive so the reader won’t be bored while reading it. It is in this section of your business plan that you talk about What is it about your hotel that is special or unique from your competitors.
Your hotel business plan executive summary should consist of two main parts; they are:
- Mission Statement
- Objectives
Try to write your hotel business plan executive summary last so that you are completely comfortable with every component of your hotel business proposal.
Remember, this is your chance to persuade them before they’ve even read the entire hotel business plan. So make sure your hotel business plan executive summary is catchy and attractive.
#2. Company Overview
This entails more information on your hotel concept’s USPs (unique selling points). This is where you thoroughly describe yourself, your company, and your major stakeholders. This is an excellent opportunity to share information about yourself and what you want your hotel to do for you.
Consider adding these to your company overview:
- Why do you wish to open a hotel and how did you get the concept?
- Give basic information about the hotel, such as its location, name, ideal customer or target market.
- Your most important objectives and goals.
- Any prior experience with launching a business is a plus
#3. Industry Analysis
Information on present market developments and market conditions, as well as how they will affect your hotel. This is necessary since investors want to know that you have a thorough understanding of the hotel and tourism industry. This serves as the foundation for judgments such as which trends and advancements to follow.
#4. Management Team
Carefully think about your hotel’s management and important staff members. This is your chance to demonstrate that your project has real promise and is more than a silly idea. Concentrate on what makes you uniquely qualified to make your hotel a success. A clear description of the extra value everyone contributes to the business will impress stakeholders, and having a great team is the secret to success.
Write brief bios for each of these individuals, detailing who they are, what they will be doing, and a section on their previous experience and appropriateness for the post.
#5. Customer Analysis
Before you make any decisions, you must first determine who your rivals and target audience are. You must also have a good understanding of the hotel sector from both a social and economic standpoint. What are the most common categories of guests who will stay at your hotel?
Consider the following in your customer analysis:
- Location
- Amenities
- Services.
- Why do they choose to stay at your hotel?
- What characteristics would your ideal guest desire?
- What is the best price range for this guest’s room?
- Why would your ideal guest choose to stay at your hotel rather than at one of your competitors?
This will not only establish you as an expert from the perspective of possible investors, but it will also keep you ahead of the competition.
#6. Funding
The next step is to show where your initial start-up funding comes from to possible investors. Are you paying for your accommodation out of your own pocket? Do you have any other sources of funding? Your potential investors will want to know how much money you have for a start-up and where it came from. They’ll also want to know how much money you still need.
If you’re raising funds, have a plan for how much money you’ll need and when you’ll need it. Describe how you plan to give investors a return on their investment or when loans will be repaid.
The means by which you can get funds are:
- Personal loans
- Family and friends
- Partners or sponsors
- Bank loan
- Savings
#7. Hotel Equipment and Amenities
It’s critical to specify how many rooms you plan to have available at your hotel. In addition, what amenities will be available in each hotel room? This is an excellent time for potential investors to get a sense of the scale of your new business and how much money you’ll need.
There’s a lot to think about here, and it all depends on your hotel’s specialization. Of course, if your hotel has a distinctive theme or a unique feature, there will be additional fees. As a result, make sure to include it in this part of your hotel business plan.
#8. Appendix
Fill in the blanks with any other pertinent information. Don’t put too many details into the primary portions of your hotel business plan. Instead, use attachments to help them in this section.
Final Thoughts
Starting a business might seem exciting, but it might not be successful without a business plan. Having a hotel business plan for your hotel will make you worry less about the progress of your hotel because you know you already have a good plan that will help in the management of your hotel business. Click here to get a good hotel business plan just for you!
FAQs
Are hotels a good business?
If you have the proper combination of location, price point, physical asset quality, marketing plan, devoted personnel, and supportive investors and management partners, owning a hotel can be successful. However, a hotel isn’t profitable by default, so plan to put in a lot of effort to make money.
How much do hotel owners make UK?
The majority of hotel owners, on the other hand, do fairly well. Based on an average of £5k to £6.5k per bedroom, a seven-or eight-bedroom guest home could bring in over £45k per year. This scale is ideal for a semi-retired couple who can anticipate earning around half of their turnover.
Is owning a hotel a good investment?
The financial advantages of owning a hotel are obvious, but the opportunity to experience them is unrivaled by any other real estate investment. Even the most basic limited-service hotel gives you plenty of room to walk around with few restrictions. You can easily access rooms, communal areas, and the back of the house.
