How to Start a Hotel Business: The Key Steps to Take
About 64% of hoteliers expect to increase revenue in 2021 over 2020. That’s promising when you consider the economy continues to recover during the pandemic.
It actually makes this a great time to start a hotel business. People are traveling again and they’re making up for lost time.
Read on to learn how to start a hotel business.
Work with an attorney to ensure you choose the right business entity and file the correct paperwork with the state.”
And if you want to save some time and money, LLCGuys.com advises to rather user an LLC incorporation service like ZenBusiness or Northwest to make the process very easy and rather inexpensive.
1. Make a Plan
A written business plan gives you a better chance to succeed in the hotel business. It’s how you’ll determine your start-up costs, market the hotel business, and operating costs.
You have to address the risks of opening a hotel business and how you’ll overcome them. For instance, what do you do if another pandemic wave forces you to shut down?
Consider the hotel guests and the types that you cater to. Think through how you’ll provide an experience that gets them to write a positive review about your business.
2. Set Up the Hotel Business
Logistically, there are a lot of things you have to do to set up the business. Register the business with your secretary of state’s office.
Work with an attorney to ensure you choose the right business entity and file the correct paperwork with the state.
It also helps to learn about permits and zoning laws in your area. You’ll need food and beverage permits and comply with all public building codes.
3. Get Financing
Starting a hotel business is expensive. Even if your business model is to run a quaint bed and breakfast, you still need to finance the property purchase.
Look at all of your start-up expenses, including permits, employees, and location costs. Add several months’ worth of operations costs to give your business cash flow.
Take out a small business loan and apply for economic grants in your area. You’ll need your business plan to show lenders how you plan to be profitable and repay the loan.
4. Get Location and Furnish It
You can find a plot of land and build on it, demolish an old building and construct a hotel, or purchase an existing building and renovate it.
When you complete construction, you’ll need to furnish the hotel. Keep in mind that they need to be true to the brand.
Modern brands need sleek and modern furniture, such as hotel desk chairs, beds, end tables, and dining room furniture.
5. Market the Hotel
Don’t depend on booking sites to market your hotel business. They’re helpful, but they eat away at your revenue, taking anywhere between 10% and 15% as a booking fee.
Do as much direct marketing as you can to limit the loss of revenue. Get your website up and running and accept bookings on the site.
Promote your business and the location through social media. Connect with your local tourism bureau and take part in special promotions.
How to Start a Hotel Business and Succeed
The pandemic turned the hotel industry on its head. As the industry recovers, you can jump right in by starting a hotel business.
It takes time to learn how to start a hotel business. It takes a solid plan, financing, and smart marketing tactics. You won’t have to rely on booking sites to succeed.
Once you put these steps into action, you’ll be ready to open a successful hotel. Head over to the home page for the latest business and travel news.
