Are you considering starting a hospitality business? The hospitality industry is constantly growing and is an excellent market to expand into. However, you should consider many factors before you’re ready to pursue your own hotel business. Here is a quick rundown of everything you need to know before opening your own hotel. We’ll help you explore the basics of selecting a hotel model, creating a business plan, and following the steps of the opening process.
Understand the Hotel Market
The hotel market is split between two main sectors: independent hotels and hotel chains. Independent hotels make up more of the market, but they have smaller capacities than hotels in chains. Hotel chains often attract more business customers, while independent hotels have a target audience of families and solo travelers.
No matter what category of hotel you want to invest in, the market is constantly growing. Year after year, the hotel and motel industries continue to grow and reach new revenue records. This makes the present an excellent time for entrepreneurs to own and operate a hospitality business.
Consider Your Hotel Model
One of the biggest initial decisions you’ll need to make when planning a hotel business is choosing the model you want to pursue. Joining a chain hotel means buying and managing a hotel as part of a larger business and chain, providing a certain level of stability. On the other hand, opening an independent hotel model can give you more freedom and flexibility when it comes to design, management, and other aspects.
Some other types of hotels include resorts, boutique hotels, and motels. Resorts are hospitality businesses that offer a variety of facilities on-site. These could include in-resort spas, pools, recreational facilities, restaurants, and entertainment events. Resorts can be part of a hotel chain or operate independently. Likewise, boutique hotels are independent hotels located near attractions such as shopping districts and city centers. These types of hotels allow you to get creative with aesthetics and design.
Create a Hotel Business Plan
Once you’ve identified your ideal hotel type, you’ll need to start drafting a business plan. A hotel business plan outlines your hotel’s goals and the roadmap to opening. A business plan can help persuade partners to work with you and help your hotel secure funding, which are additional reasons to format your own. To create a plan, identify your hotel’s goals, location, target audience, and other basic information that justifies opening and funding a new hospitality service. You can also use a business plan as a checklist for amenities, features, and other elements and services you want to include.
Basic Steps to Opening a Hotel
Now that you know the basics of the hotel market, here are some broader steps you’ll need to follow to open your own hotel.
Choose To Build or Buy
One of the biggest decisions to make when starting a hotel business is whether you want to take over an existing property or start from scratch. Buying an existing hotel for sale can provide you with previous customer information, performance history, and a turnkey business. However, you have more freedom with location and design when building a hotel business from the ground up.
Whether you choose to build a new business from scratch or buy a preexisting model, you’ll need a reputable source for hospitality supplies and appliances. Older hotels may feature old appliances that make the venue feel outdated. Find your go-to hotel equipment supplier, such as Transworld Services, to stock your hotel with the latest televisions, kitchen appliances, and other modern equipment.
Scope Out the Location
Location is everything when it comes to starting a hotel business. Consider the region you want to operate your new business in and whether the area attracts heavy traffic for vacations, work-related events, and entertainment venues. The more popular an area, the more competition you will have as a hospitality business. If you’re planning an independent hotel model, you may want to choose a location near these popular attractions but not at the heart of the competition.
Obtain the Necessary Permits
To keep your hotel in line with the rules and regulations of hospitality businesses, you need to have the proper permits and licenses to run your hotel. If you’re planning to open a hotel in the US, you’ll need the following:
- Business license
- Food service license
- Food handler’s permit (for kitchen and food services)
- Liquor license (for you in-hotel bars)
- Premises license
Hotels also have strict fire safety codes, so you’ll need your local fire department to certify your hotel. Fire safety is part of the Certificate of Occupancy (CO) you will need for operation.
Start Marketing Your Hotel
Finally, once you have your hotel’s design, layout, and legal necessities confirmed, you can get started on the marketing process. You should start marketing even before you build your hotel if you’re constructing a new building. This will help your business start attracting customers and generate cash flow as soon as you open your doors.
Reference your market research and hotel business plan to identify your target audience and main hotel attractions. For example, if your business is near a common vacation destination, you may want to market to families during prime vacationing months of the year.
Benefits of Starting a Hotel
While these steps are just the beginning of starting a hotel business, and the preparations can be quite long and involved, there are many reasons to go through this process. One of the biggest benefits of starting a hotel business now is the increasing demand and success of the market. Owning and running your own hotel also allows you to have full control over your business. The hospitality industry allows you to constantly partner with and meet new people, which is ideal for those who enjoy a fast-paced work environment.
Use this quick guide on everything you need to know before you open a hotel to prepare yourself for this face-paced industry. And whether you’re outfitting a new hotel with modern appliances or upgrading old models from a venue you bought, trust Transworld Services for all your appliance needs. We offer high-end hospitality TVs, kitchen appliances, and housekeeping appliances for hotels, motels, and other hospitality services. Having the right appliances can attract new customers to your startup hotel business, so don’t wait to make the upgrade.