August 20th 2025
Opening a hotel is an exhilarating and complex venture with many different components to plan and tackle. One of the most critical phases (and arguably the most important element) of the process is selecting the right location, and then thoughtfully designing the property. This stage sets the foundation for basically every operational and branding decision you’ll make later. It is one of the dominoes that defines many others that fall after it and sets a trajectory for the business. The physical space of your hotel must align with your market research findings, hotel branding, vision, and ultimately guest expectations. It also must comply with legal and functional constraints.
Let’s explore the essential factors that define this foundational step:
Location – Where will you put your hotel?
Real Estate Strategy – How will you acquire the space?
Construction – How will you build or renovate it?
Design – What kind of details are needed for the interior?
The phrase “location, location, location” is a cliché in real estate, and it is so, because it’s a defining factor in the success of your hotel. The right location impacts everything, from your target demographic to your average daily rate (ADR). It will guide the design of the space, the services you offer, and even the staffing model of your hotel.
When evaluating a location, consider the following:
Tourist and business traffic: Is the area known for consistent visitor demand? This can come from international travelers, to national visitors, to even people in the local community.
Accessibility: How easy is it to reach your property by car, public transport, or foot traffic? Accessing your location easily is a must.
Surrounding amenities: Are there restaurants, shops, or landmarks nearby that complement your offering? You can also build synergy with these businesses in a mutually beneficial way.
Safety and noise levels: Guests want to feel secure and have peaceful surroundings, especially at night. This point is quite self-explanatory.
It’s important to align your location with the type of hotel you’re building, whether it’s a boutique hotel in an arts district, a resort by the beach, or a business hotel near a convention center.
Once you’ve narrowed down your ideal geographic area, it’s time to make a key decision about the property itself. There are three main approaches to establishing your hotel’s physical space:
Buying Land & Building
Purchasing a Pre-Existing Hotel / Property
Leasing a Hotel
This approach offers maximum control over layout and design, but typically requires the most time and capital.
Here are the details you’ll need to investigate:
Zoning laws: Ensure the land is zoned for commercial hospitality use. If it’s not zoned for such uses, can you apply for it to be a commercial space?
Permits and approvals: Building permits for the hotel, environmental impact studies, and fire safety approvals are just the beginning of the adventure.
Infrastructure needs: Consider the availability of fundamental utilities like water, sewage, electricity, and internet services.
Buying and renovating an existing hotel or commercial building can be more cost-effective and faster than starting from scratch. However, this comes with other challenges.
Here are some things to consider for this option:
Structural integrity: Conduct thorough inspections of the property for plumbing, electrical, HVAC, and foundation issues.
Code compliance: Pre-existing buildings often require expensive upgrades to meet modern fire and accessibility codes.
Design limitations: You may not have free rein with your ideal design, and it may be contingent on the constraints of the existing footprint or historical preservation rules.
Leasing a space reduces your upfront investment and can be a viable option in urban areas. Be sure to:
Negotiate lease terms that account for renovation periods and any possible permit delays.
Use the lease to clarify who is responsible for structural repairs, compliance, and insurance.
Understand restrictions, as the landlord may impose specific clauses for design, signage, or operations.
Once the location and real estate path are decided, you can focus on the construction, architecture, and interior design of the hotel. These elements play a major role in operational efficiency and directly impact the guest experience.
A well-designed hotel isn’t just about aesthetics, it’s also about how people move and actually interact with the space.
Consider these important details:
Traffic flow: Ensure smooth movement from the entrance to the front desk, elevators, rooms, and key amenities.
Service areas: Plan for efficient back-of-house operations, including housekeeping storage, laundry, and maintenance access.
Flexibility: Create adaptable spaces that can serve multiple functions, like a breakfast area that turns into a bar in the evening.
Design is a huge part of your hotel’s brand. Make sure to work with architects and interior designers that will bring your concept to life:
Choose a consistent theme or aesthetic that aligns with your brand identity, whether minimalist, industrial, bohemian, or luxury.
Use materials and textures that balance durability with warmth and comfort.
Incorporate local elements like art, furnishings, or architectural motifs to help your hotel stand out and reflect its surroundings.
Determining the number and types of rooms you’ll offer is both a financial and operational decision. Here are crucial details to define regarding the rooms:
Total room count: This affects staffing, utilities, and profitability.
Room types: Will you offer standard rooms only, or also suites, family rooms, and accessible units?
Floor plans: Efficient layouts can make small rooms feel spacious and reduce construction costs.
Numbering system: Logical room numbers help with wayfinding and are often required for emergency response.
The mix of room types should reflect your target market. For example, a business hotel may focus on single-occupancy rooms with workstations, while a family-oriented hotel might include bunk beds, kitchenettes, and interconnecting rooms.
Beyond the rooms, guests evaluate a hotel based on its common areas and services. These facilities can enhance the guest experience and influence your ability to charge premium rates.
Here are some common hotel amenities to consider during the planning of the hotel and construction phase:
Lobby: A welcoming, functional space that sets the tone for the stay. Consider space for lounging, working, and social interaction.
Restaurant or café: An in-house dining option can generate additional revenue, though it adds operational complexity.
Fitness center or pool: Increasingly expected in mid-market and upscale properties.
Meeting or co-working spaces: Valuable for hotels targeting business travelers or digital nomads.
Parking: Essential in suburban and rural areas, and a premium feature in urban environments.
Outdoor areas: Rooftop terraces, patios, or gardens can create memorable guest experiences.
When designing these spaces, remember that each square foot comes with a cost. Evaluate how each amenity supports your overall business goals and whether the investment will deliver a return through higher occupancy, brand appeal, or ancillary revenue.
Choosing the right location and thoughtfully designing your property is one of the most impactful steps in opening a successful hotel. From real estate decisions of the hotel, as well as compliance considerations for the business, to architectural planning and guest-focused design, this phase is both a creative and strategic challenge.
Balancing beauty with functionality, and guest experience with operational efficiency, will give your hotel the strong foundation it needs to thrive. In the next part of this guide, we’ll dive into legal matters and compliance, where you’ll learn how to bring your vision to life through people, processes, and promotion.
Check out our full range of hospitality technology products, and / or contact our hospitality technology products team directly. We’re happy to address your inquiries and point you in the right direction.
Here are nine key points you should consider before opening a hotel. We’ll go into each point more in depth in separate articles linked here.
Key aspects of business and financial planning for a hotel: investment and funding, budgeting, revenue models, and break-even analysis.
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