As half of all Americans leave their vacation days just sitting on the table, there’s a lot of potential vacations that aren’t being taken. One of the biggest reasons that people don’t leave town is that no place is drawing them to an exciting new experience. If you get into the hotel business, you could take advantage of this large market waiting to be unlocked so long as you know how to get started.
Here are five tips to let you know what it takes to get involved in owning your own hotel.
1. Location, Location, Location
While you might think you understand what it takes to get into the hotel business, if location isn’t the first thing on your mind, you’ve got it all wrong. While you obviously want to be in an area where there’s lots of tourist activity, you also need to think about competition. On top of that, you need to consider whether or not this particular part of town is the ideal location for a hotel of your type.
If you’re located in the city center but want to own a hotel with lots of balconies and seaside views, you might have the wrong spot. If you want to have lots of people all year round, you might want to avoid a region where the snow falls so hard that no one can get on the roads.
You need your business to thrive so you need to find an area that you love. You’re going to have to devote yourself to that region and that neighborhood, so you need to get very comfortable with it.
2. You Need a Capital Plan
No hotel can start without money. While Airbnb has created opportunities for a lot of regular renters, homeowners, and consumers to flirt with the hotel business, you need real money. You can’t start a hotel without a massive infusion of cash or a large loan from a bank.
Even if you’re able to score a large loan, you need a breakdown of how you’re going to spend every dollar. You can’t ask for millions of dollars from most people without them want to check up on that investment. They need to see results and you need to know where you’re headed with their money if you want to get them excited about their investment.
Angel investors and venture capitalists are great, but be aware they’re going to want some say in their investment. If you want to seek total control over the direction of your project, bank loans are the way to go.
Check out Assets America so you know more about the costs of building a hotel.
3. Build a Business Plan
Having a plan for what you’re going to do with your money falls under the umbrella of your business plan. It’s hard to get money if you don’t have a business plan in mind. You need to have a clear and concise plan with problems anticipated.
You should think about the kinds of obstacles you’re likely to face and address them head-on. Consider how you’re going to manage your hotel and who is going to be needed to staff it. Think about your marketing plan and how you’re going to differentiate yourself.
Consider how much could be made each season. Even if your region gets visitors all year round, you’ll surely have some part of the year where it’s slower than the rest. How will you still make a profit even if your hotel is relatively empty?
Any investor who would want to get involved with your project is going to look at what it is you plan to do with their money. They want to be excited, show something new, and given a reason to believe in your project. If you’re not excited about your project by your business plan, how can they be?
4. Have a Service Plan
If you really want to succeed in the hotel or hospitality industry, you need to have a plan for how you’re going to provide exceptional and memorable service. When you’re starting your own hotel, you have the opportunity to differentiate yourself from the major hotel chains. You can provide an experience that feels personal, high-end, and fills a niche that other companies can’t.
When you’re running a small business, you’re much more agile than bigger companies. You can move quickly and easily, offering new services as the needs of your customers change. You can service clients who are meeting for a just-announced conference or cater to a company that’s checking out your region to build their next office.
You also need a quality service plan to help engage repeat visitors.
Given that 84% of people trust online reviews as much as recommendations from friends and relatives, your online presence matters. Work hard to get good reviews online so that you can get people coming back. You can also use those reviews to identify who your target demographic is.
5. Learn More About Digital Marketing
Since most bookings for hotels and hospitality services happen online now, you need to have a strong online presence. You should be on every major social media site and offering exclusive deals to your followers. The more that you engage with people online, the more that you’ll learn from them about how you can serve them better.
Consider starting a blog.
When people are searching for a specific service, like a hotel room, online or looking for information about a vacation spot, they use a search engine.
Search engines return results that are meant to answer the concerns of their users and the best way to engage with those searches is with a blog. You can offer valuable information and then recommend that people stay at your hotel when they’re looking to visit the location they’re searching about.
The Hotel Business is Easy if You Find Your Place
If you can find your niche in the hotel business, you can do very well. You can even grow and expand your brand to multiple cities, so long as you’re able to make your brand translate.
If you need help estimating hotel costs, check out our guide for tips.
