Hotel Business: How to Start a Hotel Business

Starting a hotel is capital intensive, tough and challenging. The business is location sensitive, has lots of players and highly profitable.
The scope and size of your hotel dictates the amount of startup funds you need. Other considerations are the type of hotel, bread- breakfast, stopover hotel, self service or a hotel boutique.
You need some hotel management experience, adequate funding.  It takes several years to get established and turn a profit. Other important points are if you want to build from scratch or acquiring an existing one.
Leasing a property and turning it into a hotel is bad the best approach is to buy an existing hotel and revamping. However building from scratch requires huge investment in finance, time and planning.
Type of Hotel
What kind of hotel are you trying to run? You need to decide on the mode of accommodation and services for your guests.
There are different kinds such as bread and breakfast, self service, and high-end boutique hotels. More are stop-over, hotel for business travelers or a holiday inn.
There are three major criteria which are establishing an upscale establishment, affordable hotel or budget. Other considerations are type of amenities you want to provide.
The hotel could run a basic room accommodation have a fitness center, recreational area or restaurant.
Once you have decided on the kind of hotel you want then the location is the next step. The location usually determines the type of hotel and clientele.
Highbrow area attracts high net worth individuals who expect certain standards. The amount you charge, furnishing and amenities differ from each establishment.  Beach side hotels and tourist destination have their own type of clientele.
You need permits and licensing to start a hotel business. Register your business name and get liability insurance.
Hotel business has many sectors such as supplying food and beverages including alcohol. You need a license to sell alcohol and food handling permit.
If you have a swimming pool you need a certified lifeguard and medical center. Other licensing are fire safety and staff insurance.
You need a professional to write your business plan. The plan should be very comprehensive and cover all parameters.
You need lots of money to start a hotel business. Lending from friends and family will not provide the type of money you need.
You need venture capitalists, sales of preference shares to investors. You need core investors or major bank loans.
Things to add in your business plan are long term goals, management structure and a market analysis. Outline future goals, growth, financial sources and promotional strategy.
Buy or Build
Register your business as a limited liability company including tax identification number. Find out all the licensing you requires based on the amenities you provide.
Buy or Build
There are four ways to start a hotel business. You can lease a building and convert into a hotel or buy an old hotel.
Another strategy is to buy landed property and build from scratch. Some entrepreneurs prefer buying a regular building and redesign into a hotel.
Building a downscale hotel with sparse amenities is a bad strategy. You compete with established hotel in your host community that provides better service and prices.
The best option is buying an old establishment and upgrading. Once you decide on a location, buy or build a hotel, refurbish and apply for licensing.
You need to distinguish your establishment by creating a new branded name. The name of your establishment is very important to the corporate identity of your hotel.
Other major considerations are utility bills and structural fixtures. Create a beautiful aesthetically pleasing hotel by using a certified interior decorator.
Full Service
Offering full service come with its own challenges. Additional amenities and services like restaurant, beauty spa, bookshop add to the expense.
To run a bar, night club or pub selling alcohol require sales permit. Others are security, furniture and staff.
The same applies to restaurants and fast food lounge. You need food handling certification and occasional checks and certification.
Other amenities that attract additional funds are building a banquet hall, sports, swimming pool or recreational areas.
Amenities found in a Hotels
Banquet hall
Night club
Sports complex
Book store
Boutique and spa
Car rental service
Marketing and Promotion
Promote your hotel through a website or yellow pages. Use travel websites, agencies and tourist locations.
 You can advertise on television or use print media. Advertise in national newspapers and create nice billboards.


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