With shelter-in-place orders in effect throughout 2020 due to the COVID-19 pandemic, hotels saw more vacancies than ever before. Fortunately, with vaccine rollouts in motion, experts predict that hotels will start to see a rise in travelers sooner rather than later.
This means it could be the perfect time to open a hotel to accommodate the influx of travelers after everyone has been cooped up inside for more than a year.
But how can you open a successful hotel in such a competitive industry? You’ve come to the right place for guidance.
Keep reading to learn 5 steps to take to open a successful hotel business.
1. Create a Business Plan
Before you do anything else, spend time creating a detailed business plan. It should clearly outline all of your goals for your hotel as well as how you plan to achieve them.
At a minimum, your business plan should include details about the following:
- The products and services you plan to offer to customers
- Your budget for all aspects of the business
- An analysis of your competition
- Financial documentation
Once you put your plan together, it’s a good idea to have a mentor or consultant review it to see if you’ve overlooked anything.
2. Determine Your Target Market
Once your business plan is complete, you’ll want to spend some time defining your target market. Will your hotel cater to business travelers or will it be geared more towards families on vacation?
By defining your ideal customer, you’ll be able to better market to them and differentiate your hotel from the competition.
3. Secure Funding
With your business plan and target market research in hand, you can now focus on securing financing for a new hotel. You’ll need to talk with potential lenders about hotel small business administration (SBA) loans so you have the funds you need to get your hotel up, running, and generating a profit.
Check out this link for more information about some of the top lenders for hotel SBA loans.
4. Take Care of the Legal Paperwork
Next up, you’ll need to officially choose a business name for your hotel and establish it as a limited liability company (LLC). This helps protect you from being personally liable for any business debts.
Then, you’ll need to work with local ordinances to obtain required permits and licenses before you begin construction on your new building. Failure to do this could result in fines or even the closure of your hotel.
5. Develop a Marketing Plan
Once your building is under construction, it’s time to focus on marketing strategies to help get the word out about your new hotel.
If you choose not to work with a marketing agency, you can get started with digital marketing on your own. Using social media, email marketing, and pay-per-click ads is a great way to begin marketing with little experience, as they’re all fairly easy to learn quickly.
You might also consider working with influencers by comping them a stay at your hotel in exchange for them sharing about it with their followers.
Follow These Steps When You Open a Hotel
Now that you’ve read through the steps to follow to open a hotel, you have the basic knowledge you need to bring your dream of running a successful hotel to life.
Looking for more business tips to help you expand your knowledge? Read through our other articles and check back daily for new content.
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