If you learn how to run a hotel business successfully, and do things the right way, you'll enjoy a deeply rewarding and highly profitable experience. For many people, starting a small hotel business is part of their dream life. If you're starting to think more seriously about this dream, it's time to start planning and preparing to actually launch a hotel business.
We're here to help. This blog covers all the key decisions and steps involved in getting your hotel off the ground.
Open your hotel with all-in-one software
Starting a hotel can seem overwhelming, but all-in-one property management solution can help make things run easier for you and your guests.
Is running a hotel business right for me?
There are plenty of reasons why running a hotel can be a great lifestyle and business decision. But it's not for everyone. Being on call around the clock, juggling guest demands and sorting through a never-ending list of housekeeping and maintenance tasks can create a lot of pressure.
Be honest when thinking about whether you have the fantuan database personality traits, motivation and work ethic to adapt to the hotel business and make a success of it.
How big is the hotel market?
If you're thinking of entering the hotel market, you probably know it's a wide and diverse one. There are more than 700,000 hotels and resorts worldwide offering more than four million rooms worldwide. The value of the market is more than $1.2 trillion globally each year.
From budget to boutique, business and bed and breakfast, the hotel market caters to all types of guests. While Hilton remains the world's most valuable hospitality brand , with its value up 35% even during the pandemic, Airbnb is currently considered the most valuable tourism and leisure brand with a value of $10.5 billion.
The hotel market is expected to bounce back well after COVID-19. But, even where market conditions are positive, there's still work to be done to make a hotel profitable.
How do hotel businesses make a profit?
Put simply, a hotel makes a profit when it generates enough income from selling rooms to cover all expenses and then generate revenue on top of that. Revenue forecasting and financial planning should clearly show how your hotel will make a profit.
To make sure profits are healthy, hotels must focus on:
Increasing income (for example, developing a room pricing strategy, putting more time into marketing or adding another income stream by hiring out a large room for conferences)
Decreasing expenses (for example, repairing instead of replacing, using tech to automate processes or buying supplies in bulk).
Hotel business costs for starters
The reality is that without access to a decent amount of cash, your hotel dream doesn't have a realistic chance of getting off the ground. So how much does it cost to start a hotel, how much does it cost to run a hotel per day, and what costs will you need to be prepared for?
How much does it cost to start a hotel?
Data from the US indicates it generally costs $323,500 per room to set up a full-service style hotel. Other estimates suggest it'll cost a cool $2.5 million to set up a medium sized 4 star hotel. Of course, the location, size and style will impact start up costs enormously.
But you don't necessarily need millions to get started with a small property. If you're wondering how to start a hotel business with no money or on a tight budget, you only have to look as far as your own backyard. Borrowing money to build a granny flat or two, for example, and getting started on Airbnb can be a fast and affordable way to dip your toes into the hotel industry.
