How to Start a Hotel


We’ve all had that one unfortunate hotel experience. Whether you were traveling for work or with family, you found yourself thinking, “Seriously? I’m paying how much for THIS?” The customer service was lacking, their sense of hospitality was underwhelming or the overall quality of your stay was simply not good. “I can do better than this,” you think. If you want to start a business, have a strong customer service frame of mind, are skilled at sales or marketing, and can adhere to professionalism through difficult or stressful situations, you should learn how to start a hotel.

Whether you start a boutique hotel, bed and breakfast, or some other smaller hotel or inn, you need to understand exactly what you’ll be getting into. Starting a hotel is a unique challenge, but it can be incredibly rewarding when you find your niche. So, where do you start? Read on to learn how to start a hotel and understand the first steps you should take to become a successful hotelier:

Find Funding

Starting a hotel will require considerable financial resources. Start by putting together your business plan. In addition to all the common and necessary elements of a business plan, the key to conveying your vision specifically for a hotel is to omit no details regarding design and experience, destination, and location. Cost will vary depending on how many rooms you plan to have, as well as the amenities you will offer.

You might consider buying an existing hotel property or renovating a building into a hotel. Though still requiring a lot of money, these are more cost-effective options than building one from scratch. You’ll likely need bank loans or angel investment and should seek the help of a hospitality consultant, commercial realtor, and/or hotel architect to understand how much money you’ll need to get it off the ground.

Come Up with a Concept

What kind of hotel do you envision? Small, quaint, and comfortable could be your style, or upscale and trendy might be the vibe you go for. Will your hotel be more for business travelers or vacationing families? What will the local market support and what seems to be lacking in the area you choose?

With each decision you make, you’ll come closer to figuring out the entire picture, including amenities and services that will be right for the kind of customer you want to attract. Understand that you will have to make sacrifices in order to succeed as well – it’s nearly impossible to be the perfect hotel for every type of customer imaginable.

Location, Location, Location

Choosing the right location for your hotel is the most important factor that will influence all of your other decisions. You have to consider both destination and location. You might identify the right city, but then you’ll have to figure out where in that city is the best location for your hotel. Consider the area around your hotel: What activities and attractions are in the area for your target customers? What options do they have for meals and is it important to be near business districts or event space? And don’t forget that competition has a place in this decision as well.  What other hotels or lodging options are there in the area, and what seems to be missing where your hotel can fill customers’ needs?

Order the Necessary Supplies

The hospitality industry will require you obtain the proper business licenses and permits. You’ll likely need more than one permit, and you will need appear before the city planning board to clarify your vision and answer any questions in order to be granted a business license. Look into your state’s Department of Revenue or Department of Consumer and Regulatory Affairs or the like to inquire about hotel business licenses. The Small Business Administration’s website offers a list of permits you may need and offers contact information for each state in order to apply.

Once you’ve obtained these permits, the next step is to equip your hotel with the proper materials, equipment, furniture, towels, and food service supplies. This is the fun part, where you get to see your dream hotel really come together. You’ll likely work with a hospitality supply company like American Hotel, which offers money-saying programs for independent properties and can help you understand how much of everything you’ll need, and can set you up with the proper buying cycles to replace items.

Hire Employees

Maintaining your hotel and caring for your guests is a lot of work, and you’ll need to hire the right kind of staff to help manage all the work to be done. Depending on the size of your hotel, you’ll need experienced front desk administrators with a strong customer mindset, a grounds crew and maintenance workers to ensure everything runs properly and is kept to high standards, staff to clean rooms and cook if you offer food services, and perhaps a sales and marketing associate or team to help drive customers to your lobby.

Customers have no problem complaining online and to everyone they know if their stay isn’t perfect, so it’s essential you train your staff to give the highest attention to customer needs. After all, one of the reasons you want to start a hotel is because you can bring an esteemed sense of customer service to your area, right? Pair that with a marketing plan to differentiate yourself from chain hotels and others in the area, and you’ll be well on your way to success.

 


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2 Responses to How to Start a Hotel

  1. Dave,

    Good basics on starting a hotel! If I’m allowed to add, it’s important to partner with someone with strong know-how in hotel business or a mentor who has experience in the industry. It can cut the chase out of finding what works via trials and errors, and focus on the unique challenges you may face in your hotel startup.

    Cheers!

    • Dave Thomas says:

      Agreed — a good mentor is always helpful in any industry, especially the competitive hospitality industry.

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