If you buy an existing hotel it will probably be cheaper than building a new one, unless the property needs major renovations. You may also be able to keep some of the staff, which will simplify your employment hunt later on. However, if the hotel you’re buying had a bad reputation, your profits may suffer. You’ll have to work hard to advertise that the hotel is under new management. If you build a new hotel, it will probably be more expensive. You will be able to build it however you want, though, which means you could design it for a specific niche or market. Also keep in mind that if you build a new hotel, you’ll have to work hard to advertise your grand opening to get customers. Also make sure that when building a new hotel you check to make sure the area is zoned for hotels and guest houses.
Find out what competitors charge. Look at all the local hotels and find out their nightly rates. Remember that price isn’t everything, though- if a hotel is cheap but all the reviews are terrible, you shouldn’t try to drop prices to compete with it. Read customer reviews online. This will give you an idea of praises or complaints customers have had. This way you can get an idea of what visitors are looking for in the hotels they stay at, which will allow you to cater to that market. Look at what local hotels offer besides rooms. Do they have restaurants? Swimming pools? Gyms? Breakfast service? Book a stay at some local hotels to really get a feel for what they offer. Staying over a night will allow you to closely investigate competition and get ideas for your own hotel.
A personal referral is usually the best way to find a reliable accountant. Ask other local small business owners who their accountants are and if they’re satisfied with their work. You could also see if your local Chamber of Commerce hosts networking events for small business owners where you could connect with potential accountants. Schedule an appointment with potential accountants. Most accountants will offer a free introductory meeting for potential clients. When you compile a list of candidates, meet with them and discuss their experience and qualifications to see if they would be a good fit for your hotel. Find out if a candidate has experience working with hotels. Hotels are unique businesses that require particular knowledge. It would be ideal if your candidate has worked with hotels before, preferably an independently owned one. This will ensure that he has experience with particular situations you could face. Decide if the candidate is reliable. In addition to experience, you’ll want an accountant you can work with long-term. If he is late for meetings, doesn’t return calls, and does sloppy work, he is probably not the best partner for you, even if he has good experience. Remember, you’re trying to form a long-term partnership with someone who will help you grow your business.
A description of the services your hotel will offer. Describe how these will set you apart from other hotels in the area. Will you offer better rates? More personal service? Investors will want to see what makes your hotel unique. Who your potential market is. Explain what demographic you’re catering to, and why they will pick your hotel over another. A projection for your future earnings. Investors will want to see that your hotel will be profitable. With your accountant’s help, calculate what you expect your annual revenue to be. Also state how long before you expect to start earning a profit, and where your hotel will be in the next several years. A full breakdown of your costs. Between buying or leasing the property, renovating it, and furnishing it, you’ll incur a lot of costs starting your hotel. Come up with as exact an estimate as you can for your total expenses when asking for loans. Also be sure to include a good estimate for your day-to-day operating costs. It may take several months for your hotel to start attracting enough customers to cover your expenses, so you’ll need cash to stay open during that time.
Banks. You can get a loan from a bank for a few months to a few years, depending on the type of loan. This can cover your opening costs and your first few months of operating expenses. Private investors. These can be friends, family, or other business owners interested in making an investment. Make sure you define whether these people are just providing a loan that you will pay back with interest, or if they’re actually buying into your company. It would be helpful to draw up a contract defining the terms of your agreement and having it notarized to prevent problems in the future.
Know your costs. You should calculate exactly how much it will cost to keep your hotel open every day. Then multiply this to find out how much it will cost to run your hotel on the monthly basis. Your income will have to at least cover your monthly expenses or you won’t be able to stay open. Find out what customers are willing to pay. This will take some trial and error. When you’re just starting out, your only guideline may be your operating costs. If after a few months you notice that your rooms are constantly booked, you can afford to raise prices. If you’re having trouble getting customers, lower your prices. You can also survey customers after they stay and ask if they found the room rate fair. Adjust prices based on the season. In your busy season, you can afford to make prices higher because more people are looking to go on vacation. In slower seasons, make your rates lower to attract off-season customers.
Housekeepers. Cleanliness should be your number one priority when running your hotel. A dirty hotel will get a bad reputation quickly and customers won’t come. Depending on the size of your hotel, you may need only one housekeeper or a team. A housekeeper can usually cover about 10-15 rooms per day, so keep this in mind when hiring. Desk staff. Even small hotels are usually expected to have someone on the front desk at all times. You could do this yourself during some hours, but you’ll need a team to staff the desk 24 hours a day. A maintenance worker. One or two maintenance workers should be sufficient for a small hotel. They need to be general-purpose workers who can perform a wide range of tasks: plumbing, painting, repair work, electrical, etc. That way you can let your maintenance men take care of smaller tasks and if they can’t handle something, you can hire a professional to do a comprehensive job. A cook. If you plan on offering food at your hotel, you’ll need at least one cook. Smaller hotels might only offer breakfast, so you may only need to have the cook in for a few hours a day.
Stress that all guests are to be treated cordially. Without good service your customers will not come back, and your business will fail. Also state what kinds of activities are prohibited on the premises, and spell out when termination is a possible outcome.
Pictures of the property. Guests will want to see where they will be staying. Include pictures of rooms, as well as any scenic views that may be nearby. Biographical information about you. Make your website more personal by placing yourself on the website. If staff are willing, you can include them as well. That will provide the kind of personal service that attracts guests to bed & breakfasts and guest houses. A history of the hotel. Some small hotels are located in historic houses. If so, you’ll attract a specific market of history enthusiasts, and you could cater to this by providing a full history of the building and surrounding area. Any special sales or deals that your hotel is offering. Lists and descriptions of nearby attractions. If you are nearby any tourist locations, advertise this information. It will make your hotel look like a convenient place to stay for travelers.
Set up an email list. With a mailing list, you can let past guests know about deals and specials you’re offering. It is better to let guests sign up for this list, rather than just emailing everyone who has stayed. Otherwise, you risk annoying people and could actually drive repeat business away. Reward repeat business by offering special deals to past guests. There are many ways to do this. You could give guests discounts on their second stay, or offer one night free after a set minimum of nights. You could also put a point system in place so guests can accumulate points and get deals this way. Respond to customer feedback. Several travel sites allow hotels to respond to customer reviews. You should take advantage of this and answer both good and bad feedback. This will show guests that you’ve taken their opinions seriously and they may be more willing to return. It will also show potential guests that you’re committed to good customer service.
