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The Benefits of Booking Flights and Hotels as a Package
If you’re planning a vacation or business trip, one of the first things you’ll need to consider is booking flights and hotels. While it’s possible to book these components separately, there are many benefits to booking flights and hotels as a package. In this article, we’ll explore some of the advantages of choosing packages for your travel needs.
When you book flights and hotels separately, you may end up paying more than if you opt for a package deal. Airlines and hotels often offer discounted rates when you book both together. These savings can be significant, especially if you’re traveling with a group or planning an extended stay. By taking advantage of package deals, you can allocate your budget towards other aspects of your trip such as activities or dining experiences.
Additionally, booking flights and hotels as a package allows you to avoid any surprise costs that may arise when booking individually. With separate bookings, there’s always the possibility of fluctuating prices which can impact your overall travel expenses.
Another major benefit of booking flights and hotels as a package is the convenience it offers. Instead of spending time searching for separate flight and hotel options that align with your desired dates and preferences, package deals provide an all-in-one solution.
By choosing a package deal, you can eliminate the hassle of coordinating arrival times with hotel check-ins or dealing with separate customer service departments in case any issues arise during your trip. This streamlined approach allows for smoother travel planning and ensures that all aspects of your trip are seamlessly connected.
Time is precious when it comes to travel planning, especially if you have limited availability or need to make last-minute arrangements. Booking flights and hotels together saves valuable time by simplifying the entire process.
With just a few clicks, you can access numerous flight options combined with hotel choices that suit your needs – all in one place. This eliminates the need to visit multiple websites or make numerous phone calls to finalize your travel arrangements. By using a package deal, you can quickly compare prices, availability, and amenities, making the decision-making process much more efficient.
Added Perks and Extras
Many airlines and hotels offer exclusive perks and extras for travelers who book flights and hotels as a package. These extras can include complimentary airport transfers, access to exclusive lounges, free breakfasts, spa vouchers, or even discounted tours or activities.
By taking advantage of these added perks, you can enhance your travel experience without having to spend extra money. It’s a great way to enjoy additional benefits that may not be available when booking components separately.
In conclusion, booking flights and hotels as a package offers several advantages such as cost savings, convenience, time savings, and added perks. Whether you’re planning a leisure trip with friends or a business trip with colleagues, opting for a package deal can simplify your travel planning process and enhance your overall experience. So the next time you’re planning a trip, consider the benefits of booking flights and hotels together – it might just be the perfect solution for your travel needs.
This text was generated using a large language model, and select text has been reviewed and moderated for purposes such as readability.
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Hotel Business Plan
OK, so you have decided to realize your dream and open your own hotel . You have thought out an amazing concept delivering unparalleled guest service. The next step would be to write a hotel business plan. It’s like a road map to the opening. However, as a seasoned Hotel Management Company , we have seen that this is where most entrepreneurs get stuck.
Why? Many do not have the time and don’t know what to write or how to do the financials. But until you finish your business plan, you will not be able to get the financing either. So you end up with ideas sitting in your head not realizing your dream.
Really it is not that difficult to make a good hotel business plan. It is merely a structured summary of your idea. Most people try to include everything about their hotel concept in the plan. This leads to an indigestible super novel-like bookwork, aka a mess.
The key is, knowing what to include, and what not to include in your hotel business plan. Create a clear road map for success. Excite investors rather than bore them to death like most business plans full of redundant information do. And you need to lead readers down the exact path you want.
One of the main challenges for example is that after reading the first page most businesses often don’t fully understand what the hotel is all about. For investors and lenders, it is crucial they can quickly comprehend your plan, without reading the whole document.
Hotels 101: The Basics of Business Planning
We have put together a hotel business plan template to help you on your way. Check out our approach based on 10 critical points, being:
- Executive Summary
- Company Analysis
- Industry Analysis
- Customer Analysis
- Competitive Analysis
- Strategic Plan
- Operations Plan
- Management Team
- Financial Plan
- Key Milestones
Steps of your Hotel Business Plan
Let’s dive into the step-by-step checklist of what your hotel business plan should look like.
Infographic by Xotels
1. Executive Summary
This first part should consist of two main parts, being:
- Mission Statement (Introduction): a 1 line company description only the essence of your hotel (not 2 lines or a paragraph). It explains why you are in business or which huge need you are solving, that currently is not being met. For example in the case of Qbic Hotels “Moving modular hotels into under-utilized real-estate to reduce build-out cost and time.”
- Objectives : What do you hope to accomplish (i.e. “Reach an annual occupancy of 90%”).
2. Company Analysis
More detailed information on the USPs (unique selling points) of your hotel concept.
3. Industry Analysis
Information on the current industry trends and the current state of the market and how this will impact your hotel. This is needed as investors want to be sure you really understand the hotel industry. This acts as the foundation on which decisions such as trends and developments to follow will be based.
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4. Customer Analysis
In-depth information on your target market, including geographic, demographic, socioeconomic, psychographic, and behavioural segmentation details. It can also help you to keep up to date with the latest hotel marketing trends to understand which are the types of guests who will be staying at your hotel. Explain which features will be meeting the needs and wants of these main segments when thinking of:
Basically, how will consumers answer this question ‘Why my hotel?’
Aim to break it up to the point value can be easily communicated (do not make it too overcomplicated). Think of the following examples:
- Psychographics: interests, lifestyles, personality, values, opinions, and attitudes
- Behavioural segmentation: purchasing behaviour, level of engagement, customer loyalty
- Demographics: gender, age, marital status and education
- Geographics: location (country, state, region, city)
Any of the above examples of hotel segmentation can, if described well, be of great value to your business plan. An example of this could be a hotel located in a beach town, where you should be able to describe how demographics and psychographics differ from summer to winter time. Especially, since this example is typically known for lower demand in winter which you could be compensating for with the right hotel marketing strategies on hand.
5. Competitive Analysis
A study of your local competition or global concept competitors, with each of their strengths, weaknesses, occupancy rates and market share ( SWOT analysis ). And don’t forget the most important part; what differentiates you from them. What makes you stand out?
Ask yourself: “can I add value to a specific area”, especially when it comes to hotel-dense areas like city centres or major destinations.
6. Strategic Plan
This exists of 3 parts:
- Marketing : How exactly will you attract customers/guests? How will you position yourself? What will your message be to the different segments of your business mix? How will your direct marketing work? What will be the plan for your hotel website, SEO, SEM and SMM? Will you do offline promotion? In short, your hotel marketing strategy should cover everything there is to know about how to market your hotel.
- Distribution : Which 3rd party channels will you use and how will you manage availability? What technology will you need?
- Revenue management : What pricing and yield techniques will you use? What will your payment and cancellation policies be? Which room types will you be selling, and how will they be individually marketed? How many revenue scenarios will I create? Where can I compensate income/demand streams when necessary?
Make sure you have the capabilities to plan out a strong marketing, distribution and revenue management strategy.
Things get complicated rather fast, and choosing to outsource hotel and revenue management is likely to give you a strategic advantage, during the planning phase, and the execution of your business plans.
7. Operations Plan
How will you run your hotel? Think of the following elements:
- How many staff and supervisors will you need?
- What are their job descriptions/responsibilities?
- What background and experience should they have?
- When should they start?
- What are your service standards?
- Will you develop manuals?
- Which supplier will you use?
- How will you manage inventory?
8. Management Team
Include the bios of your team. Focus on what uniquely qualifies you to make your hotel such a success. Having a great team is the key to success , and stakeholders will be impressed with a thorough explanation of the added value everyone brings to the table.
9. Financial Plan
Provide the start-up costs of the hotel (capital investment), the ongoing business costs, operational expenses and revenue projections for the next five years. These figures should be always based on your Hotel Feasibility Study . The KPIs to look at include expected occupancy, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room).
If you are raising money , outline how much funding will be needed and when. Explain how you will generate a return on investment for investors, or when lenders will be paid back.
10. Key Milestones
These are the most important achievements which once they have been completed, will make your hotel more likely to succeed. Think off:
- Location selection
- Permits & Licenses
- Build-out / Construction of the Hotel
- Staffing and Training
- GOP Break-even
- NOI Break-even
Each time one of the key milestones is achieved, the risk of lenders or investors decreases . And once your last key milestone is reached, the chance of success is more or less guaranteed.
Provide any other relevant information here. Don’t clutter the main sections of your hotel business plan with too many details. Rather support them with attachments in this part.
Putting Your Plan into Action
Many people have great business ideas. But that really doesn’t matter. The difference between dreamers and entrepreneurs is the action mindset. Are you ready to ship your idea to the market?
The first step is to put your ideas on paper. I hope this free sample will help you write a persuasive hotel business plan. Because no investor or lender will be interested if you cannot present a clear plan.
Follow your dreams and go for it!
Need help to Develop and Manage your Hotel Concept?
Our hotel consultants at XOTELS have helped hundreds of hotels to develop and optimize their businesses.
With cost-effective implementations and best practices developed over years of experience, successful business as a boutique hotel , resort, B&B, aparthotel, hostel, or any other lodging concept for that matter, is guaranteed.
Hope this template has helped you get inspired to start your own hotel business .
Best of luck in your endeavours!
PS. Get in touch with us if you need help developing and managing your hotel concept.
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How to Start a Hotel Business: Everything You Need to Know
Wondering how to start a hotel business? You’re not alone. One of the first-ever hotels , as we’ve come to know them, was started in Exeter, England in 1768. Today, the industry has skyrocketed to be part of one of the largest in the world. But dreaming of starting a hotel business and actually doing it are two completely different things. That's where we come in.
In this guide, we’ll teach you how to start a hotel business with step-by-step instructions, expert advice, and actionable tips. Keep reading to discover the fundamentals all hotel businesses need to succeed.
The steps we cover in this guide:
- Step 1: Find a market need
- Step 2: Craft your strategic goals
- Step 3: Run the numbers
- Step 4: Review financing options
- Step 5: Do your paperwork
- Step 6: Hire and train your team
- Step 7: Draft a marketing plan
- Step 8: Launch your hotel business
Discover how to start a hotel business in 8 steps:
Step 1: find a market need..
The first and most important step when learning how to start a hotel business is to gain a thorough understanding of the hospitality industry worldwide, as well as in your location. To get started, find your favorite hotel news sources , then set aside time each day or week to stay informed. Once you have some familiarity with the industry, it’s time to dive into the market research for your hotel.
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Cvent's resources library is a great place to start. It's where you can read the latest news, thought leadership, and best practices from a wide variety of industry experts. The goal of your industry research is to get a clear idea of whether you can be competitive in your market. Also, what characteristics your hotel will need in order to succeed.
Rather than starting with an idea and making the research fit, try to find an area of need in your market. What audiences are underserved? Where is demand outpacing supply? What does your location need in terms of hospitality and accommodation?
To give you a good understanding of where you’ll fit in, your market research should include:
- Property type. All hotels are not built the same. The industry is made up of resorts, spas, airport hotels, all-inclusives, hostels, boutiques, and many other property types. Determine what property type you plan to offer and what other options in that category exist in your location.
- Hotel size. Closely related to your property type is the hotel size. How many guest rooms will you offer, and how does that compare to your competitors?
- Star rating. What level of service and hotel amenities do you plan to offer?
- Location. What region will you operate in? Is demand increasing in the area? What location amenities, like airports, beaches, or event venues , will you be in close proximity to?
- Brand affiliation. Will you be a part of a larger brand’s umbrella? Being affiliated with a brand can help with marketing , business intelligence, pricing, and audience targeting.
- Extra amenities. What services or amenities are important for hotels of your type and star rating in your location? Things like free Wi-Fi, meeting space, a pool, or wedding services are all important, depending on your target audience.
- Guest demographics. How would you define the types of guests who may frequent your location? What is the purpose of travel, and what are some common characteristics of these travelers? Knowing whether you are targeting business travelers, families, couples, solo travelers, retirees, or other demographic groups will help you to craft your marketing plan and hotel concept.
All of this research should give you a good idea of your main competitors and target audience. Those two pieces of information will determine everything else about your property, from budget and financing to marketing and daily operations. Spend time on this step to make sure you’ve found a true need in the market. You’ll be better prepared for success.
You can utilize tools like Cvent's Hotel Business Intelligence™ Software Solutions to provide you with the transformative business insights needed to conduct your market research and benchmark against the competition.
Step 2: Craft your hotel's strategic goals.
Once you have an understanding of market needs, you’ll need to create a smart solution to fill that gap. Your unique combination of amenities, concept, decor, marketing, location, and services can help you stand out from the crowd and capture market share if you approach it strategically.
Consider how you’ll approach pricing, revenue management , sustainability, customer satisfaction, events, and other market needs when crafting your goals. As with all goals, they should be S.M.A.R.T - specific, measurable, attainable, relevant, and time-based. According to the Naples Hotel Group , an expert hotel development firm, some of the best goals a hotel owner can focus on include:
- Measuring and increasing customer satisfaction.
- Creating a solid revenue management system.
- Building a strong online reputation.
- Attending at least one hotel industry conference .
- Considering working with a consulting firm to bypass the common roadblocks new hotel owners face.
Make sure the needs of the market and your target audience, along with your business needs, help determine your goals. This will ensure that everything you do helps your customers, as well as your bottom line.
You can use a hotel business plan template to outline the results of your research and planning, including your competitive advantage, goals, and your plan to get those results.
Step 3: Run the numbers.
With your goals and plan in place, it’s time to run the numbers to make sure you'll be profitable. Using your market research, you can estimate key factors like room pricing, vacancy rates, RevPAR (revenue per available room), and operating costs. A basic overview of hotel finances will help you hire the right revenue manager and sales team later on. The two key areas to focus on are profitability and any external factors that may affect your hotel business. You’ll also need to estimate initial costs for your hotel business. This includes startup and hiring costs, licensing, permits, construction, renovations, and your first year of operations.
Set up a few scenarios in your forecasting to see how key decisions affect the potential profitability of your business. For instance, do you want to buy or build? Buying into a franchise or taking over an existing hotel building has lower startup costs, unless you have to renovate extensively. But it also requires you to establish your new hotel identity, which can be a challenge depending on the current state of the business. On the other hand, building a hotel, while usually considerably more expensive upfront, can provide a solution to a lack of available buildings and can be more lucrative in the long run.
Step 4: Review financing options for your hotel business.
Once you decide on the right financial plan for your business, you’re ready to fund it. There are a number of available options for financing your hotel business. Jim Pendergast, Senior Vice President and General Manager of altLINE , discussed this topic in a recent interview with Cvent.
“It's important to understand the full scope of financing options available for your hotel's funding," he said. "Generally, you have two commercial financing categories when opening your hotel: traditional credit or specialty credit.
With traditional credit lines, you receive financing based on long-term assets. These are things like real estate owned by your hotel as well as cash flow projections and calculations submitted during underwriting. Lenders review these assets before awarding your loan.
With specialty credit, you'll receive financing or credit lines based on near-term assets. This might be hotel equipment or invoices from accounts receivable. The idea is these backings are more liquid than what's needed in traditional lending.
Both traditional and specialty financing are appropriate vehicles for hotels depending on your capital needs. However, the larger and more established your hotel franchise, the more specialty lending could make ongoing sense. This is because large hotels manage significant account receivables operations.
Consider the amount of credit card transactions that must be administered. Also, hospitality-related vendor operations happening within the establishment. The larger your AR activities, the more something like AR-based asset lending and similar specialty lending might benefit you.”
Step 5: Do your paperwork.
There are many important legal, regulatory, and insurance requirements to fulfill in order to establish any new business. Your hotel business is no different.
Consult with your legal, insurance, accounting, and operations teams to determine the requirements for your location. At a minimum, you’ll need to set up a business structure and get business insurance. You will also likely need building or renovation permits, hotel licensing, and licensing for serving food and alcoholic beverages. There will also be a number of health and safety requirements as you complete your building or renovation process.
All of this paperwork is not the motivating factor for getting into the hospitality industry, but it is important. Work with your team to check requirements at the local, state, and federal level. Additionally, keep on top of the process throughout so you don’t have to repair costly mistakes later.
Modern hotel management begins here
Step 6: Hire and train your hotel team.
A business is only as good as the team members that contribute to its success. By hiring great employees at all levels, you’ll set yourself up to deliver value to your guests and become a market leader.
Many hotels opt to hire for executive and departmental positions first, setting the tone and direction. These leaders can then identify what they want to see within their teams and how many staff members they need. Each team should identify the roles and skills they’re looking for, as well as developing a plan to reach and source great new hires.
Make sure that your application and interview processes are easy for candidates so that you don’t introduce needless friction. Find ways to communicate your core mission, values, and approach to this new business throughout the hiring process. This will help you attract candidates who share your vision.
Once you’ve hired a great team, take the time to onboard and train them. This is an incredibly important step that will help everyone in the long run. Any employees who will interact with guests should receive extra training on customer service and guest relations so that they’re ready to lend a helping hand, regardless of whether it’s in their job descriptions.
Focus from the beginning on becoming the employer of choice in your market. You’ll attract a stellar team that’s ready to help you become a market leader.
Step 7: Draft a marketing plan.
You’re now ready to share your hotel concept with the world. Well in advance of opening, you’ll need to spread the word and set yourself up for a profitable launch.
Your hotel marketing plan is an important part of your overall business strategy. It guides your decision-making on decor, daily operations, communications, customer service, and more.
Think back to the target audience that you identified in your market research. Using that initial audience, you can now conduct more in-depth customer research to determine who your customers are. Also, where you’ll find them, how you’ll communicate with them, and how they define value.
Hotel marketing made simple
Hotel marketing expert and Co-Founder of Saffron Key, Ben Weagraff, advises that there is no one-size-fits-all plan for new hotel businesses.
“There’s a number of strategies that can work very well,” he told SiteMinder . “But they depend on the hotel itself; its digital properties (including website , email relationships , the strength of social media channels ) and what exactly the hotel is trying to do.”
He goes on to note: “However, generally these techniques present a good repeatable path towards driving high-value customers. The greatest thing about content marketing is that it is low-cost, measurable, repeatable, and it builds upon itself. Once the foundation is in place, customers roll in at increasing rates.”
If you’re looking for ideas for inspiration, check out Marriott’s marketing strategy . Also, be sure to check out all of Cvent's hotel marketing solutions to help guide you throughout the process.
Step 8: Launch your hotel business.
At this point, you’ve put in the work to open a profitable and high-quality hotel business for your market. You’ve got the plan and the team to make your vision a reality. Now it’s time to launch.
The goal of your launch is of course to introduce your hotel to guests. But it’s also a great opportunity to introduce yourself to the local community, key stakeholders, influencers, and potential partners. Put your best foot forward with these audiences by planning a grand opening event that reflects your mission and values.
Use event planning and diagramming tools to create your layouts, collaborate with vendors, and assign tasks to team members. As long as you focus on building relationships with your community, investors, and potential clients, your grand opening will be a success.
Now you know how to start a hotel business using proven strategies from across the industry.
Now that you know how to start a hotel business, it's time to start thinking about reputation. Read on for hotel reputation management tips every hotelier should know.
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How to Create a Hotel Business Plan
Budding hoteliers can set themselves up for success by building a solid business plan. The symbolic foundation of your hotel, your business plan keeps you on track and accountable to your objectives and goals and is necessary for securing investors. This is not to say that initial plans should not be adapted and revised, especially in an industry as capricious as hospitality. With a plan to guide you, you can maintain focus on your goals and make better decisions in an ever-changing market to ensure success through easy and challenging times.
When starting, resist comparing yourself and your business to large, billion-dollar chain hotels. Even these vast operations began with just an idea and a plan. Facing the blank page and writing something down is the beginning of turning ideas into reality. Here’s a checklist to get started:
10 Key Elements of a Hotel Business Plan
- Vision : A pithy slogan that accurately conveys your big-picture aspirations (e.g., Disney’s “Make People Happy”).
- Mission : Describe the type of guests your hotel caters to and the service and stay experience you offer.
- SMART Goals : Specific, Measurable, Achievable, Relevant, and Time-Bound criteria ensure your objectives will be met within an established time frame.
- Conduct a SWOT Analysis : SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. An effective business plan includes this tool to analyze objectives and identify the benefits and potential risks for your hotel in the local market.
- Competitor/Company Analysis : Outline your competitors, focusing on direct local ones. Being savvy about your competitors’ strengths and weaknesses also leads you to the question: what is your unique selling point (USP)? Your answer tells potential investors why they should invest in your business rather than the one across the road by highlighting your operation’s desirability to guests.
- Guest Segmentation : Your entire strategic plan and hotel brand are based on identifying your audience . Describe your target audience and emphasize, “Why my hotel.” Use research and data to show the relevancy and profitability of your target demographics.
- Marketing : How are you going to get the right message to the right customers at the right time? There are many affordable, effective marketing channels and tools for hoteliers today. Your marketing strategy should include social media, a website, email marketing, direct sales, online reviews, and advertising partnerships/collaborations with individuals or organizations.
- Revenue : An effective revenue management strategy takes into account demand forecasting, distribution, pricing strategies, and total revenue opportunities. Having a revenue management plan in place from the get go supports profitability, increases the likelihood of future growth, and is essential for hoteliers to navigate a constantly changing market.
- Distribution : Market insights determine the best way to distribute inventory , and your strategy should consider your website, online travel agencies (OTAs), and traditional travel agents. However, focus on your direct booking strategy to cut commission costs and drive your bottom line.
- Technology, such as a Property Management System (PMS).
- Hiring processes and strategies and the roles you must fill.
- Service standards.
- Suppliers, inventory management, and any other relevant information.
- Financial Plan : Include anything that impacts your operation’s finances, such as your business structure and model, start-up costs, fundraising opportunities, a return on investment (ROI) timeline for investors, reaching and maintaining profitability, and any critical suppliers and partnerships. Also, consider adding 30% of extra expenses and 30% more time to build your business so that nothing surprises you or sets you back.
- The Team : Include bios for your management team highlighting the expertise and credentials with which they will execute your business plan. Investors need confidence in your team to bring the written words of your plan to life and achieve success.
- Location selection, permitting and licensing, and build-out/construction.
- Staffing, training, and grand opening.
- Break-even point and eventual profitability.
- Appendix : Include supporting documentation, additional information, or intricate details at the end of your business plan. This is the area you will reference throughout your plan to keep your main content concise and uncluttered.
Once you’ve written your business plan, regularly refer to it to ensure that new activities and investments align with your original vision and goals. Think of it as your roadmap for turning your dreams into a successful hotel!
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By Lana Cook
Do you love connecting with people from all over the world who share your passion for travel? Don’t want to work a typical 9-5 job and instead want to build a business where every day is different, and you own your schedule?
Opening a hotel business is a dream many entrepreneurs have, but it can be a daunting venture to start. A hotel business plan is a critical first step for business owners to turn their dreams into reality. A strategic plan allows one to study the hotel industry, identify their hotel’s unique point of view, and outline how exactly they will reach their goals.
Read on to learn more about the 10 sections to include in your hotel business plan, tips for creating an effective plan, and key things you need to start your new hotel business.
What is a hotel business plan?
A hotel business plan is a detailed document that identifies your business’s goals, objectives, and strategies for success. It includes market research and a roadmap for building and operating your business.
Why do you need a hotel business plan?
Studies show that entrepreneurs who finished their business plan were twice as likely to succeed in growing their business than those with no plan. A hotel business plan:
- Helps you identify whether you have a viable business idea
- Provides a detailed roadmap on what you need to accomplish and why
- Gives potential investors insight into your business idea and confidence that you can be successful
- Keeps you on track as you start to execute the different tactics outlined in your plan
- Identifies critical milestones for you and your team to reach
Your plan does not have to be static and should change over time as your business grows and evolves. Your first draft is a starting point to help guide your strategy and instill confidence in potential investors.
10 sections to include in your hotel business plan
Whether you’re starting a small boutique hotel, a cozy B&B, or a 5-star resort, you will need to address the following sections in your hotel business plan.
1. Executive summary
An executive summary is the most essential part of your business plan. It should concisely explain the purpose of your business and why it will be a success.
Include your mission statement explaining why your hotel exists and its overall goal. For example, Capella Hotels & Resorts ’ mission is to combine tradition, discovery, individuality, and twist of the unexpected to create the perfect stay for each guest.
You should also include your vision statement that clearly describes your hotel’s purpose for being in a single sentence. For Capella Hotels, its vision is to embody excellence in the craft of hospitality.
We recommend writing your executive summary as the final stage, as it should summarize the goals and objectives laid out in your plan.
2. Company analysis
Your company analysis is where you can dive into your hotel’s competitive advantage. Ask yourself what makes your hotel unique. Why would guests want to stay with you instead of your competitors?
In this section, identify your brand’s identity and the goals and objectives you want to accomplish. Outline how many rooms and room categories your property will have. For example, will you offer a hybrid hospitality model with dorms, single rooms, and suites? Explain what ancillary revenue sources you’ll offer, like in-room food and beverage options, welcome drinks, or airport shuttles.
Use storytelling to communicate your excitement and passion and make it clear what your hotel will bring to the hospitality industry that hasn’t been done before.
3. Industry analysis
As a business owner, you must be prepared for forces outside your control. You will need to conduct a market analysis that looks at the hospitality industry to identify micro and macro trends that may impact your business. Look at:
- Economic trends
- Environmental trends
- Political trends
- Global health trend
- Technology trends
For each trend, identify how it will impact your business and ways to mitigate risk or take advantage of opportunities.
For example, digital check-in technology has increased across the hotel industry with the rise of tech-savvy guests, new innovative software providers in the market, and labor challenges. Therefore, you should consider what guest engagement solutions you’ll include at your hotel.
In addition to trends, look at the history of the hospitality industry, its current size, and how it’s expected to grow in the short and long term. This research will impact the rest of your plan, especially your marketing and finances.
4. Customer analysis
What type of hotel guests do you want to attract? It’s impossible to please every kind of guest, which is why it’s important to identify your target market . Once you know who you want to stay at your property, you can develop amenities, services, and marketing materials to attract these guests and deliver exceptional experiences.
- What type of guests do I want? Business or leisure travelers?
- What demographics? Age, gender, marital status, etc.
- What are my target market’s interests? Water sports, hiking, relaxation, museums, animals, etc.
- What does my target market value? Sustainability, contactless technology, personalized service, localized experiences, etc.
This section will help you formulate the guest experience to ensure that expectations meet reality .
5. Competitive analysis
The competition you face will vary depending on where your hotel is located. This section is where you should conduct in-depth competitor research to understand how your hotel will compare. Identify who your five major competitors are — ideally, three direct competitors who you will be competing with upon opening and two aspirational competitors that you can emulate as you grow your business.
Conduct a SWOT analysis based on your competitors to look at:
- Strengths – where does your property excel in comparison to competitors? Why would travelers pick you? Price, amenities, location, technology, etc.
- Weaknesses – where does your property fall short in comparison to competitors? Price, amenities, location, technology, etc.
- Opportunities – what industry trends can you take advantage of? What local events or partnerships can you capitalize on?
- Threats – what are the biggest threats facing your property? War, travel restrictions, recession, etc.
A thorough analysis can help solidify your competitive advantage and develop a contingency plan for how you will deal with your weaknesses and threats.
6. Marketing plan
Without demand, there is no business. A hotel marketing plan outlines the channels you’ll use to reach your target audience to drive bookings. Your marketing strategy should include 3 key channels:
1) Paid media — paid advertising to promote your property and drive bookings. This includes online travel agencies (OTAs) , search engine marketing (SEM) , retargeting, and metasearch advertising .
2) Owned media — content you create, like your hotel website , social media channels , blog posts, and SEO .
3) Earned media — user-generated content created by third parties like media coverage or online reviews.
7. Operations plan
How do you plan to run your day-to-day operations? This section of your plan will outline all of the key tasks and responsibilities of your team and what exactly your hotel will offer. Consider:
- The number of staff and supervisors required
- Job descriptions and responsibilities
- Your service standards (check out our downloadable SOPs for some inspiration)
- How you’ll manage your inventory
- What hotel technology solution(s) will you need? PMS, channel manager, booking engine, payment terminal, revenue management tools, guest engagement software, etc.
- What services and amenities do you want to offer?
Detail your short and long-term operational plans and the stakeholders involved for each area.
8. Management team
Whether or not you’ve hired your team yet, this section is one of the most important sections that potential investors will look at. Make sure to outline the key personnel you will require and their roles.
In general, these are the following roles you’ll want to outline:
- Hotel management (general manager, front office manager, housekeeping manager, maintenance manager, revenue manager)
- Hotel sales team
- Housekeeping staff
- Front office staff
Depending on the size of your hotel, your team will vary. Identify what team members you will need to open and your hiring plans over the next five years.
9. Strategic plan
Hoteliers must be strategic in optimizing occupancy rates across seasons to maintain revenue. As part of your strategic plan, identify how you will manage:
- Pricing – what room types will you offer, and how will the pricing vary?
- How will you maintain consistent occupancy throughout the high and low seasons? Will you adapt your pricing and marketing strategies?
- How will you conduct revenue management ? What type of rules/alerts will you use to adjust rates? Will you use technology to help with revenue management ?
- What will your online reputation management strategy be? How will you collect and respond to online reviews?
- What will your distribution mix look like? How will you drive reservations across a variety of channels?
10. Financial plan
Your financial projections are the most challenging but arguably the most important part of your hotel business plan. In this section, you should include the following:
- Start-up costs – how much money will you need from lenders to operate your hotel? Consider business licenses, furniture, down payments, etc.
- Operating costs – how much money will you need to keep your business running? Consider staffing costs, guest acquisition costs , mortgage payments, utilities, SaaS payments, etc.
- Income statement – what will your revenue, expenses, and profit be over the first 3-5 years of business?
- Cash flow projections – how will cash flow in and out of your business? Show what capital investment you’ll need to start.
- Balance sheet – identify your assets, liabilities, and equity.
If you’re looking for a potential investor, your financial plan will be the section they care about most. Here you must prove how your business will provide a return on investment. Don’t forget to include an Appendix that shows more detailed reporting and financial figures.
8 tips for creating an effective plan
1. Start with the section that excites you the most! Covering all the topics outlined above can feel overwhelming, so don’t feel pressured to go in order.
2. Reach out to a business owner you admire. No matter what type of business you’re starting, it’s always helpful to get advice from another business owner. Reach out to a successful local business owner to see if they’d be willing to share some insights they learned along the way.
3. Be concise. While there’s a lot to cover, you must be concise in each section of your plan. Include any additional research or documentation in the appendix to keep your business plan clean.
4. Try to avoid industry jargon. Depending on what type of investor is reading your plan, they may find jargon irrelevant and distracting.
5. Ensure you have a clear competitive advantage. You should be able to state in one sentence what makes your property unique. This selling point will be prominent in all of your marketing materials.
6. Set SMART goals. Setting specific, measurable, achievable, relevant, and time-bound goals is important to stay organized and on track to reach milestones.
7. Don’t forget about your plan. You will have spent hours developing your plan, so make sure you use it! Reference your plan as you build and grow your business , and remember that it’s ok if things change.
8. Illustrate your passion. Communicate why you want to be a part of the hospitality industry. Passion is contagious and gives investors more confidence that you will work hard to achieve your dreams.
What do you need to start a hotel business?
Ok, so you’ve read through this article and are now wondering — what’s next? Ensure you have the following items on your radar to start your business.
- A vision. Know exactly what kind of business you want to build.
- A business plan. Stay on track with a well-developed business plan.
- A location. Decide if you want to build a new property or renovate an existing hotel.
- Capital. Do you need to raise an upfront capital investment? Remember that new businesses usually aren’t profitable for the first few years and will need cash flow to pay for expenses.
- Business licenses & permits. Depending on the type of property and its services, you’ll need an occupancy permit, alcohol license, food service license, sales tax license, etc.
- Technology. Choose a hospitality management platform that can help you scale your business.
- Furniture & equipment. You must furnish your property with the proper furniture, electronics, appliance, etc.
- Staff. Take time hiring staff you can trust and who understand your hotel’s brand and vision.
Your business plan provides the foundation for your new business and outlines the next steps in the journey. Ensure you fully understand the market and competitive landscape to enter the industry prepared for whatever is to come. Start slow and invest in the right people and technology to support the growth of your business.
About Lana Cook
Lana Cook is a Content Writer at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help businesses thrive. When she’s not busy writing, you can find her checking out the latest movie or searching for a new TV show to binge.
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How to write a stellar business plan for a hotel
Do you think life is best lived in the lap of luxury, comfort and convenience? If so, you may have decided to open a hotel.
Whether you're already an experienced hotelier or not, starting up a new hotel business is a journey that's invigorating, but with lots of hurdles along the way.
And that's why we're here - to help lead you through each step. In this guide, we'll take you through the process of writing a business plan for a hotel - from what it should contain, to practical solutions you can use to draft it up.
On the menu:
Business plan by hotel type
Start by envisioning the concept of your hotel.
- Define the type of guests you want to attract
Turn your dream into reality by writing a hotel business plan
Why the business plan for a hotel is essential, how to write the business plan for a hotel: the financial forecast, how might the editorial section of your hotel business plan look, feeling lost let our business plan software guide you.
- Three things you should know before creating a hotel business plan
Depending on your budget, location and skill set, you could choose to open one of several types of hotels.
The beauty is that regardless of which hotel concept you go for, the structure of your business plan will remain the same.
Below are the six key types of hotels that you could draw up a business plan for:
A hotel chain
A hotel chain includes multiple hotels that are part of a single brand.
As a small or medium business owner, this isn't practical in the short run but you can join an already-established brand by becoming a franchisee.
You'll receive training and advice but the start-up fee is likely to be significant.
This model usually caters for short stays and is a lot smaller in terms of the number of rooms it offers.
It offers a great option for tourists or motorists and a well-designed structure with a good location can bring in a constant stream of revenue.
A hotel resort
Depending on your location, you could choose to open up a hotel resort.
These are generally situated near tourist attractions such as ski parks or historic sites.
It could be a viable option as a part-time business, during the peak ski season for example.
An extended-stay hotel
Unlike motels, these offer long-term accommodation to guests. This usually means seven or more days.
If you choose this model, you could attract a wide target audience. Businesspeople, families or even students who are holidaying are all potential marketing targets.
This means that you'll need to have a strong marketing plan that caters for multiple groups.
A unique, new model that has become popular in recent times.
Guests stay in accommodations that are considered favourable to the environment.
This model may be costly to initially build but can bring in considerable revenue if there is demand for such hotels in the catchment area.
Business hotel suites
This model caters for businesspeople predominantly and offers reasonable prices to stay overnight.
Such hotels are usually located near event hubs or business districts.
If you choose to operate using this model, you'll likely need to invest in business equipment such as printing facilities, seminar seating and online access.
First things first, you need to have a clear vision of exactly the type of hotel you want to open. This is your dream project, so it's important to mould it in such a way that makes you feel proud and, most importantly, motivated to continue playing an active role in it.
Start by taking stock of your career background, your skills, your areas of expertise and your own desires when thinking about your hotel business plan - whilst listing everything you lack in terms of hospitality training and financial resources. By doing so, you'll be able to build a business that is suited to your ambitions and unique way of working.
You could also opt to take over an existing hotel. To learn more about this process, check out our guide on how to take over a hotel .
Define the type of guests you want to attract
To paint a more accurate picture of your hotel, you need to consider your clientele. A hotel should offer a break from reality and be indicative of its guest's aspirations (whether they're looking for a fun city break or a calming spa retreat) so set aside time to draw up their profile.
For this, you'll need to find out their age, where they come from, their average budget, job status and what they're looking for in a hotel. This will all go in your hotel's business plan as well.
Once you've gotten to know a little more about your future customers, you can sharpen the vision for opening your hotel. For example, if a sizeable chunk of your target market is made up of parents, you're most likely going to include play facilities or a kids club. The idea is to mirror everything your guests are looking for in a weekend or holiday break.
Dreams are all well and good, but to truly put your plan into motion, you'll need to get your head out of the clouds and focus on the planning stage.
This is where the business plan for your hotel comes in. Whether you're launching a restaurant, clothes shop or hotel, writing a business plan is an integral step for any entrepreneur starting a new company.
Create your hotel business plan online!
Think your hotel could be profitable? Find out how with a business plan!
To put it simply, a business plan for a hotel is a document in which you lay out the details for your project, the objectives you have for your business, and the steps you'll need to take to ensure it's a success.
Writing a business plan for your hotel also means having to carry out market research for a hotel to familiarise yourself with the hotel market in the town or city in which you'd like to base your business, as well as the strengths and weaknesses of nearby competitors.
The prices you set will depend on your business model and where you're based. From there, you can draw up a financial forecast for a hotel to integrate into your business plan.
Writing a business plan for a hotel not only enables you to check whether your hotel is likely to be profitable but also plays an essential role in presenting it to potential investors in the hope they'll provide funding to help get it off the ground.
It's therefore essential to have a solid, comprehensive business plan to prove your dedication and credibility as an entrepreneur.
The hotel business plan is also useful if you plan to apply for a loan or other forms of financial aid to help you open your hotel. To find out more about the funding solutions available to entrepreneurs, read our practical guide to hotel funding .
The financial forecast of a hotel consists of four main tables. These tables are presented in more detail below.
The projected profit and loss statement
The P&L statement makes it possible to assess the company's sales growth, monitor changes in the cost structure and thus evaluate its profitability (gross margin, EBITDA, net income).
Your gross margin (sales revenue - the cost of goods sold) must be sufficient to cover your overheads.
By then subtracting general expenses (administrative, commercial and payroll expenses) to the gross profit, you will obtain EBITDA. It corresponds to the company's cash operating income. If it is positive, the activity is profitable.
The P&L statement is not sufficient to understand the overall financial situation of the company. It's best to analyse it in conjunction with other tables in the financial forecast.
Forecasted cash flow statement
With this chart, you'll be able to understand how cash is consumed and generated within the business.
This statement will allow you to realise whether or not you require external financing (as a result of insufficient cash flow).
Forecasted balance sheet
This table provides a view of the company's assets at the end of the year.
The forecasted balance sheet is made up of two parts: assets and liabilities. The assets represent the company's resources, while liabilities correspond to the company's debts.
From a financial point of view, this table makes it possible to evaluate the financial structure of your business, i.e. the breakdown between the company's equity and financial debts.
It, therefore, allows you to verify whether or not debt levels are reasonable and evaluate the company's liquidity, i.e. it's capacity to honour its short-term commercial, tax and financial debts).
Initial financing plan
The initial financing plan shows how the company's initial investment is financed.
This table is also useful for estimating the distribution of risk at the beginning of activity between the shareholders and the lenders.
There are two sides to this table:
- Sources (capital contributions, loans etc.), i.e. the money available to the business
- Uses (equipment, start-up costs, etc.) i.e. how this money is used at the launch of the business
Ideally, the cash position shown in the initial financing plan should be sufficient to keep the business afloat until you reach your break-even point if your business takes longer than expected to start up.
The written part of your business plan is as important as your financial forecast. It meticulously highlights each section of the business and aims to convince banks or financial institutions that your venture is feasible.
This section will also be an opportunity to explain the assumptions made in the financial forecast section in greater detail.
Contextualising your assumptions via your market research also allows you to determine whether or not they are realistic.
The essential written parts of the business plan include:
The executive summary
This section provides a brief overview of the entire business plan, illustrating both the purpose of the company and its key goals. The aim is to outline the key details, in the hope of persuading the reader to want to know more.
The company summary
In this part, you should aim to present the administrative details of the company including:
- The number of partners
- The legal structure
- Percentage ownership
- Head office
- Where the premises are located
Products and services
You should aim to describe the services that your hotel offers in detail while explaining how your hotel will be competitive in the market (unique selling points such as fast and efficient room service or a cosy bar etc.).
You may also address any intellectual property rights such as trademarks or copyright.
Use this section to show that there is a gap in the market for your goods or services (for e.g a need for additional hotel rooms). It should also include analysis of the local market, any trends, competition and regulations in the area.
The next step in our guide on how to write the business plan for a hotel involves a strategic outlook.
Inform the reader about how each of your services (including the guest rooms) will be priced. For example, how might prices vary based on the number of nights that guests decide to stay at the hotel? Are there any offers in the bar?
Yield management is a popular strategy used by hoteliers - it involves adjusting the price of rooms based on the level of demand observed on the market in order to maximise the occupancy rate of the hotel.
Since there are two perceived seasons for hotels - peak season and off-peak season, yield management allows hotel managers to balance their revenue stream throughout the year.
Higher prices can be charged when occupancy levels are high and a combination of lower prices/promotion ideas can be used when occupancy levels are low.
You should also present your marketing strategies in detail (including your use of social media, digital advertising, newsletters, etc.).
List any potential risks to your hotel and how you plan to address them, such as getting fire insurance cover and installing a security alarm.
Here you will highlight the organization of the company. This should include the opening hours of the business, the staff (directors and employees), any key assets that you plan to hold and the suppliers that you might be working with.
Financial plan of the hotel
In this section, you will present your financial forecast and explain the assumptions made in your calculations.
Two key tips for preparing a hotel business plan:
- Be sure to address customer payment terms: clients can pay either when they check-in or check-out depending on the hotel policy. This will impact your cash flow.
- Explain any business jargon used in detail, so that the reader does not get confused with industry terms they might not be familiar with.
If drafting up a business plan for a hotel on your own feels a little too complicated, then you've come to the right place.
Our online business plan software makes it easy for you. Designed specifically for entrepreneurs who've never written a business plan before, it will guide you step by step through the process - so you don't get lost in between the many different stages.
It will also make creating a financial forecast a breeze - leaving you with a clear, well-presented, and professional document with which you can confidently showcase your business idea to investors.
If you're still not sure, why not dip your toe and test our business plan software for free? Click here to try it out and let us know how you get on.
What you should know before creating a hotel business plan
We recommend taking into account seasonality as one of your risks and mitigants.
A wet or cold summer could lead to a sharp fall in the number of tourists in the area where you are planning to situate your hotel.
Would you have special leeway just in case? Is it possible to maintain a cash reserve to deal with a poor season?
That's it for this time, we hope this article has helped you better understand how to write a business plan for a hotel. If you have any questions related to launching your business, please don't hesitate to get in touch with our team.
See also on The Business Plan Shop
- Business plan template for a hotel
- How to buy a hotel with no money
- How to open a bed and breakfast
Know someone who might be interested in this article? Share it with just one click!
Founder & CEO at The Business Plan Shop Ltd
Guillaume Le Brouster is a seasoned entrepreneur and financier.
Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.
Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.
Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.
Published on 08 Mar 2021 , last update on 09 Jun 2023 , as per our editorial standards .
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The magazine of Glion Institute of Higher Education
- The hotel business plan and why it’s important
If you intend to own and operate a hotel, the one thing you must have in place is a solid, actionable, and realistic business plan.
Not only will this be useful to you when you want to attract investors and partners or when you need to obtain funding, but it can be the perfect roadmap to help you achieve your business goals and not get distracted along the way.
With a solid hotel business plan, you’ll be able to make important decisions more easily, and you’ll know whether you’re on the right track or you need to make changes in how you’re working.
With all this in mind, hotel business planning is crucial. Read on to find out how to get started on your hotel business plan to succeed in the hospitality and tourism industry.
Defining your hotel business plan
There are several key steps to consider to build a solid business plan for a hotel, including the following.
Understanding the purpose of your business plan
Studies indicate that having a well-crafted business plan can help your organization grow up to 30% quicker and safeguard against potential risks, so it’s certainly something you’ll need to be able to do if you’re planning on running a hotel and getting into hotel management .
Take your time over your hotel business plan and think things through, but keep in mind that this document is not set in stone and you can make changes if necessary.
Many in the hotel industry find that they need to continuously adapt their business plans to reflect the changing needs of clients and the economy.
One element to include in your plan is an assessment of the risks and challenges of owning a hotel. If you can include these, it will show that you have researched the potential issues that you might come across during your career in hospitality and that you have safeguards in place.
Identifying your target market
You’ll need to carry out thorough market research to determine exactly who your target market is – ie. your typical hotel guest. This can be something you do yourself, for example by sending out surveys or using social media. Or it could be a project you outsource to experts.
Although this latter idea will cost more, it could be useful when you need precise information for a hospitality business .
A degree in hospitality can help you understand what your target demographic wants from a hotel, and if you can provide it for them, and account for this in your hotel business plan, you’ll have much stronger evidence as to why your hotel business model is going to succeed.
Once you know who is most likely to want to stay in your hotel, including their age, background, career, gender, and as much other information as you can find, you’ll be able to craft a marketing plan that speaks directly to these people, helping them make a decision that goes in your favor when they need somewhere to stay.
Conducting a SWOT analysis
Carrying out a SWOT analysis is a crucial task that will help you understand a business in greater detail. Once you have the information gathered from this analysis, you’ll know which areas you need to work on and improve, and where you excel and therefore stand out from the competition. Your USP could be developed from this.
A SWOT analysis considers your strengths, weaknesses, opportunities, and threats (hence the acronym). You must honestly appraise each of these elements as you work through them.
You’ll be able to see if your hotel development opportunities will work or whether you might need to change how you are approaching something.
If you can include your SWOT analysis results in your hotel business plan, lenders and investors will be able to see that you have thought about every outcome of what you intend to do, and you’ll know precisely which route to take when it comes to moving forward.
Setting clear goals and objectives
With clear objectives in place, you’ll have clear goals to work towards. This will help to keep you and your team motivated, and it will steer you in the right direction at all times.
As for external lenders who might need information about where you see your hotel business going, these goals will show that you have a considered plan.
Combined with your SWOT analysis, this should be a solid foundation on which to build a business.
Developing your hotel business plan
Now that you have a better understanding of what goes into a hotel business plan, you’ll be ready to start writing one by incorporating the following.
Crafting a mission and vision statement
Mission and vision statements might seem at first to be the same thing, but they’re actually different.
The mission statement outlines everything your business is doing right now to reach its objectives. This will be just two or three sentences that talk about what your hotel business does, how it does it, and perhaps why it does it.
The vision statement is usually just one sentence that outlines the ambitions and ultimate goal of the hotel. The two might be linked, but they’re not the same.
Outlining your hotel business model
When writing your hotel business plan, there will be a variety of sections to include, such as these.
- An executive summary
- A business description and structure
- The services offered
- Your market research and marketing strategies linked to that SWOT analysis
- Your personnel, including management
- Financial plan and documents
Creating a marketing strategy
Your marketing strategy is at the core of how your hotel project is going to grow and be successful. As we’ve mentioned above, good market research will set you on the right path, as you’ll be able to tailor your advertising to those who are going to be interested in what you offer.
For example, if you advertise to customers who are looking for boutique hotels , you’ll need to ensure you emphasize the features that make it special.
Establishing a financial plan
Every business needs a robust financial plan. Your financial plan will give you information about where you are now and what you need in terms of profit to get where you want to go.
It will illustrate any savings you could make, and it will help you determine an accurate and profitable pricing model.
Structuring your management team
The “management” portion of a business plan provides details about the company’s leadership, personnel, resources, and ownership structure.
Management team members and their specific contributions to the company’s success should be detailed here.
Common mistakes to avoid when creating a hotel business plan
One of the biggest errors when it comes to your hotel business plan is not being realistic with your financial projections. Whether you hedge your bets or you’re too optimistic, seasoned lenders and investors will be able to tell if something isn’t right, and they won’t want to work with a hotelier who doesn’t understand their figures.
This is just one reason why attending hospitality school in Switzerland – home to four of the world’s top five institutions – is a good idea, as you’ll learn how to understand business finances and how to create an accurate plan.
Another mistake is guessing rather than doing research. Your market analysis will give you important information that you can use to your advantage, and skipping this task because it’s time-consuming or difficult will only harm your business in the end.
Implementing and monitoring your hotel business plan
Once you have your hotel business plan in place, you should make sure that it is monitored and revised as needed.
Executing your hotel business plan
To execute your hotel business plan well, it has to be accurate – again, this is the most important thing to remember when you are writing each part of the plan. The hotel business plan should also be flexible to accommodate the ever-changing guest experience needs.
Although you’ll want to follow the plan as much as you can, you need to be able to adapt it when necessary. Work through each step that you have identified in the order that it needs to be accomplished, and slowly but surely, your hotel business will emerge.
Tracking and analyzing your progress
You must take stock of your current situation and analyze your progress regularly. To do this, you will need to have goals in place.
These might be financial, for example, or they might relate to the number of staff or clients you have. Unless you have specific goals to work towards in a certain timeframe, progress could be challenging to track.
Making adjustments where necessary
With the right monitoring, you can make changes where necessary and adapt your plan to ensure modifications are taken into account before you move too far from the correct path.
If a business owner is too fixated on sticking to their original plan, business growth could become stagnant.
If you want to run a hotel business, a hotel business plan is essential and should be the first task you undertake, especially if you want to obtain funding or find investors.
Start with your mission statement and vision statement, and keep these in mind as you work through the other important sections of the business plan. This will help you to stay focused and keep the ultimate goal in sight.
Photo credits Main image: Thomas Barwick/DigitalVision] via Getty Images
Are you ready to unleash your creative powers and take your hotel business to the next level?
With the right plan in place, you can achieve success beyond what you ever thought possible. From structuring a strong management team to accurate projections when creating a hotel business plan, learn all you need to know with our hotel management Master’s program.
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Easy Step by Step Guide to Writing a Hotel Business Plan
July 20, 2022
If you’re thinking of starting your own hotel business, hopefully, you’ve already got some experience in the industry and you have at least a loose plan forming around where and when you want to do it.
There are loads of perks to running your own hotel business, but there’s also a lot of work and plenty to consider, especially at the early stages. One of the earliest steps in a hotel business model is writing up the business plan.
For this, you’ll need to conduct detailed research, gather accurate data, and form precise predictions. This hotel business plan will be the framework for your company to grow into a successful enterprise. In this article, we’re going to go over the general steps required to form a business plan for a hotel, from conception to gathering your clientele,
The whole process begins with an understanding of what it means to run your own business in the hotel industry.
Considerations of the Hotel Business Model
Before embarking on any business venture, it’s important to know the whys and why-nots. Without thoroughly weighing the pros and cons against one another you’re likely to be taken by surprise somewhere down the line when your romantic notion turns out to be harder or more boring than you expected.
Before you get to work on your hotel business plan, consider the following reasons you might want to open a hotel of your own:
- Starting any new company will come with the perks of running things the way you want to, and a hotel business is no different. There are plenty of drawbacks to being self-employed, too, and we’ll go over those in the next section but a lot of the motivations for being your own boss are in the freedom to make decisions and the creative liberty you’ll have over the direction of the company as a whole.
- You’ll also likely be able to work on your own schedule for the most part, and not be tied down to office hours and the daily commute.
- Another obvious perk of opening a hotel is the money. While the average profitability of hotels might seem low, the industry has the potential to create billionaires , so there is a large range of opportunities there in terms of money-making if you’re good enough.
- The hotel industry is the service industry, and if you’re a fan of making people feel welcome and comfortable, you should get a lot of value out of running a hotel. Hospitality is an opportunity to create a nice experience for customers, and with a hotel, you can sleep comfortably in the knowledge that you’ve spread positivity.
- It’s also not a particularly complicated job to get your head around. While there are a number of moving parts, if you’re thinking of starting a hotel business, you’ve likely got extensive experience in the industry already, so starting small and simple shouldn’t be much of a challenge.
- Hotels are relatively immune to market fluctuations, too, and aside from the recent covid intervention, they tend to survive crashes where other businesses fail. The hospitality industry as a whole is bouncing back well.
Before you jump in though, it’s a good idea to get a reality check on some of the drawbacks of opening a hotel.
- Starting with the hassles that come to any business owner, running a hotel means that you’re the one who will ultimately be responsible if things go south. Creative freedom is one thing, but you’re also going to have to take full charge of the venture and make sure it’s running as intended.
- This can sometimes feel overwhelming, and if there’s too much to do, you’re likely to be unable to take breaks or risk leaving it up to management to handle, especially early on. Running a business of any kind takes strong leadership and you’ll need to set examples and spread the message of your business direction clearly and effectively to make sure everyone’s on board.
- You might also be limited by the whims of the shareholders. If you have taken on significant investment to start the business, you won’t be the sole director of the company. This means that you’ll maybe have to sacrifice some of your dreams to please those whose money is invested in it. Starting an Airbnb has lower startups costs than a full service hotel.
- On that note, your salary will have to come from what’s left when everything is paid off. If your business isn’t profitable, you’ll still have to pay your staff and cover the bills; it’s your salary that will need to suffer.
Once these considerations have been taken into account, if you are confident that you want to proceed, it’s time to start forming your hotel business.
Before Writing a Business Plan for a Hotel
For your hotel business plan, it’s better if you’ve at least got an idea of how you’re going to set up and source the necessities for your company before you start. There are some things you’ll need to know before getting started, and these will play a role in your financial projections and marketing strategies later on.
- Funding – Starting a company costs money and doesn’t usually make a return for the first few years. This means you’re going to have to cover the running costs from elsewhere. This is the first and most basic rule of entrepreneurship. Finding the building, covering the staff and utility costs, ad campaigns, insurance, and rent are just some of the costs you’ll have to calculate in order to source the correct funding.
From here, identify the type of funding you need, whether that’s going to be angel investment or venture capital, or even bootstrapping using profits from your other ventures, you’ll need to establish how much equity you need to exchange and where all the money will be going.
- Equipment – Furniture, meeting room equipment, computers for the main desk, barkeeping equipment, and any entertainment systems and fire extinguishers for the rooms and the lobby all need to be listed and accounted for.
- Licenses – Subscriptions for cable, insurance, and licensing of various kinds come as part of the package when opening a hotel, so make sure you’re legal and legitimate. Health and Safety, including fire safety specs, need to be met throughout the building. You’ll need to make sure you’re covered for customer damage, and that your customers and staff are safe.
Different locations will have different licensing laws, so make sure you’re compliant in your area.
- Staff – These are the people who will be interacting directly with your customers, so pick wisely. They’re the lifeblood of the hotel industry, and you’ll need a lot of them. A strong cleaning crew, a welcoming reception, competent kitchen staff, and management teams are some of the main roles that need to be filled well, so make sure you know how to go about this.
- Marketing Strategies – How will you be reaching your customers? This section is expanded upon below, but you’ll need to have a plan for where to advertise and how, how much it’ll cost, and what sort of promotions you’ll be running to get your first hotel customers in the door.
Hotel Business Plan
For your hotel business plan, you’re going to need to establish your business model. Simply setting up or buying a building and expecting it to fill itself probably isn’t going to work, and you’ll need to do your market research to establish exactly whom you will be serving, and how to attract them.
Here are the initial seven stages for setting up your hotel business plan, and the essential pages it will contain:
1. Executive Summary
Although this is the first page of the hotel business plan as a document, it’ll typically be filled in last, as a way of summarizing the subsequent categories of the plan itself. This is by far the easiest stage of the plan to complete!
2. Company Description
This is a product of your extensive market research and involves a thorough understanding of who you are and what you’re about. If this stage seems difficult to complete, it’s a good sign that you’re not ready to start, and you need to do more reflecting on the specifics of your dream. Begin the company description with a pitch, as this will be one of the first things a prospective investor sees. Use this section to communicate your excitement and passion for the company.
3. Products and Services
Here’s where you’ll lay out the range of services you’ll be offering. Suites, singles, doubles, twins, and everything in-between need to be itemized and set along with their rates across the different seasons. You can show your awareness of the competition in this stage too, by referring to their rates in comparison to yours. If you’ll be selling any products as well, this is the section to list and describe them.
4. Market Research
This section will need to cover an accurate depiction of your market data. It needs to be detailed and complete and should lay out all the specifics of your ideal customers. The market research you’ve done should show you exactly what your customers’ pain points are and how and where you’ll find them to solve their problems. A weak or poorly-researched market data section will be an immediate turn-off for potential investors and demonstrate that you’re unqualified as a partner.
5. Business Strategy
Once you know who your customers are, the logical progression is to explain how you’re going to reach them. This section should list your sales and marketing strategies, demonstrating a thorough grip on the sales funnel and customer journey from their perspective. Make sure the path to conversions is clear in this section.
You don’t need to list every employee in the company, but a demonstration of your management team, possibly with their photos included, and a short blurb identifying their experience and contribution to your company is very useful. It’s important not to go overboard on the descriptions and let their talent speak for itself. Focus primarily on the aspects of each member of the team that contribute to the direction of your company.
7. Financial Documents
Your hotel business plan is nothing without precise financial documents. These are likely to be the first part of the entire hotel business model that investors will scrutinize. That means they need to be accurate projections, based on real financial reports that don’t paint an unrealistically optimistic picture of your financial future. Financial papers are essentially a test of how objective and honest you are about your chances, and investors will pay close attention to them for this purpose.
It can be useful to get help with these. For specialized, professional templates specifically designed for hotels, take a look at our hotel financial model , boutique hotel and Airbnb financial templates here at ProjectionHub. These templates cover five years and are entirely customizable to your needs. They also come with free support, should you need advice on how to work with them.
Once you’ve got all your paperwork and research in order, you’ll be ready to welcome your first customers. Of course, you should have a plan for this already, and we’ve got some ideas to help you along with that below.
Your market research should strongly indicate which path you want to follow when it comes to finding your customers. There are several approaches to this, and a strong customer acquisition plan that makes use of strengths from multiple strategies is fundamental to the overall hotel business model.
Here are the main ways to bring people into your new hotel business, many of which apply to businesses of any size and scale:
- Offer discounts – discounts on rooms are a fast way to draw people in and get them familiar with your service. Loyalty programs and rewards for return customers can also be woven into this strategy, helping promote repeat customers. Your main goal for attracting customers should always be to have them return and to bring people with them or refer them directly.
- Be present online – Have a social media page that presents your promotions in places where you’ve established your ideal customers will be looking. Comment on industry-related topics and establish yourself as a voice of authority. Share information and take part in customer education, so that you become trusted by your clientele before they even set foot in your hotel.
- Have a website – Your social media should lead people to your website, which will provide booking options and a wider range of information on the services you offer. Provide a menu, room rates, and easy access to the information your customers want to know and make sure the booking process is effortless.
- Have a landing page – One way to boost bookings is to have a landing page on the website. This should present the promotional offers, and maybe have a video or high-quality photos presenting the value of your service in a visually appealing way to draw people in.
- Advertise – From your market research, it should be possible to target tasteful ads and spread your presence around your market. People need to know you exist, and how to reach you, so the exact way to advertise will depend on whom you’re trying to reach, but common cheap forms are Google Ads and flyers.
Intelligently targeting is the key here. For a good return on ad spend, it’s important not to just throw your message around at random hoping to reach someone. Put the groundwork in to identify your customers and reach them where they spend their time.
- Work with other hotels – Your market may be quite different from neighboring hotels, meaning you can work together to hand off bad-fit customers to one another should they be suitable. For example, if your hotel is cheaper than the one nearby, they might send people your way when they decide they can’t afford a room there, and vice versa. This collaboration can form a mutually-beneficial relationship that makes use of both companies’ marketing efforts.
Keeping up the high service will lead to customers returning regularly, so always think of the long run when you’re reaching out to people. The specifics of this guide will vary, depending on your specific business model and the scale of your project, as well as the location and the market you’re approaching, but most of these points are generally applicable under any circumstances.
Running a hotel can be a profitable and satisfying endeavor, but it does come with a lot to consider. A hotel business model involves a huge amount of research both inside and outside of the company, and putting all of this into a detailed business plan is the only way you’re likely to get financial support from investors, should you need it.
But there’s more to a hotel business plan than simply looking for investment; it’s a cross-section of the entire company, and the process of forming one involves learning and understanding your project in new ways. For this reason, it’s a useful exercise in building the company, and with this guide, hopefully, you’re one step closer to achieving that.
About the Author
Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.
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How to Make a Business Plan for your Hotel
Whether you own a bed and breakfast, a family-run inn, a cosmopolitan hotel or an all-inclusive resort, a business plan is absolutely essential to your success.
You might have the best hotel concept in the world, but none of that will matter if you don’t have a well-organized plan that lays out how it will come to fruition.
Unfortunately, many hoteliers don’t use business plans to their full potential. Instead, they throw together a collection of ad-hoc documents to show stakeholders, investors and other interested parties. Even worse, they don’t put together a business plan at all. This is a big mistake, but it often stems from people finding the concept of business plans intimidating.
Fortunately, hotel business plans aren’t as daunting as they seem. At their most basic, they’re summaries of the most important details of your hotel concept . They allow readers to learn everything they need to know about your hotel idea in a detailed yet succinct manner.
Need guidance in doing so? Follow the points outlined here and you’ll have no trouble developing an effective business plan for your hotel.
Table of contents for this article:
Hotel Business Plan Essentials
Other elements to include, focus on the essential, 1. executive summary.
Your business plan in a nutshell.
The placement of executive summaries is misleading. They normally come first in business plans, but really, they should be written last. This is because they cover all the key points that are mentioned in your business plan.
Along with summarizing the basics, remember to include your broader mission statement and specific project objectives.
We’ve said it once and we’ll say it again, it’s much easier to write a great executive summary once you’ve finished the rest of your business plan!
2. Company Analysis
Think of this as an elevator pitch.
Provide an accurate yet exciting impression of your hotel project as it stands. Talk about background information like business stage, legal structure, investors and/or stakeholders and other major milestones. Most importantly, make sure you also highlight your hotel’s unique features and qualifications, sometimes referred to as USPs (Unique Selling Propositions).
USPs are key in the highly competitive hotel market and can really make your concept stand out from the crowd. Does your hotel have pool, jacuzzi or spa amenities? Is it completely wheelchair accessible? Does it offer amazing views of the city or surrounding countryside? These are all key features to highlight in your company analysis.
Some company analyses also use the SWOT analysis framework to assess their hotel concept’s strengths, weaknesses, opportunities and threats.
- Optimizing occupancy, revenue or ADR
- Upgrading your software stack
- Solving distribution or/and tech issues
- Improving their hotel online presence
3. Industry Analysis
What context will you be operating in, exactly?
In a business plan, industry analysis refers to researching relevant market trends. Understanding short and long-term trends that affect the hotel industry is key in putting together an effective hotel business plan, and eventually running a successful hotel.
Think about trends and events in relation to broader themes like technology, health, environment, politics, culture and economy. Reflect on how they might affect your business, or better yet, how your business could use them to its advantage. In the context of COVID-19 , for example, it’s a great idea to be transparent about the sanitary measures and distancing policies your business has (or would be able to) put into effect.
Depending where your hotel is located, industry analysis may be daunting. A more manageable way to think about it is in relation to your relative market. That is, focus your research specifically on hotels that have a similar concept to yours .
Industry trends affect family-run bed and breakfasts very differently than they do all-inclusive resorts, so make sure to undertake analysis that’s relevant to your business.
4. Competitive Analysis
Now, it’s time to size up the competition.
One of the best ways to put together a successful hotel business strategy is to have an excellent idea of what the competition is doing. Emulate what they’re doing correctly and improve upon what they’re doing wrong. If you see that many customers are complaining about the weak WiFi or lack of breakfast at hotels in the area, see if your business can provide those amenities.
You can focus your research solely on local competitors, but you can also include global competitors with similar concepts to your own . How you choose to do this will depend on your hotel’s concept and where it’s located.
Similar to industry analysis, competitive analysis is intimidating to many. In order to simplify it, only undertake in-depth analysis of your most direct competitors. Some market experts also use the SWOT analysis framework when analyzing the competition as well.
When it comes to more indirect competitors, try grouping them together and thinking about big picture comparisons.
5. Ideal Customer Profile
Next, you’ve got to figure out who exactly will be coming to your hotel.
It’s incredibly important to have a specific picture of your hotel’s ideal customer. Just like any other product or service, you’ll need to determine who you’ll be marketing to . Different kinds of hotel guests have different priorities and needs, so it’s important to determine who you’ll be catering to .
Put simply, a businessman staying in central London for a work conference will have very different hotel needs compared to a family of four on a week-long summer vacation.
Ideal hotel guest profiles take geographic, demographic, socio-economic, psychographic, cultural and behavioral considerations into account. You’ll also want to consider whether your hotel concept will be broadly appealing to several hotel guest profiles or if you’ll be catering to a specific niche.
Need help putting together ideal customer profiles? Get inspired by checking out your direct competitors’ guest reviews online.
6. Marketing Plan
Last but not least, how will you attract guests?
A strong concept is only half the battle. Without an effective marketing strategy , your hotel will remain empty. At its most basic, your marketing plan should describe how you’ll attract guests to your hotel and therefore make it a profitable business.
In doing so, marketing plans usually touch on the following categories:
- Marketing How will you get the word out to guests? In the modern age, this most often refers to online marketing strategies related to your hotel’s website, search engine results and social media presence. You can also cover direct marketing, offline marketing, networking, third-party promotion and partnerships here.
- Sales & Distribution How will you secure bookings? Think about what channels you’ll use to communicate availability and manage reservations, for example if your hotel is being listed in Airbnb, you'll need an Airbnb channel manager to handle your reservations and avoid double bookings. Most hotels use a combination of direct and indirect sales and distribution strategies.
- Yield & Revenue Management How will you make sure that your hotel is profitable? Consider pricing and yield strategies early on to maximize your business’s revenue growth.
We’ve talked about hotel business plan essentials, but we’re not done yet. The points we covered above are the basics, but there are several additional elements that you might want to consider including.
Remember, your hotel business plan should most importantly present the specific context of your project . The elements you include should reflect that.
We’ve included some ideas of additional elements you might like to include below, but the possibilities are endless.
- Operations Discuss how your hotel will run on a day-to-day basis. This connects to management but focuses on the big picture. Make sure to include details like staff numbers, hotel processes, service standards, external suppliers and inventory management.
- Management Have you established who will be in charge of your hotel’s management? Or who will be working at your hotel? If you have, talk about their profiles and what qualifies them to do their jobs here.
- Finances Put simply, discuss the money you have, the money you’ll require and how much you estimate that your project will cost in total. This is also a good opportunity to mention ROI projections.
- Reference Materials Be sure to include any supporting materials that support the information presented in your business plan. e.g. charts, graphics, resources, imagery and other media.
There you have it! Follow the steps above and you’ll have an effective business plan for your hotel in no time.
If you’re feeling overwhelmed by the process, remember to focus on the essentials first . Basic information like your project background, industry trends, competitor research and ideal clientele is your bread and butter. Once you’ve got those elements covered, start thinking about what additional elements you want to include based on your needs.
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Firstly, we assess
We evaluate objective(s), defining opportunities and setting goals.
Then, we plan
We make a plan detailing what should be done to help reach set goals.
Finally, we make it happen
We implement change, as planned, within set timeline and budget.