The hotel business is notoriously difficult to break. Many have lost thousands investing in hotels. The problem is that they did not understand how the business works. The hotel business is all about pleasing people. Once you understand this, it all falls into place. Starting small is the best way to witness this first-hand. A guesthouse or B&B is a great business to start.
People will always need a bed for the night. That part’s easy. To become a successful hotel owner, you need to make their experience memorable. You need to provide them with the best possible customer service and give them something that other local hotels can’t. Small hotels thrive through word of mouth, customer review sites and repeat customers. Start small and grow. The following steps will help you.
Thanks to Kevin Dooley for the image.
The reality is that the hotel market is dominated by standard, mid-level hotels – the Holiday Inns of this world. They are budget hotels and customers know what they’re getting when they book one. Unfortunately, you can’t compete with them. Due to the sheer size of their business, their room rates will always be cheaper than yours. They offer a familiar service and they occupy the best locations. So, what can you do?
Offer something they can’t
The only way to compete is through a unique selling point. Do your market research. What hotel service is missing from your local area? Browse the reviews of hotels in your area and see what the biggest complaints are. Solve these problems and you’ve got yourself a unique hotel.
Decoration and personality is a great way to stand out in the hotel market. A memorable hotel means great reviews and repeat customers. A unique makeover is a fairly cheap and easy solution that leaves a lasting impression.
Consider relocating your business. Guesthouses and B&Bs thrive in places of heavy tourism. However, they don’t fare so well in cities – especially in the business districts. Although you’ll have to lower your prices, you’ll get more bookings in a popular countryside or coastal area.
Now that you’ve got your location sorted and have a unique hotel in mind, it’s time to draw up the budgets. You’ll need a yearly projection that can be broken down into a day-to-day budget. Get quotes from all sorts of service providers, including a linen manufacturer and local food producer. Find out how much your cleaning costs will be and how many extra staff members you need to pay.
Remember that hotels are seasonal so you may need to account for long periods of empty rooms. There’s also repair and general maintenance to factor in.
Finally, consider buying an existing business
Starting from scratch will require skill and a lot of experience. If it’s your first time, consider buying a business that already has the right infrastructure in place. If they’ve got a full summer of guests booked in already then even better!
Most of all, are you a people-person? Those who are always on hand to help others will thrive in the small hotel business. If you’re not quite convinced, why not put your flat on Airbnb and see if you like the idea of hosting others? Start small and you’ll soon take over the world!