Any successful business is born from a thorough plan, your hotel business isn’t any different. Before you make a name for yourself with your great hospitality and atmosphere you must have a solid start.
An effective hotel business plan can be created through 10 steps. This blog will show you how to easily create a roadmap that will be beneficial for years to come.
What is a hotel business plan?
A hotel business plan is a document where you decide on a roadmap for your newly built hotel business. It consists of goals, objectives, strategies, and an analysis of your competitors. It does not only show you what you need to do to achieve success but what to avoid as well.
Having a hotel business plan in place before diving into the hard work can really set you up for success. It gives you a crystal-clear vision for your long-term goals and objectives, therefore it is not only about an immediate benefit.
How do I write a hotel business plan?
Writing a well-put-together hotel business plan requires some key points that will help you turn your plan into an actionable guideline. Here are the 10 key steps to turn your dreams into a success story.
1. Executive summary
The executive summary kicks off your hotel business plan, setting the tone for everything that follows. It’s crucial because it outlines the essence of your business and its aspirations.
Keeping it concise is key to keeping your investors engaged. Just explain your vision and mission in straightforward terms, and convey why you’re deeply passionate about this project.
Vision: Be straightforward with your vision, what you want to achieve at your hotel, and what are your aspirations. Your vision will be the starting point for your business venture.
Mission: This is a summary that outlines the reasons behind your desire to launch your business, identifies your target customer base, and highlights your strategies for providing them with outstanding service.
Goals: What sets goals apart from vision and mission statements is their specificity and measurability. Let’s illustrate this with examples:
- Achieving an annual 85% occupancy rate in the second year
- Becoming the top-rated hotel in your fifth year in the area you operate on
- In the first 6 months achieve a customer satisfaction rate of over 93%
Answering these three will help you build an outline. From there what you need to ask yourself is: “If I were a guest, would I like to stay here?” If the answer is yes go for it and move on to creating branding for your business.
If your vision, mission, and goals are not satisfactory and your planned hotel is indeed not a place you would like to spend your holidays, go back to the drawing board. Think deeper into what would be a good idea for your future hotel.
Following your dream can take more effort than you might have imagined in the first place but having a solid plan for these three is a must.
2. Distinctive identity
Now, it’s time to find out what sets your hotel apart from the rest. Every hotel possesses a unique selling point, catering to diverse guest preferences. Some prioritize luxury, seeking extravagance in their accommodations. Others are drawn to themed hotels, where each stay promises a distinct and immersive experience. And, of course, there are those who prioritize location above all else.
Once you’ve pinpointed the essence of your hotel, you can delve into branding strategies. This is where you show your guests why they should choose your accommodation over the competition. By highlighting your unique selling points and crafting a compelling brand narrative, you can create a brand that sets your hotel apart.
3. Sector analysis
This section contains information about the current market situation, customer trends in the industry, and how all these will affect your hotel. You can then incorporate these trends into your business practice.
If you don’t know where to start you can check out economic, environmental, political, and technological trends. The sector analysis is critically important in terms of ensuring a clear understanding of the accommodation industry vis-à-vis investors.
4. Guest analysis
Which guests do you intend to accommodate in your property the most? This section includes details about guests such as demographic, psychographic, behavioral, socioeconomic, and geographic categorizations (segmentation), i.e. it contains thorough information regarding your target market.
Here you should explain your hotel’s position across the target market in terms of your activities and services, how it will cover the needs of your targeted guests, and why the guests will prefer your hotel.
5. Competition analysis
When doing a competitor analysis, check out the local hotels that your guests may prefer and the global competitors where you share the same niche. Dive into their strategies, dissecting their strengths and weaknesses.
Once you have that analysis on hand figure out an aspect that will separate you from them. This is your unique selling point—the defining feature that captures guests’ attention when they’re deciding where to stay. By honing in on what makes you distinct, you position your hotel as the standout choice in the eyes of potential guests.
6. Strategic planning
Now that you have all your base points covered and figured out how your today will be it is now time to focus on the future. You may have great ideas for your hotel, know all the industry trends, and have a USP but it is also important to have a controlled growth plan.
When you are deciding on how you will continue to grow, there are certain questions you need to ask yourself in terms of marketing, distribution, and revenue management.
Marketing:
- What kind of guests does your hotel attract?
- How would you position your hotel?
- What message does your hotel communicate to different guest segments?
- How will your direct marketing activities function?
- What are your hotel’s plans regarding your website, SEO (Search Engine Optimization), SEM (Search Engine Marketing), and SMM (Social Media Marketing)?
- Do you plan to launch offline promotion campaigns for your hotel?
Distribution:
- Which third-party channels will you use and how will you manage their availability?
- Which technologies will you need?
Revenue Management:
- Which pricing and productivity techniques will you utilize?
- What kind of payment and cancelation policies will you implement?
7. Operation plan
In your hotel business plan, this section is where you detail the day-to-day operations of your establishment. One of your initial priorities is establishing a staffing strategy. Determine the number of employees and chefs you’ll hire, outline their job descriptions, and allocate responsibilities accordingly.
Once your staffing strategy is in place, define guidelines for your staff to follow and establish service standards. These standards are crucial as they directly impact your business’s reputation and the guest experience.
Another critical aspect of your plan is selecting suppliers. Your suppliers play a pivotal role in shaping your hotel’s overall atmosphere and food quality. Carefully vet potential suppliers to ensure they align with your standards and objectives, as their products and services can significantly impact the success of your business.
8. Executive team
When building your team, you should focus on unique qualifications that will make your hotel an outstanding success. Your hotel staff serves as the backbone of your operation, directly influencing the smooth functioning of your business and shaping the guest experience.
After you decide on your staff, include your team’s biographies in the executive team section.
9. Financial plan
A financial plan contains hotel, capital, investment, and establishment expenses that will be incurred for your hotel in the upcoming five years as well as the expenditure covering your revenue projections, recruitment costs, and operational costs.
Once you’ve laid out your financial plan, you’ll have a clear picture of the investment required for your business. This not only helps you understand your funding needs but also provides valuable insight for potential investors reviewing your hotel business plan. They can assess the investment required and evaluate the financial projections and return on investment (ROI) potential, aiding them in making informed decisions about investing in your venture.
10. Fundamental milestones
When creating a hotel business plan there are some fundamental milestones you mustn’t miss. The best way to ensure that is to make a list of what they are and create a detailed plan on how to tackle all of them before your opening. If you don’t know what they might be here is a list to give you ideas:
- Selection of your location
- Permissions and licenses
- Legal compliance
- Establishment/ hotel construction
- Employees and training
Missing some steps can cause troubles for your business therefore it would be a smart decision to create a checklist to make sure you have completed all of them.
How do you start a hotel business?
Tapping into our tips, you can also build a hotel business and enjoy an invaluable roadmap on your journey. HotelRunner is always there for you to claim your position across the digital realm. Connect with our team to see how HotelRunner can help you grow your business.
