Establishing a new hotel: Getting started

If you are thinking of a ‘venture’ in the accommodation industry or contemplating to expand with a new branch in a different location, you first need some comprehensive planning.

You may have a certain concept in your mind for the new establishment. However, before you get started with it, and in order to save both time and money, you should first measure how this concept would fit your new establishment. Let’s imagine you plan to implement full pension pricing. Finding out all other establishments implement half pension pricing in the area could put you in a tight spot after you have already opened up a new establishment.

Well, this is only an example. There are many more factors you need to take into account before getting started. You might have estimates, which, however, may not always result in realistic outcomes. Therefore, before you make your final decision, do some serious planning.

What should one do? Here are some efforts you need to put in before deciding to open up a new establishment…

How to get started?

First of all, what you need to do is market research on the area that is your prospective location. It would be safe to find out the past few years of the accomodation industry in the area so that you could develop an idea as to how profitable your investment would be. The Internet is a good source you could refer to. However, please note that a serious investment is the case here, which makes engagement with a consulting firm to receive more reliable data a better option.

What to look for?

Correct answers are achieved through correct questions. What are the common characteristics of the visitors to the area? Where do guests come from? What is their purchasing power? For which purposes do they prefer that specific area? In addition to consulting firms, tourist agencies or airline companies can be considered among the sources from which you could obtain such data.

Besides, one significant criterion for sustainability is finding out whether the local labor has the capacity to meet the demands of the industry.


Unless your establishment is the only one in the area, you will be in competition. Meticulously track the hotels whose concept is similar to yours in your prospective area. Among the details that you first should consider are the number of their rooms; star ratings; whether they are part of a chain; their services; online reviews and comments; as well as price ranges. This is how you could also position yourself better vis-à-vis the conditions of a possible competition in the area.

Return on Investment

Above all, what matters is the return on your investment. Anticipation of ROI and your estimations relating to figures are based on your market research and analyses on your competitors. Evaluate your operations and expense items in detail. Analyze costs and profits for each department of your hotel. Determine the costs of each department after separately planning related personnel. Make sure your cost/profit analysis is detailed enough and compatible with the market data.

The time you would spend for market research and feasibility studies before making your investment could save you from significant costs and problems that you might have to deal later.

If the outlook looks promising even after all these efforts, congratulations! Then you only would need to promote your establishment and increase profitability through direct sales. HotelRunner will be your guide whenever you need. Create your account for free and see yourself what HotelRunner can offer for your new hotel…

Image: Philippe Du Berger

Cihan Coşkuntuncel

Director of Sales and Business Development

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