If your dream is to own and operate a hotel, there are many opportunities for a substantial profit. With the pandemic winding down, many people are eager to go on vacation and experience living once again.
Similar to owning a home, location matters. Easy access to parking and nearby amenities is essential to turning a profit. Whether you are looking to purchase an existing building or design a new structure, make sure that the location is near things such as parks, beaches, fine dining, and shops. The nearby competition also matters. Trying to compete with a top hotel chain will reduce your profits by an increase in luxury benefits just to survive.
Creating Your Own Brand
Opening a hotel requires careful planning. The marketing strategy should include a distinct difference in why customers should choose your hotel over others in the vicinity. What makes your business unique? Some of the most successful hotels offer perks for loyalty such as points per visit that accumulate and lead to a free room. Others stand out for their luxurious amenities. This can include things like free breakfasts, use of pools, saunas and hot tubs, and discounts at onsite hair and nail salons and restaurants.
With Covid-19 still on the mind of consumers, a focus on cleanliness is essential. This is not something that’s likely to go away anytime soon. Hand sanitizing stations located throughout the facility is the new norm for hotels. Cleaning crews are armed with heavy-duty sanitizers to make sure that each room comes with a seal of approval so that guests can relax and enjoy their stay without worry of contracting an illness.
Some owners are taking it a step further. Installing a water filtration system not only helps to reduce exposure to potentially harmful chemicals and contaminants but also reduces the presence of odor. Additionally, a water filtration system will prevent hard water and make showering a pleasant experience. Make sure you work with professionals who are experts in your local water supply–after all the water in, say, San Diego is going to be much different than the water in Bakersfield! A quick search for water filtration Orange County (or San Bernadino, etc.) will help you find local experts.
Hotels have a high turnover percentage. This can have a negative impact on the customer’s experience. Today, word of mouth can make or break a business in short order. One bad tweet on social media and you will see your profits go out the door. Retaining qualified staff members is critical to branding your business. Employees who remain on staff for many years have the knowledge to keep your business moving in the right direction. When you constantly retrain new individuals it’s almost impossible to sustain a positive image.
Not everyone reaches a hotel at 2:00 pm, and therefore having check-in times set in stone can be problematic. Being flexible by having a section of rooms available for those who arrive mid-morning will increase sales and help to brand your business as convenient. Finding a niche that sets your hotel apart from the thousands out there will help you sustain growth annually and build a loyal base.
A Concrete Business Plan
Before taking out a business loan you should have a comprehensive plan in place. There are many costs that come with hotel ownership. Things such as bed frames and furniture will only need replacing every 5 to 10 years, however, sheets, pillows, towels, and blankets are a small sample of yearly replacements that you need to account for. You’ll also have utilities, taxes, and insurance to prevent losing everything. Employees and contracted part-timers like maid service and cooking staff are just a few additional expenses involved with the operation.
Owning and operating a hotel in the right location, with personalized amenities, can prove quite profitable. Make sure to take into account all the necessary costs associated with this endeavor ahead of time.