The decision to buy a hotel shouldn't be capricious one. It takes a lot of consideration and planning to buy a hotel that is profitable. Consider buying a hotel as a long term investment, because it takes a lot of capital initially. The rewards are largely predicated on the location, the service, and the customer satisfaction. Here are some important tips on how to become a hotel owner.
Items you will need
- Hospitality Advisers
Consider the location of your potential hotel. What city would you like for your hotel to be located? The success of a hotel largely depends on its location. You want to be in either a business or vacation destination. You should choose a locale that is in demand. It's a good idea to mark a few cities or locations where you'd like to have a hotel, and go through the pros and cons of each destination.
Decide whether you want to buy a used hotel, or build a new one. The benefit of buying a used hotel is that you don't have to pay for the construction of a new building. The benefits of building a new hotel is that you don't have to pay for the inevitable renovation of a used hotel. It just depends on how much money you have to invest, and which one would be more economical.
Buy a franchise. Whether you choose to buy a used hotel or build a new hotel, you will need management. Buying into a franchise (for example, Hilton or Marriott or Four Seasons) will afford you built-in management. Another benefit is that you have the extra credibility of an established hotelier name. Guests would be more likely to book with an established franchise. There is also the value of getting sales through the franchiser's website or toll free number. Your hotel will not need as much advertisement on your end.
Create your own brand. If you don't like the idea of buying a franchise, you can start your own boutique hotel. This gives you the opportunity to build your specific brand. You will need to hire a management firm to oversee the daily operations of your hotel. This management firm will also be responsible for hiring staff. It's crucial to hire a firm that is aligned with your vision for the hotel, or else your company will suffer.
Decide what type of hotel you'd like to run. There are several types of hotels: motor lodges, extended stay, resorts, suites, business, family, and luxury. You must define a niche for your hotel. After you've decided the type of hotel, you must also decide how many rooms you'd like to have, the staff to guest ratio, and to which clientele you will cater.
Raise capital. You will need considerable capital for a down payment for your hotel. Don't forget that a huge part of your investment goes into operational start up. This includes employee salaries, daily hotel upkeep like electricity and landscaping, and grand opening promotions. You will be paying into a hole initially, because operations must be paid whether or not you have guests staying in your hotel. Consider gathering a team of investors, if you don't have enough capital.
Stay in a hotel similar to the one you'd like to open. Observe what makes that hotel solvent (customer service, hotel room furniture, price points), and implement key principles into your own hotel. Research the city statistics and traffic for the location you choose.