Hotel Business Plan
Business can spring up any time, but the key lies in knowing how to tackle the challenges head on. Entrepreneurs who have a “desire to serve” would make perfect candidates for opening a hotel.
Opening a hotel goes much beyond just having room to check-in and serving food. It should be a haven for the tired traveller, where they feel welcomed and relaxed throughout their entire stay. The best hotels always put their guests first on priority. We should also ensure that your hospitality is carried and passed onto the guests not only by you but also filters down right from the top management to the ground staff. The success of a hotel is dependent on the overall experience of the customers.
OK so you now have a mind-blowing concept leveraging unparalleled service. The next step is to come up with a roadmap to the opening. This is where the business plan comes into picture. Although it’s possibly the most time-consuming and tiring step to the realization of your dream, your hotel business plan is the foundation. Having a concrete business plan not only clears the path to the success running of the business and its launch but also saves a lot of time wastage in the future, post-launch. Going through the process of writing a business plan is where you take time to visualize each and every step of your imagined future – it is the structured vision board of your idea. While starting a hotel, If you don’t have a hotel business plan, you would always be lost on the way, not knowing where exactly you are going with your business and constantly on the back foot. Moreover, how would you dare convince someone to invest or fund your idea if you do even have a functional vision to put forth?
Let’s take a deeper look at how a business plan could help overcome some common challenges faced in the start-up hotel business:
- Determine Brand Position and Identity
Before you start laying the stepping stones, you need to first generate clarity on the type of hotel you would like to start. How do you plan to position yourself in the market – a budget hotel, luxurious hotel or a business hotel? Depending on what type of hotel you choose, your business model and other strategic decisions may vary. For example, budget hotels are targeted at the middle class consumers and come with lower quality of service. Budget hotels typically scale back on the amenities to pass the savings back onto the customers. Once you pick a type of hotel, it will impact all the other business decisions. As it is not an easy transition from one type of hotel to another, it is wise to do as much research before you commit to a decision. Writing down a business while visualizing and brainstorming on your dream can help you arrive at conclusions on the type of hotel and its brand position. Depending upon the service you want to provide to your customers, you could write down the hotel business plan, hospitality business plan or hotel resort business plan. Innovative use of technology to ensure operational productivity not only attracts customers, but helps the hotel brand stand out from the rest.
- Determine and Understand the Target Market
You cannot start a hotel without having a clue on what your guests’ needs and wants are. You cannot create a great customer experience if you aim to satisfy all because each target market varies depending on their needs and preferences. Will you target families or business people? Each of these categorizations of people has different needs and preferences and if you do not know what they are, your hotel will lack direction and will not stand out in the crowd. Hence, having plans for a hotel, in the beginning, is essential. Moreover, your marketing plan will also be highly dependent on your target market; your marketing would make no impact if you do not know who you are intending to pass the message to and how to get their attention.
- Envision potential Operational Challenges
Operational challenges are a major road-blocker for most hotels and occur due to lack of proper management and planning. Lack of operational productivity can lead to chaos and losing customer trust. The faster you can enable smooth and seamless service for your customers, the better it is for your brand. Establishing a seamless integrated hotel management system would require a lot of research and analysis. Spotlighting potential operational challenges during the initial phase will give you ample time to research and find the best solution to the problem. For any service-based business, standardisation is crucial. If you are new in the hotel business, you may take assistance from hotel business consulting services.
- Ensure Legal Obligations are met
There are a number of red tapes that need to be addressed specially by the hotel industry. Permits and licences differ depending on the local government of where your hotel is located, which makes it integral to do your research and get acquainted with the legal mumbo jumbo before the business takes off. However, if you don’t want to go through all these legal processes all by yourself, you can take the guidance from hotel consultancy services. After all your business is your dream venture, and you cannot allow any risks that could have been foreseen and avoided. A hotel development business plan makes you list out all the necessary licences and permits that are legally mandated and prevent any possible non-compliance issues while you are already up and running.
- Secure Funds
Since hotel startups take up considerable funds, it makes sense to ensure that your funding plan is ready well in advance. A well-thought-out business plan would be the key to securing the funds needed to start your hotel. However, there shall be many factors that you will need to consider while pulling out your financial strategy with investors. Their major focus would be on whether your business would generate ample return of investment (ROI) to both function effectively and fulfil debt obligations. Hence, your hotel investment business plan will need to detail out both profit and cash flow projections. It will prove to your investors that you have the capabilities to plan out and implement a strong revenue management strategy.
- Define Marketing Strategy
The hotel industry is highly trend sensitive, and it is imperative to be receptive to the changing marketing and advertising strategies. As part of your business plan, you would be necessitated to draw a clear-cut marketing and advertising strategy. This is the section you need to be as creative as you can be in order to stand out in the market. To effectively attract potential guests, you need to understand the needs of the guests and their behaviours. Subtle but effective marketing to prompt the customers to take action just like flipping the pages of a book would do magic to your brand.
Writing a business plan is a tedious task and involves a lot of researching and decision making that might seem exceptionally difficult. However, these key elements will make your hotel more likely to succeed in the long run. Your pervasive business plan is the ship that would sail your idea to the market and also keep it afloat. Hence, action that mind-set and write your business plan now!
Why DFX to develop your “Hotel Business Plan”?
Whether you need a good get-start to start writing your business plan or have a plan that you are seeking to verify and update, DFX can help in inculcating a hotel business plan that best suits your priorities. DFX’s well-experienced hotel business consultants may guide you in hotel business development and financial expertise to uncover key elements and present your numbers with confidence in a fully customizable winning business plan.
In the visioning exercise, the objective is to lend clarity and comprehension to the business idea under consideration. It often leads to discovery of potential bottlenecks as well as better ideas and inputs.
The idea behind conducting a SWOT analysis is to identify the existing strengths and weaknesses in the light of the business vision for formulating effective planning and strategies later on.
Hotel business need to function and move ahead as one organized unit. In this module, our experts shall define the internal organisation structure of the proposed business entity. We will also map the scope of work and functioning of the external stakeholders (i.e. agencies, consultants, vendors, suppliers, etc.).
IT system strategy shall also be defined which shall cover the assessment of the IT and software requirements of the business spanning across various line and staff functions. The timeline for implementation of every software application shall also be done to ensure that business operations are initiated as per schedule.
Process Strategy shall be a part of business strategy wherein you will learn about how to make your startup business enterprise more process-driven and less people-dependent. You will uncover tools and strategies critical to achieve the same. The module will cover how business processes and operations are defined and how they can be improved and improvised in a planned and systematic manner.
Marketing begins with the idea of hotel business or a product/service itself. Everything that places a business enterprise in the right spot at the right time is mostly about marketing decisions and strategies. DFX experts shall work closely with your business and devise "Go-to-Market" and "Business Launch" marketing budgets and strategies so that your business starts off with the right note.
Your advertising and promotional efforts would be meaningless if you fail to generate the targeted sales levels, consistently and efficiently. Managing and controlling sales can cover a wide range of factors including data analysis, goal-setting, feedback and reporting, skill training, defining workflow, leaderships and monitoring, time management, incentives, etc. In this model, you will learn about formulating a robust sales operations strategy for your business.
It is important to let the ‘numbers’ validate your business model before taking a deep dive into it. In this section, DFX experts shall help you assess the financial requirements and commercial viability of your business project.
Good budgeting ensures that you are spending your investments and revenues judiciously. If you go spending unplanned, you are almost certain to deviate from your profitability goals. Budget allocation serves as a business’s expenditure roadmap. As a part of the business financial strategy, this module will cover the approaches and guidelines for effective budget allocation.
By determining the action plan, we arrive at the implementation plan with duration of the project. It maps the sequence of tasks that must be completed on time; otherwise the project will get delayed. In this module, you will learn to map the critical path that leads to the launch of your business on time. It will help you channelize your focus and efforts on priority basis and help you stay organized during the entire process.
Do's & Don'ts are well-defined within implementation plan to avoid anticipated road-blocks during hotel business setup
25 - 45 days
Step 01 - Request for Quote
Step 02 - Service Quote Finalization along with SLA (Service Level Agreement)
Step 03 - DFX Experts start working on your business
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