If you intend to own and operate a hotel, the one thing you must have in place is a solid, actionable, and realistic business plan.
Not only will this be useful to you when you want to attract investors and partners or when you need to obtain funding, but it can be the perfect roadmap to help you achieve your business goals and not get distracted along the way.
With a solid hotel business plan, you’ll be able to make important decisions more easily, and you’ll know whether you’re on the right track or you need to make changes in how you’re working.
With all this in mind, hotel business planning is crucial. Read on to find out how to get started on your hotel business plan to succeed in the hospitality and tourism industry.
Defining your hotel business plan
There are several key steps to consider to build a solid business plan for a hotel, including the following.
Understanding the purpose of your business plan
Studies indicate that having a well-crafted business plan can help your organization grow up to 30% quicker and safeguard against potential risks, so it’s certainly something you’ll need to be able to do if you’re planning on running a hotel and getting into hotel management.
Take your time over your hotel business plan and think things through, but keep in mind that this document is not set in stone and you can make changes if necessary.
Many in the hotel industry find that they need to continuously adapt their business plans to reflect the changing needs of clients and the economy.
One element to include in your plan is an assessment of the risks and challenges of owning a hotel. If you can include these, it will show that you have researched the potential issues that you might come across during your career in hospitality and that you have safeguards in place.
Identifying your target market
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You’ll need to carry out thorough market research to determine exactly who your target market is – ie. your typical hotel guest. This can be something you do yourself, for example by sending out surveys or using social media. Or it could be a project you outsource to experts.
Although this latter idea will cost more, it could be useful when you need precise information for a hospitality business.
A degree in hospitality can help you understand what your target demographic wants from a hotel, and if you can provide it for them, and account for this in your hotel business plan, you’ll have much stronger evidence as to why your hotel business model is going to succeed.
Once you know who is most likely to want to stay in your hotel, including their age, background, career, gender, and as much other information as you can find, you’ll be able to craft a marketing plan that speaks directly to these people, helping them make a decision that goes in your favor when they need somewhere to stay.
Conducting a SWOT analysis
Carrying out a SWOT analysis is a crucial task that will help you understand a business in greater detail. Once you have the information gathered from this analysis, you’ll know which areas you need to work on and improve, and where you excel and therefore stand out from the competition. Your USP could be developed from this.
A SWOT analysis considers your strengths, weaknesses, opportunities, and threats (hence the acronym). You must honestly appraise each of these elements as you work through them.
You’ll be able to see if your hotel development opportunities will work or whether you might need to change how you are approaching something.
If you can include your SWOT analysis results in your hotel business plan, lenders and investors will be able to see that you have thought about every outcome of what you intend to do, and you’ll know precisely which route to take when it comes to moving forward.
Setting clear goals and objectives
With clear objectives in place, you’ll have clear goals to work towards. This will help to keep you and your team motivated, and it will steer you in the right direction at all times.
As for external lenders who might need information about where you see your hotel business going, these goals will show that you have a considered plan.
Combined with your SWOT analysis, this should be a solid foundation on which to build a business.
Developing your hotel business plan
Now that you have a better understanding of what goes into a hotel business plan, you’ll be ready to start writing one by incorporating the following.
Crafting a mission and vision statement
Mission and vision statements might seem at first to be the same thing, but they’re actually different.
The mission statement outlines everything your business is doing right now to reach its objectives. This will be just two or three sentences that talk about what your hotel business does, how it does it, and perhaps why it does it.
The vision statement is usually just one sentence that outlines the ambitions and ultimate goal of the hotel. The two might be linked, but they’re not the same.
Outlining your hotel business model
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When writing your hotel business plan, there will be a variety of sections to include, such as these.
- An executive summary
- A business description and structure
- The services offered
- Your market research and marketing strategies linked to that SWOT analysis
- Your personnel, including management
- Financial plan and documents
Creating a marketing strategy
Your marketing strategy is at the core of how your hotel project is going to grow and be successful. As we’ve mentioned above, good market research will set you on the right path, as you’ll be able to tailor your advertising to those who are going to be interested in what you offer.
For example, if you advertise to customers who are looking for boutique hotels, you’ll need to ensure you emphasize the features that make it special.
Establishing a financial plan
Every business needs a robust financial plan. Your financial plan will give you information about where you are now and what you need in terms of profit to get where you want to go.
It will illustrate any savings you could make, and it will help you determine an accurate and profitable pricing model.
Structuring your management team
The “management” portion of a business plan provides details about the company’s leadership, personnel, resources, and ownership structure.
Management team members and their specific contributions to the company’s success should be detailed here.
Common mistakes to avoid when creating a hotel business plan
One of the biggest errors when it comes to your hotel business plan is not being realistic with your financial projections. Whether you hedge your bets or you’re too optimistic, seasoned lenders and investors will be able to tell if something isn’t right, and they won’t want to work with a hotelier who doesn’t understand their figures.
This is just one reason why attending hospitality school in Switzerland – home to four of the world’s top five institutions – is a good idea, as you’ll learn how to understand business finances and how to create an accurate plan.
Another mistake is guessing rather than doing research. Your market analysis will give you important information that you can use to your advantage, and skipping this task because it’s time-consuming or difficult will only harm your business in the end.
Implementing and monitoring your hotel business plan
Once you have your hotel business plan in place, you should make sure that it is monitored and revised as needed.
Executing your hotel business plan
To execute your hotel business plan well, it has to be accurate – again, this is the most important thing to remember when you are writing each part of the plan. The hotel business plan should also be flexible to accommodate the ever-changing guest experience needs.
Although you’ll want to follow the plan as much as you can, you need to be able to adapt it when necessary. Work through each step that you have identified in the order that it needs to be accomplished, and slowly but surely, your hotel business will emerge.
Tracking and analyzing your progress
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You must take stock of your current situation and analyze your progress regularly. To do this, you will need to have goals in place.
These might be financial, for example, or they might relate to the number of staff or clients you have. Unless you have specific goals to work towards in a certain timeframe, progress could be challenging to track.
Making adjustments where necessary
With the right monitoring, you can make changes where necessary and adapt your plan to ensure modifications are taken into account before you move too far from the correct path.
If a business owner is too fixated on sticking to their original plan, business growth could become stagnant.
If you want to run a hotel business, a hotel business plan is essential and should be the first task you undertake, especially if you want to obtain funding or find investors.
Start with your mission statement and vision statement, and keep these in mind as you work through the other important sections of the business plan. This will help you to stay focused and keep the ultimate goal in sight.
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Are you ready to unleash your creative powers and take your hotel business to the next level?
With the right plan in place, you can achieve success beyond what you ever thought possible. From structuring a strong management team to accurate projections when creating a hotel business plan, learn all you need to know with our hotel management Master’s program.Hotel management masters