If you have concluded that you want to start running a hotel/hostel as a business, good for you! Running a hotel can be rewarding, both financially and on a personal level. At this planning stage, it’s good to start quickly to think in practical terms. How large is this hotel or hostel going to be? The larger the hotel, the larger investment it will require, in both time and money. You could also start with a bed and breakfast type of option, that you run from your own home if you have the space for it. A bed and breakfast could be run as a family business, but could also put an unnecessary strain on the family.
A hostel is usually for guests that have less of a budget than those living in hotels, so the initial investment to start up a hostel will be smaller. However, the income per bed will also be lower, so don’t fool yourself in this stage into thinking that hostels will be the easiest to run. However, they can be, if the only service you are providing is to give people a place to sleep.
Apartments are for guests looking to stay for a longer time. The people staying in apartments want to have things like a supermarket in the neighborhood, and some way to do laundry and similar ordinary things that you need to take care of if you are staying at a place for several weeks.
You should also think about the location, where do you want to have the facility? Eventually you need to start thinking about marketing, and this will be dependent on the number of beds you have and the type of guests you will be targeting. The location also matters here, the type of guests who want to stay in the countryside will not be the same as people staying close to an airport or central train station.
Based on the clientele you are looking to get once up and running you, as the owner, set the level of luxury provided according to the amount you think people will be willing to pay for staying with you. It can be possible to provide some feel of luxury while not increasing spending a lot, but this can be a challenge. So, in broad terms, it’s important to decide if you either want to focus on the sense of luxury or giving maximum value. When you have decided, set up your plan with this in mind. Don’t promise luxury that you cannot provide, or paint up a picture of a luxury hotel in your marketing material if it in reality is a facility focused on serving guests cheap beds. This might bring you a bad rating just because there is a disparity between what you promised and what you delivered, and bad ratings can ruin your business.
Another aspect that is important to look at is; how much do you have and how well can you economize on it to be able to provide the best? It will be necessary to make a good budget and marketing plan that is realistic and achievable. If you cannot come up with one on your own, it is always good to work with a financial advisor. They will help you to create a plan that is reasonable and well thought out.
You might be thinking that it might be for the best to just provide the funds and find someone else to manage daily operations for you. As with many startup businesses it will be important to have a hands-on approach in the beginning, for at least 3 years. When the business has matured, gotten over the first problems, and you see some profits you can start to think about finding a replacement for you. But doing it from the start is a bad idea, which we do not recommend. The best way is to have someone with you from the start that will know the business well at this point, and can be groomed from start to be your successor when the time comes.
Alright, that’s it for this time. We have lots more posts lined up on this subject, stay tuned for more tips and thoughts about how to start running your own hotel!