How to Produce
Setting up a business as grand as a hotel is an investment that not many people are willing to take.
As building a hotel has more cons than pros, to be honest. But if ever you decide to push through with constructing a hotel, here is a sample business plan that you would like to consider as you go through the whole process.
Hotel Organizational Structure
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Conducting Market Research
1. Determine where you’d like to locate your hotel.
Location, location, location, location. At the end of the day, it is all about location. Whenever businessmen would set up their establishments in a mall or in a retail space, some owners would ask them to submit feasibility studies to see whether their business would be able to sustain itself in a very busy environment. You may also see simple business plan examples.
In the same manner, you have to be careful on where you decide to set up your hotel because there might be some areas filled with too many hotels or you might be lucky to find a place that does not have too many hotels and is a place that is usually packed with tourists especially when they come to visit.
There are proprietors or partnerships who establish hotels that eventually end up failing because of insufficient market research or advertising. You may also see examples of simple business plans for more additional insights when you are having troubles in coming up with one.
2. Decide if you will buy an existing hotel or build a new one.
Now, once you have the location, the next most probable thing that you have to do is to then decide on whether you would want to build a new hotel or simply buy the old one and remodel it to your liking. Keep in mind that there is no existing right answer to this dilemma that people will often find themselves facing.
Whether you decide to just construct a brand new hotel or buy an old and dying one, here are some things that you would have to consider:
- If you buy an existing hotel, it will probably be cheaper than building a new one, unless the property needs major renovations. It may cost a lot to you now, but think of it as a long-term investment that will eventually reap over time. Other than the renovation costs, you may also want to take into account the internal issues that the original hotel might have. There are a number of things that you can do: inspect as to whether all personnel assigned in their designated positions are competent enough to do their duty, the food that is being served, the cleanliness of the rooms, the customer service, etc. If you think that it is good as it is, then best keep them. If not, it is high time to do some changes. You may also see business plan outline with examples.
- If you build a new hotel, it will probably be more expensive. But the good thing about it, however, is that now you get to design your own hotel and construct it just the way you want it to be. But knowing that you are going to start everything from scratch also means that you have to get down to business immediately. Because once your new hotel opens, you still do not want it to be closed, do you? By the time it is ready to do business, everything needs to be set up in order to welcome the public. You may also want to check out some examples of ordinary yet effective plans for more details.
3. Investigate other hotels, guest houses, and B and Bs in the area.
“How can you go to war when you do not or even understand your enemy?” In the same manner, do not even think about setting up a hotel if you yourself do not understand the competition of what is truly at stake.
Keep in mind that hotels are more than just rooms for guests to stay on a temporary basis, it is known to be their home away from home. If you want to have a fighting chance for your hotel to survive the great game, you have to be able to understand your competition and see what they have to offer the public. You may also check out on how to create an executive summary for a marketing plan for more insights.
- Find out what competitors charge.
- Read customer reviews online.
- Look at what local hotels offer besides rooms.
- Book a stay at some local hotels to really get a feel for what they offer.
4. Understand your primary market.
Who in the world are you trying to cater to out there? Who are your potential guests? Is it meant for the class A families and businessmen? Is it meant for the middle class? Or is it only restricted to a few number of guests who have to meet certain requirements to gain access to the hotel? You might also be interested to learn how to create a business plan.
What kind of audience are you planning to cater to? Unless you have a strong and definitive idea on who your target audience is going to be, your business is not going to last very long. The more you understand your target market better, the more time and resources you are going to have to fully dedicate all that you can to the needs and the wants of your guests and clients. You may also see examples of emergency plans.
5. Determine what extra services you’d like to offer with your hotel.
Humans are all the same. So, what makes each one of them different? For starters, there is the fact every person possesses a very different DNA (deoxyribonucleic acid) strand. That is why there are some people with long hair, brown eyes, dark skin, a flat nose. That is why there are also some people who have inborn diseases as well. You may also see how to make a business plan.
In the same manner, what makes your hotel different from the rest? Is it the cheaper or more expensive price? Is it the buffet lunch or dinner that can offer more choices than the rest and is still affordable at the same time?
Is it the branding of the hotel itself that makes it for a more renowned place? Is it because of the interior design or the decor? Or is it because of the amenities that are offered in the hotel that no other hotel has? If you think you can go the extra mile with what you can offer to the guests, then full steam ahead! You may also check out wedding plan examples.
The Business Plan for Your Hotel
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Managing Your Hotel Finances
1. Hire an accountant.
The first person you must absolutely hire before anything else is an accountant. Unless your hotel is very small or you’re a trained accountant yourself, you’ll probably need an accountant to help manage your finances. All hotels, even small ones, have many costs that you need to account for, like staffing, utilities, rent, taxes, and equipment, just to name a few. An accountant can help you navigate the complicated world of financing a hotel and help secure your financial future. You may also see more examples of business plans.
2. Draw up a business plan.
A good business plan is beneficial for you to organize your goals for your hotel and get a clear picture of how to make it a success.
- First up, you have to describe the services that the hotel will be offering to the public. How does this set you apart from other hotels in the area? Will you offer better rates? More personal service? Investors will want to see what makes your hotel unique. You may also see examples of action plans.
- Next up in your business plan is to explain on who your potential market is. Elaborate further on what demographic you are catering to, and as to the reason why they will pick your hotel over another.
- Finally, list down an estimation for your future earnings. Your investors will also want to see that your hotel will be profitable. With the help your newly-hired accountant, you can calculate what you expect your annual revenue to be. In that same accounting report, try to also state how long before you expect to start earning a profit, and where your hotel will be in the next several years. You may also like advertising plan examples & samples.
3. Acquire start-up capital.
Unfortunately, it is not love that makes the world go round. It is money. Money is power. Money is everything these days. And take note, money does not grow on trees. If it was that simple, everyone would be stinking rich.
However, if you do not have the necessary funds for how to construct your new hotel or even buy out the old one, then that is not really a problem as there is always a way to solve any problem that gets thrown your way as long as you have the will and the commitment to do so. You may also see sales plan examples.
First up, you can always get a loan from the bank. The bank is willing to loan you a certain amount of money just as long as you can pay it back in full with interest. But be careful once you start asking for a loan because once you cannot pay back what you owe the bank, you might just end up in a lot of trouble. You may also check out management plan examples.
- Another way is through private investors. These can be friends, family, or other business owners interested in making an investment. Make sure you define whether these people are just providing a loan that you will pay back with interest, or if they’re actually buying into your company. It would be helpful to draw up a contract defining the terms of your general agreement and having it notarized to prevent problems in the future.
4. Set your prices.
As mentioned before, money is everything these days. When you begin to set up prices not only for the rooms but also for the other services you are planning to offer, re-evaluate first as to whether what the hotel is offering is equal enough to the price range they are setting for that said service. You may also check out how a business plan can help small business owners.
The reasons that some hotels fail is simply because the prices were too expensive that not even their target market could afford it or it is simply too cheap that their expenses manage to outweigh their profit by tens of thousands of dollars even.
Make sure that the price you are setting up is enough to cope up with the incurred expenses. That $25 on a dinner buffet covers not only for the food, but also the utility bill and the labor cost of the chefs and waiters preparing your food. You may also check out event plan examples for more details in making plans.
5. Cut costs when necessary.
You do not only learn to cut costs on slow days, but you have to also cut them when you see that there are employees who are not doing what they are paid to do anymore.
Summer and winter are often the peak seasons for hotels, so you expect a lot of bookings from tourists all over who pay a visit to that wonderful country of yours. These seasons are often the busiest season for a hotel and would often need all staff and personnel to be in their A-game to be able to cater to the guest influx. You may also see daily plan examples & samples.
Weekdays are most often, if not, very slow days wherein not a lot of guests check in due to work and whatnot. When you have an idea on what your slow days are, make sure to designate the least number of staff for that day to save up on the payroll. If your hotel has numerous on-the-job trainees (OJTs), make use of them. You may also see weekly plan examples.
Components of Integrated Business Planning
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Managing the Hotel Staff
1. Hire all the necessary staff.
Considering that your hotel is nearing completion, now is the time to hire the necessary manpower you would need to actually run the hotel. If you have no idea on what kind of positions are needed in the hotel, you can always look it up on the Internet. You may also see project plan examples.
But the basic departments of every hotel are these: production (the one making the food), food and beverage (the waiters), the front desk (the bellboys and the ones in the front desk), housekeeping (the ones who clean the room), maintenance (the technical team), the accounting team, the sales and marketing team, etc. There can be more. For a big hotel, you would obviously need a lot of people. But it is not all the time that quantity is better than quality. Sometimes, quality of the staff personnel is simply enough. You may also see some examples of risk plans.
2. Investigate all your applicants.
If you are running a very small hotel, then there is absolutely no problem with checking the applicants yourself. But the bigger the hotel you are running, the more you realize that you cannot do everything on your own. Which is why you need to hire an excellent human resource manager who is able to tell good and loyal employees apart from the negative and bad employees.
Human resources are normally graduates of psychology, which means they have the ability to understand the human psyche better than most on whether they will become an asset or a liability. You may also refer to parenting plan examples for more details and insights.
3. Produce a manual for all employees.
Policy and doctrine keeps the world go round. Without law and order, everything would just plunge into chaos. By making some rules about how things should run, both the management and the staff should understand their position and their place in the hotel so that day-to-day operations would just run smoothly without any problems whatsoever. Manuals exist to remind employees on what kind of proper ethics they should exercise when working. You may also see annual plans examples.
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Marketing Your Hotel
1. Design a website.
In order to increase brand familiarity, it is important that your hotel must have its very own website. Having a website just shows what the hotel can offer to its guests and can also give a glimpse of the guest rooms and the facilities and the function rooms the hotel has equipped itself with. It is also more professional that way should the guest have any questions that he or she would like to ask about the hotel since it must also contain your contact number and email address. You may also check out examples of personal plans.
2. Place ads on travel sites like Expedia, Traveloka, or Hotels.com.
Some guests choose to book their nights by using the hotel’s website. While there are some who choose to do so using a travel agency. And since it is sometimes the case, it is often advisable that you learn to place your ads on those websites there. And since people spend an awful lot of time on the Internet, you can be sure that your advertisement will not go unnoticed to the eyes of the public. You may also check out on how to write up decent quality plans examples.
3. Leave brochures at rest stops on interstates.
Do not simply limit it to brochures. If you have the resources to go further, then do so. Understand the mediums your target market uses: whether it is through the newspaper, radio, or TV or simply through social media.
Think of this as something long-term. But sometimes, performance just speaks for itself as the word-of-mouth is simply one of the most powerful marketing tools ever known to man. You upset one wrong person by mistake, you might end up seeing your hotel and its reputation destroyed in an instant. You may also see examples of work plans.
4. Make sure all guests have a great experience.
To work in the hospitality industry means giving your very best to the guests and ensuring they feel right at home for a price, of course. Every need and want that the guest asks, you are there to serve it to them.
Sometimes, your customer service must go beyond the extra mile if it is to receive some kind of attention from the people. Overall, everyone who stays at your hotel must have a great and amazing time. You may also see job plan examples for more insight and details in drafting up a plan.
5. Cultivate repeat business.
Past guests who enjoyed their stay are a great source for future business. Besides showing them good service during their stay, there are several methods you can use to entice past guests to return. You may also see free business plan examples.
- Set up an email list.
- Reward repeat business by offering special deals to past guests.
- Respond to customer feedback.
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