Realising your dream to start your very own successful hotel business is an exciting prospect. But with so many people simply adding their properties to Airbnb, now more than ever you need to stand out from the crowd with a strategic hotel business plan.
With over 10,594 hotels across the UK as of 2021, it is clear that the hotel dream is alive and thriving and has huge revenue potential.
The hotel industry has generated billions of pounds of revenue in the UK over the last four years, so we know that there is huge potential. But where do you start?
The first step is to create a new hotel business plan to get the financial support and strategy you need to succeed.
Our guide takes you through various steps, such as how to understand the sales and marketing strategy, pricing structure, directorship and management.
There is a lot to think about and fortunately, our hotel business plan provides the ideal road map for success.
Whilst there is certainly a very high potential for substantial growth and revenue in the hotel industry, competition is high. With the industry forecast to bounce back and grow over the next five years, this is an attractive entrepreneurial endeavour.
Firstly, you need to create a thorough new hotel business plan which can be used as a platform to gather all of your ideas and findings and start collating your resources.
The average start-up costs to open a hotel in the UK vary considerably, depending on a variety of aspects such as location, quality (will your hotel be luxury?) and size. This is assuming that you will be buying a property and not building one from scratch.
In addition to this, other costs such as furnishing the hotel, employing staff and insurance policies all add up.
A hotel business plan offers the perfect way to track and prepare for any financial situations from the very beginning of your journey. With effective business planning, we’ll help you figure out how to raise capital for your business based on your current financial situation.
If you choose to secure funds from a bank, then a thorough business plan is integral to your proposal.
In addition to this you’ll also receive over 25 ways to market your hotel for free!
Let’s dive into an example of a hotel business plan in 8 steps. This can be used as a guide for your own business plan.
If you intend to secure funds from the bank, a thorough business plan can help you prepare for any eventuality.
Consider writing your executive summary last so that you are confident with every aspect of your hotel business proposal beforehand.
Remember, this is your moment, you want them to be convinced before they’ve even read the full proposal.
This is where you dive further into information about yourself, your business and your key stakeholders. This is the perfect opportunity to provide insight into who you are and what you want your hotel to offer.
With every section you create ask yourself: why would investors consider putting money into my dream hotel?
Show that you are an expert in the hotel industry. Highlight not only your existing knowledge but also your plans for the future.
You want to over deliver and wow potential investors. Be prepared with facts and figures to support every claim.
This doesn’t need to be overwhelming, all of this is available in our hotel business plan available for instant download.
All of the answers are at your fingertips.
Take the time to seriously consider the management and key team players in your hotel. This is the time to show that your endeavour has real potential and is more than just a dream.
Create short bios about these members including who they are, what their role will be and a short section on their previous experience and suitability for the position.
Remember that investors will scrutinise the people in your business, so if possible, avoid relying on family and friends for these vital roles.
Before you make any decision you need to get really clear on who your competitors are and who your target audience is. You also need to have a thorough understanding of the hotel industry, both socially and economically.
Not only does this frame you as an expert to potential investors, but it also keeps you ahead of the game in the industry.
Who’s going to visit your hotel?
Get specific about your ideal guest. Explain exactly who they are. You can even create a bio or avatar for this ideal client so that you really get to know them. Give them a name, divulge into their likes and dislikes, their job, their hobbies, even their marital status.
Put yourself into your ideal guests shoes and ask yourself if your hotel is offering exactly what they need. Are you answering any pain points?
Do they need somewhere that is family friendly and within walking distance of the seashore?
Or do they need somewhere quiet and close to easy transport links the night before a big business meeting? Identify the pain points and then solve them.
Prove to potential investors that there is space for your dream hotel, even in this already saturated market.
When it comes to business objectives you will need to think in both the long and short term.
As well as how you intend to achieve them.
This is your opportunity to show that your hotel has real potential for success and growth.
Use the S.M.A.R.T criteria to create your business objectives to improve the chances of them being successful.
Show your potential investors that you have clear aims and that you know exactly how to achieve them.
It’s important to detail exactly how many rooms you intend to have available within your hotel. In addition to this, what amenities each hotel room will have.
This is a good opportunity for potential investors to gauge the size of your new business and roughly how much funding you might require.
There is plenty to consider here and this will depend on your hotel niche. Of course if you have a specific theme or a unique aspect to your hotel, there will be costs attached to this. So include that in this section of your hotel business plan.
Next consider what other amenities your hotel is going to offer?
In such a saturated market, you need to offer more than just a room for the night. What is unique about your hotel that will make guests want to return time and time again?
This is always the most integral part of the hotel business proposal. It is during this section that you lay out your finances for potential investors to assess your financial situation. Be honest, be clear and be concise.
Remember, investors are driven by return on investment (ROI) and avoiding risk.
In addition to this, you will also want to outline some cost estimations. This will of course depend on what you are offering, but nevertheless, be thorough in this section to show that you have covered all bases.
Be sure to be as in-depth and thorough as you can be at this time. Remember that your financial forecast can change, and perhaps other opportunities will arise that will provide more than one source of income.
Don’t let this section intimidate you. Be as accurate as you can be, and clearly show your data supported by your research and experiences.
Download our hotel business plan below for instant access to your roadmap for success and guidance through these financial sections.
Now that you have outlined your hotel business proposal, the final step is to show your potential investors where your initial start-up capital is coming from.
Are you funding your hotel with your own cash? Or do you have investment from another source? Your potential investors will need to know exactly how much start-up capital you have and where it comes from. They will also need to know how much you still need to raise.
It is really important to be completely honest within your hotel business plan, particularly in this section. If potential investors find any red flags they are unlikely to give your application a second thought.
Be clear about where your start up capital is coming from, how much you need to borrow to get started, and if you’ve been rejected from any other previous applications in the past.
We’ve created a completely free Word document template with an example hotel business plan for you to use for guidance.
Starting your own business can be an exciting but daunting endeavour. The hotel industry has faced more struggles than most others during the pandemic.
However, the light has started to shine on this industry again, and it has been forecast to grow over the upcoming five years. With this in mind, now is the perfect time to embark on your hotel journey.
Whether you are looking for an initial small hotel business plan, or if you intend to expand and grow into an international hotel chain, it all begins with this very first hotel business proposal.
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