As with any business, its success often depends on how well the preliminary work—including its establishment, planning, and development—was carried out. This is because there are various factors to consider when starting a hotel business.
Although the process may vary by country—depending on whether the hotel will be established as a partnership, by an individual, etc.—these are the most common steps for starting a hotel business. They will give you an idea of the path to follow to get your own hotel up and running.
Table of Contents
1. Define Your Market
A common mistake when planning to open a hotel is to think first about the hotel and then about the market to which we will sell the accommodations. According to experts, the process should be the other way around—that is, first define the market’s needs and then build your business around the solutions they require.
That’s why the first step in starting a hotel business should be to define your target market. There are many options, ranging from families traveling with children to backpackers, luxury travelers, seniors, and solo travelers.
2. Develop your hotel’s concept and its unique selling points
Once you’ve defined your market, it’s time to determine the solutions you’ll offer to that market. For example, if you’ve decided to focus on a market that prefers ecotourism and nature, then you can focus on creating an eco-friendly and sustainable hotel.
Based on your hotel’s concept, you can focus on the unique features that will help you stand out from other hotels. Perhaps by building your hotel with recycled materials, using clean energy, recycling water, or growing your own food.
3. Design Your Brand
Once you have a clear idea of who your hotel’s target audience will be and what its concept will be, the next step is to develop your brand. In fact, this is one of the most important steps in starting a hotel business, since the brand will determine the position your hotel can achieve in travelers’ minds.
Working on branding involves finding the best name for your hotel, designing the logo, and creating the corporate image. Having a strong brand will help you gain recognition and visibility in the market, which translates into customers.
4. Develop Your Business Plan
Another essential step in starting a hotel business that you can’t skip is creating a business plan. In it, you’ll not only establish your hotel’s business model—that is, how you’ll generate revenue—but you’ll also define aspects such as expenses, costs, human resources, financial projections, sales projections, and more.
Essentially, the business plan is the document that brings together everything about your hotel. It outlines the key strategies and processes for running it. In addition, a business plan is often a key requirement when seeking financing or investment.
5. Legally Incorporate Your Business
To ensure the legality and operational viability of your business, it is important that you legally incorporate your company. This will depend on the country where you are located; for example, business corporations in Spain are not incorporated in exactly the same way as in other countries.
The process you follow will depend on the type of business entity you choose. Having your company legally incorporated will also help you when you’re seeking financing or investment. This is because a legally incorporated company provides greater security and instills greater confidence.
6. Complete the procedures for licenses and permits
In addition to incorporating your company, you must also complete the necessary procedures to obtain the licenses and permits required to operate. Remember that failing to have these documents can result in fines or the closure of your hotel.
As we mentioned in our blog post on licenses and permits, the most common procedures to complete are:
- Operating license.
- Land-use permit.
- Civil protection permit.
- Health registration.
In addition, you should keep in mind that additional permits may be required—for example, if you own a restaurant, bar, beach area, or store. It’s best to review the specific circumstances of each hotel to ensure compliance with regulations.
7. Prepare to Start Operating
With all the behind-the-scenes work complete, the next step in starting a hotel business is to get everything ready to begin operations. This includes working directly on the hotel—whether that means building it from scratch or remodeling and adapting the property for its intended use.
Once the hotel is ready, the marketing and sales department must step in. This is to generate awareness, recognition, and brand positioning, with the goal of attracting travelers and beginning to sell reservations and services as soon as possible.
8. Open your hotel!
The final step in starting a hotel business is the most rewarding. This is when you’ll see all your hard work ready to go. However, before opening your hotel, it’s important to keep a few key points in mind. For example, launching promotions that help you quickly attract guests, even if it means sacrificing a little profit.
In the beginning, it’s important to focus on growth and reinvestment. This will help you establish the hotel and address those small details, as well as any unforeseen issues that may arise along the way. By doing so, you’ll ensure the stability of your hotel in the short, medium, and long term.
9. At IHCS, we help you through the steps of starting a hotel business
We know that following each of these steps to start a hotel business can be overwhelming. Especially when the statistics on the number of hotels worldwide and just how competitive the market is—all of which put even more pressure on you to ensure your hotel’s success.
At IHCS, we’ll help you take every step needed to build a solid, profitable, and strong hotel business. We’ll guide you and, drawing on all our experience, infrastructure, and team, support you in overcoming any obstacle—even the unexpected. Just contact us to find out how we can help you start your own hotel business.
