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Aspects to assess in a business model for a new hotel

Aspects to assess in a business model for a new hotel

In business activity, the construction of a business model is presented as a necessity and requirement to determine a higher level of certainty when making an investment. The hotel industry is the essential resource that makes up the tourist offer of a destination, in such a way that it is the offer of accommodation and […]

In business activity, the construction of a business model is presented as a necessity and requirement to determine a higher level of certainty when making an investment.

The hotel industry is the essential resource that makes up the tourist offer of a destination, in such a way that it is the offer of accommodation and hotels, which determines whether it is a tourist destination or not depending on the volume of accommodation and use. that it has this offer since it is the main factor of the tourist economy.
A hotel business model is the way a hotel creates, delivers and captures value. To create our business model we start from the idea of whether this project will be profitable for us. The entrepreneurs themselves need training, financing, investors… and a great team to help us in all departments.

Must take into account:

SECTOR DATA

Given the strategic importance of tourism, one of the best-known indicators is hotel occupancy. In this business plan we have considered the opening of a traditional hotel, and therefore the data that interests us does not include hostels or rural houses.

MARKET STUDIES

Before thinking about opening a new hotel, it is essential to study the competition in the area. The data observed provide interesting references of the most suitable provinces for a new establishment.

DIFFERENTIAL FACTORS

Hotels have many possibilities to differentiate themselves from their competitors. You can offer innovative and practical services, apply low-cost or, on the contrary, luxury strategies, bet on good cuisine or an unrepeatable view, the important thing being to offer something different from what is already offered, and of course something valuable, that makes customers prefer this establishment to any other in the same area.

SALES ESTIMATE

To have an idea of the sales of a hotel project, we must differentiate three large categories of income: room rentals, restaurants and extra services.
Estimating income from room rentals can be done by estimating an occupancy rate, which in turn gives us a number of travelers, which can be multiplied by the average price of a room per person.
For catering services, if breakfast is not included in the room prices, it would be necessary to estimate the percentage of travelers who would take it. The annexed services can be estimated based on a percentage of consumption by travelers.

INVESTMENT AND FINANCING

A hotel usually represents a very significant investment and external financing may be required. There is the possibility of renting or buying, but in general, it is such a specific business and with so many investments in works to prepare the rooms that a very long-term rental or directly buying the building is reasonable. On the other hand, it is important to include all the operational material of the different departments as part of this initial investment.
The amount of the investment is highly variable, depending on real estate prices in the area and especially the size of the establishment. In addition to the building, you must have an investment in furniture and IT, not counting cleaning tools and other necessary elements.

ESTIMATION OF EXPENSES AND COSTS

Apart from the amortization of the facilities, the main expenses of a hotel are staff (reception, cleaning, bar, restaurant), rent (if it is not a owned building), supplies (electricity, water), exterior services ( insurance, management, cleaning of towels and sheets, etc.). Obviously, at the beginning it will be necessary to take into account opening expenses such as licenses, advertising campaign, etc. in addition to all the operational material.
You must also take into account all the costs associated with the sale of restaurant products and services.

OTHER ASPECTS TO ASSESS IN A  HOTEL BUSINESS MODEL

In terms of tourism, it is important to consider that Internet positioning is strategic, since by definition, the people who come to a hotel do not live on the site, and their main source of information is the Internet.

WHAT ARE THE MOST COMMON HOTEL BUSINESS MODELS?

Finding the best hotel business model for your needs will ensure that you maximise your benefits. Here, we will show you the most common hotel operationg business models:

  • Owner-operated hotel business: the owner manages the hotel business.
  • Franchised hotel business: one of the most popular ways of running a hospitality business.
  • Brand-owned hotel business: hotel franchised through a brand name. It allows you to get immediate recognition.
  • Strata Title hotel business: here, property investors can individual units instead of the whole hotel. It is generally the first step into owning a hotel business.
  • Managed hotel business: any type of hospitality business with a managed structure.
  • Leased hotel business: renting out the property and taking control of the company.

So, if you are thinking about designing your business model and need to carry out your hotel project, we can help you.
Do not hesitate to get in touch at info@ihcshotelconsulting.com.

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