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How much does it cost to set up a small hotel?

How much does it cost to set up a small hotel?

You are asking yourself, I want to set up a small hotel, but how much will it cost me? Even if it is small, the investment will be big? Well, in that case I welcome you as a future investor and dreamer of the hotel sector! I will give you the keys so that this […]

You are asking yourself, I want to set up a small hotel, but how much will it cost me? Even if it is small, the investment will be big?

Well, in that case I welcome you as a future investor and dreamer of the hotel sector! I will give you the keys so that this financial decision does not represent any headache for you.

On the contrary, I will show you the costs and challenges so that you can take note of the most important points of this investment. Sit back and get ready for a journey full of possibilities.

 

Your Hotel Dream Starts with an Idea

Before we get down to the nitty gritty and wrestle with numbers and architectural plans, you need to have a clear vision.

What kind of experience do you want to offer your guests? Will it be your boutique hotel in a rural setting or an urban oasis for the modern adventurer?

Define your niche and create a unique proposition that sets you apart from the competition. The essence of the hotel, from its theme to its atmosphere, is the soul that will capture the attention of travellers.

And above all, you have to be comfortable with that proposition. For example, if you are not a vegan and do not intend to become one, do not create a hotel dedicated exclusively to this sector of the population.

 

Research and Plan

Once you have the idea, before you lay the first brick, you need to understand the terrain you are entering. Market research is key. Study the current and future demand for accommodation in the area, analyse the competition to identify opportunities and challenges, and determine the rate you will set without scaring away potential guests.

This process is like mapping before a trip. It helps you anticipate curves and detours, increasing your chances of reaching your destination successfully.

So far, you can see that setting up a hotel has cost you little or nothing. In these first 2 phases it is important to count on the collaboration of an expert in the field to speed up the time as well as to have a more objective vision of the moment.

That is why IHCS invites you to consult us to offer you specific advice on the costs that this investment will entail.

 

Land and Construction

Selecting the right location for your hotel is critical. The location should be strategic, considering accessibility, local attraction and security. Assess whether improvements to the surrounding infrastructure are necessary and take into account local regulations. Once you have the land, the construction phase begins.

Work with a team of architects and builders who share your vision. Make sure the hotel design is not only aesthetically appealing, but also functional and efficient.

During this process, every brick is a piece that contributes to the creation of your hotel dream. Construction is not just about erecting structures, it is about shaping the experience you will offer your future guests.

This phase is where the difference between building a small hotel at a good price and having the prices skyrocket.

The first step is to find a plot of land at a price m² that is affordable for your investment. And secondly that the construction does not involve excessive costs.

In this case, these costs must always be taken into account from a comparative point of view. In other words, you have to compare your land purchase and construction costs with the competition.

You have to ask yourself questions like, I am building in the centre of Madrid, I know that the m² is expensive, but am I paying above market or below market? I know that building in the mountains is going to cost me extra in logistics, can I assume those extra payments, and is the project still profitable?

 

Decoration and Equipment

Imagine your hotel as a work of art in constant evolution. The decoration and furnishings are the brushes and colour palettes that will give life to every corner. Decide on a style consistent with the identity of your hotel and think about every detail: from the colour palette to the choice of materials.

Will your hotel be modern and minimalist, or do you prefer a rustic and cosy charm? Investing in quality furnishings and unique decorative elements will contribute to creating an unforgettable experience for your guests.

The magic behind a hassle-free stay lies in well-chosen technology and equipment. Invest in comfortable beds, quality linens and essentials for guest comfort.

Investment in technology is not an expense, it is an investment towards operational efficiency and long-term guest satisfaction.

And finally we come to the part where the numbers become the orchestra that drives the success of your hotel. Financial management is like keeping the accounts for a trip. Prepare a detailed budget that covers everything from construction to day-to-day operation.

Consider up-front costs and make sure you have a financial back-up to deal with unforeseen events. Don’t underestimate the importance of accurate and regular bookkeeping, as it will give you a clear picture of the financial health of your project.

Setting up a small hotel is an exciting journey, where investment is mixed with creativity and dedication. From the conception of the idea to welcoming the first guest, each step is an achievement in itself. So go ahead, brave investors, and may this hotel journey lead you to build something truly special. Bon voyage!

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