The hospitality industry can be a very profitable business to be in, with the average revenue per available room in the US hotel industry being $85.96 in 2018. However, it is also an industry that requires a lot of knowledge and there are numerous laws and regulations that must be complied with. If you are considering starting a small boutique hotel business then these five tips should help to plan your business model:
1. Research the laws and regulations
Before making the decision to buy or lease premises for your boutique hotel, do your research regarding all of the legal responsibilities that this entails. From fire safety requirements to food hygiene standards, there are plenty of regulations you will need to get up to speed with. You might need to enroll on courses to gain relevant certification if you do not already have the required ones. Insurance is another important requirement, such as taking out general liability insurance for small business to protect your business from any costs related to accidents involving guests.
2. Find the right premises
Boutique hotels need to offer a quirky alternative to large hotel chains, so finding the right building and surrounding land is really important. However, you must also factor in how many hotel rooms you can create, to work out the financial forecasting. You will also be looking for premises that do not require expensive restructural work, as this is where the development costs quickly build up, with typical costs of remodeling a standard hotel amounting to $800,000.
3. Market research
When you have found the right premises, you will also need to do your market research. This will involve researching the local hotels in that area, working out whether there will be enough demand for a boutique hotel in that area. If the location is popular for tourism, or close to a business district then you will see where your customer base will be generated. You can use online booking websites to check the percentage of local hotel occupancy to give you a better idea of what to expect.
4. Invest in your marketing
A strong marketing plan is necessary to ensure that you attract customers on a regular basis. Most hotels become affiliates of hotel booking websites like Booking.com and other popular travel websites to generate more business. Your guests need to be able to find you and the first place they are likely to look will be on these types of websites. Having a professional hotel website and interactive social media accounts are also good marketing techniques that you should invest in.
5. Build a team of hardworking employees
In the hospitality industry, reputation is very important. Bad reviews on Tripadvisor related to rude staff, or poor cleanliness will hit your business very hard, so when you are recruiting, prioritize employing hard workers. It takes a combination of skills to be good hotel employees, including good customer service, professionalism and teamwork.
As well as these five tips, it is important to stay informed about industry changes and make your hotel an attractive place for your best employees to want to stay for many years.