The hotel business is one of the most reliable sectors in the global economy and has high potential even in times of crisis. Its ability to function during a period of stagnation is often a determining factor in investment attractiveness.
The southern region of Ukraine is very favorable for starting your own business based on a tourist platform. The hotel business on the shores of the Black Sea traditionally brings high dividends to its owners. Of course, if it is correctly built from the very beginning.
Many subscribers of our blog in the feedback form ask the question: how to open your own hotel and what do you need? We tried to answer in a detailed and structured way.
Business planning: where to start
The business plan of the hotel is the first stage of developing any enterprise.
The development of a business plan for a hotel may include the following items:
- market analysis;
- creating an object concept;
- architectural sketch;
- calculation of investment amount;
- financial model;
Let's take a closer look at each item.
Before opening a hotel, it is necessary to study the market that the company will enter, according to such points of conjuncture:
- supply and demand;
- seasonal variations;
- the level of state regulation;
- prospects for the development of accommodation services.
Let's take a closer look at the competitive component. We highly recommend that you take a good look around and fix it in your business plan before pedaling your work processes:
- How many hotel facilities are located nearby?
- What kind of guest are they designed for?
- What loading volumes can withstand?
- What concept are they carrying?
- How do they differ from each other?
- What are they missing?
- What is missing for the guest in these hotels?
General concept of the hotel
In this example of a business plan, we have included the most popular formats of hospitality facilities among tourists:
- the traditional hotel: stay for couples and corporate clients;
- hostels: budget vacation for students or for a long time;
- hotel complexes: for families with children or large companies, with a wide range of services;
- capsule hotels: budget hotels with high-quality repairs;
- motels: budget facilities located near roads or large gas stations (while only entering the hospitality market in our country, but already very popular in the EU).
Basic location requirements:
- close location to airports, railway and bus stations,
- convenient transport interchange,
- availability of necessary infrastructure-cafes, restaurants, shopping and entertainment centers;
- availability of a private parking lot;
- possibility of redevelopment or exterior work;
- the building should not be an object of cultural or historical heritage.
The best option for a hotel building is a free-standing object, equipped with a parking lot and a well-maintained territory. Ribas Hotels Group is currently building a hotel like that in Bukovel — Ribas Karpaty.
The layout of the area of the object traditionally consists of:
- number of rooms;
- transit zones;
- technical premises;
- elevators for staff and guests;
- stairs for staff and guests.
If the building is already built, the necessary alterations are discussed and included in the business plan of the hotel.
Depending on the concept of the object and its territorial location, it may be necessary to add some additional functional units. For example: coworking spaces, restaurants, or banquet halls.
It is necessary to add that modern hotels take into account the recommendations of authoritative sources and make adjustments even in the layout of their premises.
A recent report by MMGY Global, the world's largest integrated marketing company that specializes in tourism, travel and hospitality, says that the portraits of tourists change every year. And the tourist of 2015 is radically different from the traveler of the last two years. One of the largest and most importantly solvent audiences — people from 25 to 35 years old (generation Y) - wants to go on vacation or explore other countries as a family, and not in pairs or by themselves.
For hotels that want to appeal to an audience like this, it brings some changes:
- extended rooms that can comfortably accommodate children or combined rooms that can accommodate parents;
- extended menu;
- breakfast in the room;
- additional services: swimming pool, electric cars, entertainment.
- signs "do not disturb, baby is sleeping", etc. frendly-details.
These adjustments should be made immediately in the business plan, as any changes to the project at any stage — design, construction-may entail additional financial investments.
— The amount of the investment for a single project is calculated at the stage of creating a general estimate, - says the head of the company's development department, Maria Turikova. — There are no general figures or universal patterns for calculating the object of hospitality in Ukraine. Therefore, we apply all our experience in the hotel industry and take into account many factors related to the object: location, proximity to resorts or business centers, passenger traffic, competitive market share, and much more. And then we describe a detailed financial model, which includes:
- purchase of land;
- landscaping of the territory;
- equipment of the rooms;
- restaurant equipment (if any);
- the first tranche for initial work.
Of course, the most capacious item of expenditure is construction — about 55-57% of the total cost. In second place — the purchase of land. If the plot is already there (and it often happens in reality: when you first buy land in a recreational area, and then decide to build an hotel there), these costs are not being planned.
Staff is being hired depending on the format of the hospitality facility.
According to the recommendations of the World Tourism Organization, the number of employees varies according to this scheme:
- minimum staff — 4 people;
- 3* hotel — from 8 employees;
- 4* hotel — from 12 people;
- 5* hotel — from 20 specialists.
Promotion and marketing of the hotel
Promotion is rarely included in the content plan. And if it is, it usually gets the least attention. Although the work to promote the future facility must begin six months before its actual launch.
So, in the "Marketing and promotion" section of the hotel business plan, you should include the following items:
- creating a corporate identity and key brand attributes;
- advertising on outdoor media: billboards, magazines, etc.;
- placement on online booking sites: booking, tripadvisor, hotel 24, etc.;
- cooperation with tour operators;
- online advertising: smm, on forums, contextual advertising;
- discounts and promotions.
Detailed information about the organization of marketing and sales services at the hotel can be found on the page - https://ribashotelsgroup.ua/en/hotel-promotion/
A professionally drawn up business plan of the hotel helps to achieve high performance not only if the project is only at the start of creation. Among the cases of the management company, there are examples when a well-written document with leading specialists brought measurable results in just 12 months of work. More information about the Bossfor Hotel case can be found here.
Our specialists will conduct all of the above research and help you create a business plan to start your business.