When the pandemic first hit in 2020, the hotel and tourism space was one of the first industries to be severely hit. However, it slowly regained its lost essence during the two years since then. In 2023, however, this is only poised to move even faster. As domestic tourism and international arrivals pick up, the country is again set to see high activity levels in this space. Furthermore, with the G20 happening across various cities in India throughout the year, the scope of tourism is massive.
This presents an excellent opportunity for people who want to start a hotel business in India. So if you’re thinking of how to get started, we give you tips on building a hotel business plan to begin your journey as a hotelier.
Steps to start a hotel business in India
1. Create a long-term strategy
As a hotel is a traditional business, you must determine a long-term strategy. As initial investments are high and physical assets are involved, such as real estate and furniture, breaking even can take a while. This is why your hotel business plan must be for the next five years.
The five-year plan must include several facets of your hotel operations. They can consist of elements like future goals, barriers to entry, competitor SWOT analysis, and more. This will give you an overview of what you’re trying to accomplish and help you reach out to potential investors or partners who need information.
A reliable long-term strategy sets a strong foundation for your business, while you can make tweaks depending on the current situation or market changes.
2. Dig deep into the analysis
New hotels are popping up daily in different cities in India. This is why it is a good idea to see how well you’re faring. Besides, when competing with massive hotel chains, you need to identify where and how you can make an impact.
For instance, if there are hotels scheduled to open in your area, you can analyse them to see what audiences they cater to. Would it be a business segment or leisure? Would it be a 3-star property or a 5-star one? By digging deep into analysis, you can better understand your immediate competition.
Furthermore, this allows you to create backup plans for situations where you’re entirely blocked. Thus, a deep industry analysis should be a part of your hotel business plan.
3. Know your target market
As every hotel caters to a different market segment, you must also find your target audience. Catering to a more specific audience rather than a generalised one can be beneficial, allowing you to make the most of your investments.
For instance, if you’re targeting a millennial crowd in the domestic market segment, you can identify the services or amenities they look forward to during their stay. For example, high-speed WiFi, sustainable practices, flexible workspaces, etc. By providing personalised experiences to your target market, you have a higher chance of growing your business.
4. Sort your finances
Running a hotel needs a lot of cash in the short term. Therefore, you must be able to manage your finances well. If you’re running short of working capital or need funds to start your hotel, you must look for a trustable source.
5. Recruit wisely
Your workforce is the leading driver of your business. Thus, investing in your people is one of the most significant investments you can make. As your hotel will run 24 hours, you need to account for variable pay, good scheduling, and backup staff.
6. Market your business
You must push your name out in the market as a new brand. For people to know you exist and to find you reliable, you need a solid marketing strategy for your business.
Traditional marketing involves the marketing mix which covers the different “Ps” of your business. This includes product, price, place, promotion, people, process, and physical evidence.
For your business, this can be the following:
Product - The hotel you’re marketing
Price - The different pricing segments for your rooms, your food menu, other services, etc.
Place - The location of your hotel
Promotion - The experience you plan on providing
People - Your target audience
Process - Your unique value proposition and how you plan on providing services
Physical Evidence - Speaks about the quality of your experience. For instance, the quality of the rooms you provide
7. Streamline your operations
Streamlining daily hotel operations like managing reservations, accompanying guests to their rooms, handling checkouts, etc., can help you make these processes and tasks more efficient. It also enables you to reduce operational costs, improve guest experience, and increase profitability.
A few simple ways to achieve this include using hotel management software to automate tasks, training your staff, monitoring business performance to identify areas of improvement, outsourcing non-core functions, etc.
Start your hotel business with Tata Capital
Before you plan to start a hotel, creating a step-by-step plan can significantly increase your chances of success. You can grow your hotel to new heights through careful planning and meticulous attention to detail.Tata Capital lets you achieve this dream by taking care of your finances. With fast processing times and attractive interest rates, we are your trusted partner as you embark on this new journey. Apply online for a business loan today.
31 March 2023
5 mins read
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