If the apprenticeship in the hotel and catering trade was a while ago, many employees wake up the dream of their own existence in this area. Opening a hotel looks promising. However, those who do not deal sufficiently with this topic will sooner or later fall into the trap. Then the dream turns into a dilemma because the hotel industry is also about finances and success. Some aspects that those who want to found a company should not forget.
Finance: Hotels are expensive
Before opening your own hotel, you have to search for suitable rooms. A new building, however attractive it may appear, is often associated with high costs, legal pitfalls, and structural features. Building a hotel is not always a good idea right from the start. It can look better if an existing hotel is sold. There are many reasons for this, ranging from illness to divorce from a well-deserved retirement. But even then, buying a hotel easily lets seven-digit prices come up. Depending on the location and size of the hotel, buying is probably the biggest expense in life. If you have to invest a million euros or more and cannot look forward to a profit in the EuroJackpot, you have to put your finances to the test.
Of course, it is possible to obtain loans that help you buy a hotel. Here, however, banks are sometimes quite peculiar. One reason is likely to be the fact that some founders do not create a solid basis for their business and quickly find themselves in financial distress. In an emergency, the bank is left with the outstanding loan amount and the person concerned has to deal with bankruptcy. It is therefore only advisable to work out a detailed plan that not only includes the concept, but also a market analysis and the financial situation. Then banks can get a much better impression of the applicant’s risk profile.
It should not be forgotten that your own hotel takes care of expenses that are outside the purchase price. Costs for the renovation, personnel, service providers, and goods are important from the start. However, a stable influx of guests is not always guaranteed, especially during the early days. First, the house has to make a name for itself and satisfy guests. However, if you have financial worries in the back of your head and have to take savings measures in the first few weeks, you cannot concentrate one hundred percent on guest satisfaction. Therefore, the business plan should not only contain the acquisition costs, but also a list of current expenses and a forecast of income.
In addition to the bank loan, it can make a lot of sense to bring sufficient equity with you, to take advantage of government subsidies, and to get investors on board who contribute their capital to the start-up. At this point, it is worth contacting experienced start-up consultants who will use their expertise to show you further ways.
A good concept is essential
It is already clear that there is a huge gap between being an employee and being self-employed in the hotel industry. It takes a great sense of responsibility, perseverance, high motivation, and entrepreneurial skills to make your own business a lucrative livelihood. A solid concept must never be missing, which has to come before the financing.
The basis for this concept is a detailed market analysis. The region in which the hotel is located must be carefully examined about possible competition and the tourist situation. The annual overview of the German Tourism Association e.V. from 2017 provides initial information on tourism in Germany in general.
When considering the existing competition, it is crucial to also know their concepts. It is worthwhile to deliberately look for distinguishing features that can give your own house advantages. For example, if there are already several classic inns in the area, an organic hotel with a vegan offer and wellness area could be a welcome change and attract new customers. Of course, the niche you choose must also match your own values, interests, and convictions. A hotelier can only put together a good offer if he is familiar with this area and knows what his target group wants.
And if the concept is in its basic cornerstones, additional aspects should be taken into account. Travel times, for example, specific data about the tourist attraction of the location and the previous interests of travelers who come to the city help in planning events and special offers that are intended to attract guests.
Furniture as a comfort factor
Guests appreciate it when they feel warm and well in a hotel feel lifted. Opening a house is therefore only half the battle. Factors such as personal clothing, corporate philosophy, and the furnishing of the entire hotel play a decisive role here. Whoever opens an organic hotel shouldn’t use too much plastic and furnish rooms with natural wood and other environmentally friendly materials. When opening a design house for young people, completely different factors are at the fore. The taste preferences of the main target group should always serve as a guideline. This in turn can mean that the existing house has to be extensively renovated and refurbished. A point whose financial impact should not be missing in the business plan.
Besides, the legal framework for the interior design and management of the house is decisive. An overview from the Hamburg Chamber of Commerce provides good examples of this. Anyone who buys an existing hotel should, despite its many years of existence, carefully check whether all rooms meet the legal standards and, if necessary, retrofit.
Once all of this has happened, every detail has been taken into account and your hotel opens its doors for the first time, the work doesn’t end. Now it is time to advertise actively, create a solid marketing concept, make guests happy, and work together with suppliers and staff. After work, as it still existed as an employee, is hardly an option when you are self-employed as a hotelier. However, if you want to face your life’s work and stick to it with passion, you can make a name for yourself in today’s highly competitive market.