It’s preposterous to open a business and operate it without a well-planned and well-written business plan. This is most especially important for a complex and competitive industry such as a hotel-based business. The business plan is the business owner’s roadmap on how to operate the different aspects of their business, what they want to achieve, and what financial, sales, and marketing conditions their business is in currently. However, creating a business plan is a big task that can be frustrating at times and some business owners give up because of it. It is important to remember that making a business plan can be a key to a business’s success; it is a requirement to propose investment opportunities to investors or screen your current business goals. If you need to create a business plan, this article will talk about how to create a hotel business plan.
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What is a Business Plan?
A business plan is a written document that comprehensively describes how a business defines its objectives and outlines its methods of achieving them. It also serves as a roadmap for the business’s marketing, financial, and operational point of view. Business plans are usually a must-have for startups to give them a clear idea of how they want to run the business and where they want to go.
Details to Include in a Hotel Business Plan
1. Executive Summary
The executive summary sums up the entirety of the business plan. However, you can also use this part to highlight the two most important aspects of your business that motivates you to continue doing your operations:
- Mission statement: A one-line description explains why your hotel is in business, what needs you want to solve for your visions for your company to come true.
- Objectives statement: This outlines what you hope to accomplish in a certain timeline.
2. Company Analysis
Give more information about your hotel’s history, the services and perks you offer, and your unique selling points that make you stand out from your competitors.
3. Industry Analysis
Include the information you’ve gathered on the current industry trends and state of the market and how these factors will impact your hotel’s business. If you’re using the business plan as a proposal to investors, including this section is important so they can see how you understand the hotel industry. Knowing these factors is a keynote of making important decisions for your hotel.
4. Customer Analysis
You also need to include this section to show the important information you’ve gathered about your target market such as their geographic, demographic, socioeconomic, psychographic, and behavioral segmentation details. This will help explain what types of guests will mostly stay at your hotel. You can segway on explaining which features will be meeting the needs and wants of the target market with location, amenities, and services.
5. Competitive Analysis
Include also the research you’ve conducted about your competition with each of their strengths, weaknesses, occupancy rates, and market share. You can do this by making a SWOT analysis. Don’t forget to include details on what makes you different or stand out from them.
6. Strategic Plan
Your strategic plan should consist of the following:
- Marketing: Include details on how exactly you will attract guests, what message will you use for your marketing and promotion methods, what resources and channels will you use for marketing and promotion, etc.
- Distribution: What 3rd party channels will you use and what technology will you need to do this effectively?
- Revenue management: What pricing techniques will you use for your amenities and services? What will your payment and cancellation policies be? Which room types will you be selling, and how will they be marketed? Where can you compensate income or demand streams when necessary?
7. Operations Plan
Your operations plan is where you out on how you will run your hotel? Include the following elements in this plan:
- The number of staff and supervisors you need
- The job descriptions of your staff and management
- Work experience and career background of the staff and management
- The service standards
- Manual guidebook
- Details of the suppliers
- Inventory management
Don’t forget to also describe the management style of your hotel business. You can also state what uniquely qualifies you to make your hotel a success.
8. Financial Plan
Provide the start-up costs and capital investments of your hotel, the ongoing business costs, operational expenses, and revenue projections for the next five years.
How much profit does a hotel make per room?
The monthly average revenue per available room in 2020 was around 36 U.S. dollars for hotels in the United States.
How much does it cost to run a hotel?
The cost to open a small hotel in the United States is around $1,000,000. The cost could even go higher than a million dollars.
Once you’re done writing your business plan, review it and revise any errors that you found. Errors such as grammar, spelling, and inaccurate information should be removed. If you find the task quite overwhelming, ask help from a colleague to help you write the business plan. You can also let the rest of your employees read the business plan so you can ask for suggestions on how you can improve it. Because no investor or lender will be interested in your hotel business if you cannot present a clear plan to them. To help you get started making the business plan, download our free sample templates above to use as your guide!
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