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Hotel Business Plan

OK, so you have decided to realize your dream and become a hotel entrepreneur, so now you need to start writing your hotel business plan . You have thought out an amazing concept delivering unparalleled guest service. The next step would be to write a hotel business plan. It’s like a road map to the opening. However, as a seasoned hotel revenue management consulting and hotel management company , we have seen that this is where most entrepreneurs get stuck.

Why? Many do not have the time and don’t know what to write or how to do the financials. But until you finish your business plan, you will not be able to get the financing either. So you end up with ideas sitting in your head not realizing your dream.

Really it is not that difficult to make a good hotel business plan. It is merely a structured summary of your idea. Most people try to include everything about their hotel concept in the plan. This leads to an indigestible super novel-like bookwork, aka a mess.

The key is, knowing what to include, and what not to include in your hotel business plan. Create a clear road map for success. Excite investors rather than bore them to death like most business plans full of redundant information do. And you need to lead readers down the exact path you want.

One of the main challenges for example is that after reading the first page most businesses often don’t fully understand what the hotel is all about. For investors and lenders, it is crucial they can quickly comprehend your plan, without reading the whole document.

Hotels 101: The Basics of Business Planning

We have put together a hotel business plan template to help you on your way. Check out our approach based on 10 critical points, being:

• Executive Summary
• Company Analysis
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Strategic Plan
• Operations Plan
• Management Team
• Financial Plan
• Key Milestones

Steps of your Hotel Business Plan

Let’s dive into the step-by-step checklist of what your hotel business plan should look like.

Infographic by Xotels

1. Executive Summary

This first part should consist of two main parts, being:

• Mission Statement (Introduction): a 1 line company description only the essence of your hotel (not 2 lines or a paragraph). It explains why you are in business or which huge need you are solving, that currently is not being met. For example in the case of Qbic Hotels “Moving modular hotels into under-utilized real-estate to reduce build-out cost and time.” 
• Objectives : What do you hope to accomplish (i.e. “Reach an annual occupancy of 90%”).

 2. Company Analysis

More detailed information on the USPs (unique selling points) of your hotel concept.

3. Industry Analysis

Information on the current industry trends and the current state of the market and how this will impact your hotel. This is needed as investors want to be sure you really understand the hotel industry. This acts as the foundation on which decisions such as trends and developments to follow will be based.  

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4. Customer Analysis

In-depth information on your target market, including geographic, demographic, socioeconomic, psychographic, and behavioural segmentation details. It can also help you to keep up to date with the latest hotel marketing trends to understand which are the types of guests who will be staying at your hotel. Explain which features will be meeting the needs and wants of these main segments when thinking of:

Basically, how will consumers answer this question ‘Why my hotel?’

Aim to break it up to the point value can be easily communicated (do not make it too overcomplicated). Think of the following examples:

• Psychographics: interests, lifestyles, personality, values, opinions, and attitudes
• Behavioural segmentation: purchasing behaviour, level of engagement, customer loyalty
• Demographics: gender, age, marital status and education
• Geographics: location (country, state, region, city)
• Socio-economics

Any of the above examples of hotel segmentation can, if described well, be of great value to your business plan. An example of this could be a hotel located in a beach town, where you should be able to describe how demographics and psychographics differ from summer to winter time. Especially, since this example is typically known for lower demand in winter which you could be compensating for with the right hotel marketing strategies on hand.

5. Competitive Analysis

A study of your local competition or global concept competitors, with each of their strengths, weaknesses, occupancy rates and market share ( SWOT analysis ). And don’t forget the most important part; what differentiates you from them. What makes you stand out?

Ask yourself: “can I add value to a specific area”, especially when it comes to hotel-dense areas like city centres or major destinations.

6. Strategic Plan

This exists of 3 parts:

• Marketing : How exactly will you attract customers/guests? How will you position yourself? What will your message be to the different segments of your business mix? How will your direct marketing work? What will be the plan for your hotel website, SEO, SEM and SMM? Will you do offline promotion? In short, your hotel marketing strategy should cover everything there is to know about how to market your hotel.
• Distribution : Which 3rd party channels will you use and how will you manage availability? What technology will you need?
• Revenue management : What pricing and yield techniques will you use? What will your payment and cancellation policies be? Which room types will you be selling, and how will they be individually marketed? How many revenue scenarios will I create? Where can I compensate income/demand streams when necessary?

Make sure you have the capabilities to plan out a strong marketing, distribution and revenue management strategy. 

Things get complicated rather fast, and choosing to outsource hotel and revenue management is likely to give you a strategic advantage, during the planning phase, and the execution of your business plans.

7. Operations Plan

How will you run your hotel? Think of the following elements:

• How many staff and supervisors will you need? 
• What are their job descriptions/responsibilities? 
• What background and experience should they have? 
• When should they start? 
• What are your service standards?
• Will you develop manuals?
• Which supplier will you use?
• How will you manage inventory?

8. Management Team

Include the bios of your team. Focus on what uniquely qualifies you to make your hotel such a success. Having a great team is the key to success , and stakeholders will be impressed with a thorough explanation of the added value everyone brings to the table.

9. Financial Plan

Provide the start-up costs of the hotel (capital investment), the ongoing business costs, operational expenses and revenue projections for the next five years. These figures should be always based on your Hotel Feasibility Study . The KPIs to look at include expected occupancy, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room).

If you are raising money , outline how much funding will be needed and when. Explain how you will generate a return on investment for investors, or when lenders will be paid back.

10. Key Milestones

These are the most important achievements which once they have been completed, will make your hotel more likely to succeed. Think off:

• Location selection
• Permits & Licenses
• Build-out / Construction of the Hotel
• Staffing and Training
• GOP Break-even
• NOI Break-even

Each time one of the key milestones is achieved, the risk of lenders or investors decreases . And once your last key milestone is reached, the chance of success is more or less guaranteed.

11. Appendix

Provide any other relevant information here. Don’t clutter the main sections of your hotel business plan with too many details. Rather support them with attachments in this part.

Putting Your Plan into Action

Many people have great business ideas. But that really doesn’t matter. The difference between dreamers and entrepreneurs is the action mindset. Are you ready to ship your idea to the market? 

The first step is to put your ideas on paper. I hope this free sample will help you write a persuasive hotel business plan. Because no investor or lender will be interested if you cannot present a clear plan.

Follow your dreams and go for it!

Maximize Your Hotel Revenue

Uncover the hidden revenue potential of your hotel or resort.

Need help to Develop and Manage your Hotel Concept?

Our revenue management consulting experts at XOTELS have helped hundreds of hotels to develop and optimize their businesses.

With cost-effective implementations and best practices developed over years of experience, successful business for your boutique hotel, resort, B&B, aparthotel, hostel, or any other lodging concept for that matter.

Hope this template has helped you get inspired to start your own hotel business .

Best of luck in your endeavours!

Patrick Landman

PS. Get in touch with us if you need help developing and managing your hotel concept, and help bring your hotel to the next level with our hotel consulting services.

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Hotel Business Plan Template

Written by Dave Lavinsky

Hotel Business Plan

You’ve come to the right place to create your hotel business plan.

We have helped over 100,000 entrepreneurs and business owners create business plans and many have used them to start or grow their hotel companies.

Sample Hotel Business Plan Template

Below is a template to help you create each of the key elements of your own hotel business plan:

Executive Summary

Business overview.

Pegasus Hotel is a startup full-service independent luxury hotel in Austin, Texas. Owned by two local businessmen, Frank Girard and Miles Butler, it will serve the new up and coming district of the outskirts of Austin and cater to the locals and travelers who crave a luxurious and relaxing atmosphere. Pegasus Hotel will be a 10-story, 360-room hotel with a five-star restaurant and bar, relaxing pool and spa, 20,00 square feet of meeting and event space, a spacious and fully-equipped fitness center, and a view of scenic Austin. Pegasus Hotel will hold weddings and events, meetings, retreats, and those looking to unwind and be pampered while staying at the hotel. The service and amenities will be first class and the concierge will treat guests with extreme care and ensure guest satisfaction is held at an exceptional standard..

Service Offering

The following are the services and amenities that Pegasus Hotel will provide:

• 354 luxury rooms, two presidential suites, and four parlor suites
• Olympic size pool with adjacent hot tubs and surrounding cabanas
• First-class full-service spa
• First-class restaurant and bar
• Spacious fitness center
• Over 20,000 square feet of attractive meeting space for events
• Concierge and butler service
• Complimentary wifi
• Valet service
• Laundry service
• Business center

Customer Focus

Pegasus Hotel will target the population of Austin, Texas, its surrounding communities, and travelers visiting Austin for work or play. Guests will be mid to high level income, enjoy traveling, enjoy visiting spas and high-end restaurants, and work in the corporate or government sector.

Management Team

Pegasus Hotel will be owned by Frank Girard and Miles Butler. They will act in an Owner capacity, and will not be involved in the day to day operations of the hotel. Frank and Miles will hire the appropriate staff to ensure Pegasus Hotel is a profitable and successful business.

Lorenzo Falucci, General Manager, has over twenty years of experience in the hotel industry. He has most recently managed another independent boutique hotel in New York and was excited to be recruited by Frank and Miles to operate the Pegasus Hotel.

Lorenzo will hire Lisa Montgomery as the Director of Sales and David Jimenez as the Assistant General Manager. Lorenzo, Lisa, and David will be the senior management team of Pegasus Hotel. They will oversee all other department managers – Maintenance, Housekeeping, Front Desk/Guest Relations, and Food and Beverage. Each department manager will oversee various employees in their respective department and role. The Pegasus Hotel will have a large and sophisticated operation as each department is integral in the success of the hotel.

Success Factors

Pegasus Hotel will be able to achieve success by offering the following competitive advantages:

• Friendly, attentive, and highly responsive staff that caters to each guest and will be able to provide the best guest experience possible.
• Luxurious amenities throughout the hotel that will make each guest feel pampered.
• Modern and contemporary designed hotel tucked against a beautiful Texas landscape perfectly suited to host any event.
• Competitive rates and frequent guest discounts.

Financial Highlights

Pegasus Hotel is seeking $10,000,000 in debt financing to begin constructing the hotel and commence operations of the business. The funding will be dedicated towards securing the land lease and the hotel build-out and design. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, furniture, fixtures, and equipment, initial inventory, and working capital. The breakout of the funding is below:

• Secure the land lot, architecture, build-out, and design: $6,000,000
• Hotel furniture, fixtures, and equipment: $2,000,000
• Initial inventory: $750,000
• Three months of overhead expenses (payroll, rent, utilities): $1,000,000
• Marketing & advertising: $150,000
• Working capital: $100,000

The following graph below outlines the pro forma financial projections for Pegasus Hotel.

Company Overview

Who is pegasus hotel.

Pegasus Hotel is a startup full-service independent luxury hotel in Austin, Texas. Owned by two local businessmen, Frank Girard and Miles Butler, it will serve the new up and coming district of the outskirts of Austin and cater to the locals and travelers who crave a luxurious and relaxing atmosphere. Pegasus Hotel will be a 10-story, 360-room hotel with a five-star restaurant and bar, relaxing pool and spa, 20,00 square feet of meeting and event space, and a view of scenic Austin. Pegasus Hotel will hold weddings and events, meetings, retreats, and those looking to unwind and be pampered while staying at the hotel. The mission statement of the hotel is to provide first class service and amenities.

The guests rooms will include luxury beds and bedding with best-in-class furniture and bathroom fixtures. Pegasus Hotel will also have a full-service spa that will be able to provide massages, facials, makeup and/or hair service, steam rooms, and a sauna. The Olympic-sized pool will have adjacent hot tubs with a swim-up bar and surrounding cabanas. Pegasus Hotel will be equipped with state-of-the-art fitness equipment in its spacious gym. The restaurant will be a high-end steakhouse that will feature entrees from a world-renowned chef and a wine list cultivated by the area’s most respected sommelier. There will also be over 20,000 square feet of meeting space that will hold weddings, bat mitzvahs, reunions, galas, and any special event.

Pegasus Hotel will be independently owned and operated and will feature its own reservation system and operational software. Each employee will be expertly trained and vetted to pass luxury industry guest service standards. Pegasus Hotel is committed to providing the best guest experience possible while maintaining a profitable hotel. Pegasus Hotel aims to be a step above the rest and be an unforgettable experience for all who step foot into the hotel.

Pegasus Hotel History

Pegasus Hotel is owned by two local businessmen, Frank Girard and Miles Butler. Frank and Miles have been friends and business associates for over thirty years. They became friends in college while attending The University of Texas at Austin. Frank is a real estate developer specializing in commercial real estate and multi-use land projects. Miles is a software engineer who has built multitudes of software programs for various companies. They have both been extremely successful in their careers and want to divest their investments in a large-scale full-service hotel in Austin, Texas.

Since incorporation, Pegasus Hotel has achieved the following milestones:

• Acquired a 40-acre lot on the outskirts of Austin, Texas.
• Registered Pegasus Hotel, LLC to do business in the State of Texas.
• Hired a consultant to conduct a feasibility study for a full-service hotel in Austin.
• Began developing reservation and operational management software for use at the hotel.
• Began the branding image, logo, website, and social media accounts for the staffing agency.
• Applied for a liquor and mixed beverage permit with the Texas Alcoholic Beverage Commission.
• Hired an architect to begin the design phase of the hotel.

Pegasus Hotel Services

The following will be the services and amenities Pegasus Hotel will provide:

Industry Analysis

The hotel industry is expected to increase to a $133 billion in the next five years. The hospitality industry will benefit from increases in travel spending, corporate profit and general consumer spending.

As consumers earn higher incomes and businesses replenish their budgets, travel spending is projected to increase over the next five years. Inbound trips by non-US residents are anticipated to rise 22% over next the five years, while domestic travel is expected to grow 9% during the same period.

The industry will see particularly strong future growth in extended-stay hotels, boutique hotels, spa and health retreats and resorts segments. As demand for these auxiliary services picks up, industry employment is anticipated to recover and increase over the next five years. Industry players are also expected to continue expanding abroad into emerging economies, such as Asia, Eastern Europe and South America. These foreign markets are expected to somewhat detract from domestic capital investment, as they offer higher growth prospects for industry operators.

Customer Analysis

Demographic profile of target market.

The precise demographics for Austin, Texas are:

Customer Segmentation

Pegasus Hotel will primarily target the following customer profiles:

• Individuals and families who have disposable income (mid to high level)
• Frequent travelers
• Individuals who dine out and visit spas frequently
• White collar workers (corporate or government office)

Competitive Analysis

Direct and indirect competitors.

Pegasus Hotel will face competition from other companies with similar business profiles. A description of our direct competitors is below.

Hotel Ella is a historic boutique hotel located in Austin, Texas. Located in downtown Austin and walking distance to the University of Texas campus, Hotel Ella is a stylish boutique hotel housed in the historic Goodall Wooten House, one of Austin’s original landmark estates. Constructed in 1900, the Greek revival-style mansion underwent an extensive renovation in 2013, and now offers the perfect balance between modernity and a rich history rooted in the fabric of the neighborhood and the university. Hotel Ella has 47 guest rooms, a cabana-lined pool, and a wrap-around veranda overlooking the front lawn. Hotel Ella features beautifully designed outdoor and indoor spaces perfectly suited for a vacation, wedding, or corporate event. The hotel also features a diverse collection of Texas Modernist works around the hotel grounds.

All guests of Hotel Ella are treated to warm southern hospitality and superior personalized service during their stay. The historic property is appointed with a variety of elegant 21st century amenities. Hotel Ella also offers the following amenities and guest services:

• Complimentary 24-hour guest services
• Complimentary high-speed wi-fi access
• Complimentary electric car charging station
• Complimentary morning newspapers available in the historic mansion
• Complimentary coffee stations from 5am – 11am
• Twice-daily housekeeping service
• Cabana-lined outdoor pool
• Fitness center
• Same-day valet laundry services
• In-room dining by Goodall’s
• Business services: photocopying, printing, postal services, and supplies

Hotel Ella also welcomes dogs of all sizes at no additional fee.

Kimber Modern

Kimber Modern is located in the hip SoCo district of Austin and is intended to draw in the independent urban traveler seeking a unique escape. It is architecturally designed with clean lines and abundant light filtered through canopies of oaks in an artfully landscaped Courtyard. The hotel also encompasses absolute comfort and attention to detail while providing technologically sophisticated rooms in their boutique guest rooms. Guests booking at Kimber Modern will receive complimentary beverages, parking, and WiFi.

Kimber Modern offers the following hotel amenities to its guests:

• Off street covered parking
• Electric car charging station
• Keyless entry
• Complimentary WiFi throughout the hotel
• Multi-level courtyard with a 25-foot glass water feature with multiple areas to lounge
• Jura self-serve coffee system featuring a variety of coffee drinks 24/7
• Beverage bar 24/7
• Gourmet teas
• Virtual concierge – computer, printer, and copier
• Meeting space available for groups
• 3pm check-in and noon check-out

Guests are also available to book the entire hotel for their group.

The Cat Noir Hotel

The Cat Noir Hotel is an award-winning 14-room boutique hotel located in the heart of Austin’s east side. The European-styled boutique hotel includes a restaurant and bar partner, Uncle Nicky’s Italian Specialties. Uncle Nicky’s offers a relaxed all-day dining experience that is themed after cafes in northern Italy. The Cat Noir Hotel opened in 2016 and has been ranked #2 by Travel + Leisure’s World’s Best Awards and Top 20 Best Hotels in Texas by Conde Nast Traveler.

The Cat Noir Hotel’s contemporary design maintains a sense of warmth and a unique aesthetic that is felt through the lobby, outdoor spaces, and each of the unique guest rooms. In addition to the design elements, The Cat Noir Hotel boasts the following features:

• Private roof deck for guests to enjoy the stunning views of downtown, the Texas Capitol, and the University of Texas
• Outdoor patio and courtyard areas on all levels
• Artwork from local artists

Each of the guest rooms include Juliet balconies with neighborhood views, fine linens, and Simmons luxury plush mattresses.

Competitive Advantage

Pegasus Hotel will be able to offer the following advantages over their local competition:

Marketing Plan

Brand & value proposition.

Pegasus Hotel will offer the unique value proposition to its target local market:

• Professional and attentive staff dedicated to ensure complete guest satisfaction.
• Various amenities throughout the hotel for any guest to enjoy.
• Modern and contemporary design with beautiful Texas views throughout the entire hotel.
• Competitive rates.

Promotions Strategy

The promotions strategy for Pegasus Hotel is as follows:

Social Media

Pegasus Hotel will invest in advertising the hotel on social media platforms Facebook, Instagram, LinkedIn, and Twitter. By using targeted social media marketing, Pegasus Hotel will be able to reach those who frequent nice restaurants and spas and travel frequently.

Website/SEO Marketing

Pegasus Hotel will invest in a strong SEO presence so that when someone enters “Austin boutique hotel” or “first class hotel near me” in their Google or Bing search bar, Pegasus Hotel is at the top of the list. Their website will feature photos of the guest rooms, meeting areas, pool, spa, fitness center, and restaurant/bar. Future guests will be able to make a reservation to book their future stay on the website and access contact information for either a Director of Sales or General Manager of the property.

Pegasus Hotel will request all requests for news stories regarding the development of the hotel, owner/developer information, opening dates, etc. By accommodating the press’ requests for stories, it will also be free advertising for the public to learn about the new up and coming luxury hotel.

Frank and Miles will invest in a billboard in downtown Austin where the mid to upper class of residents frequent. The hotel will be minimalistic but eye-catching. It will feature an attractive rendering of the hotel along with the website. Curious passersby will be directed to visit the hotel’s website for detailed information.

Third Party Booking Websites

Once the hotel is nearing 60 days towards opening, all of the third-party websites will feature Pegasus Hotel so that travelers visiting Austin will be able to see it listed as an option for Austin hotels.

Bridal Shows and Wedding Industry Events

Pegasus Hotel will have a table at all of Austin’s bridal shows and wedding industry events. It will attract those couples searching for a venue to accommodate their special day.

The pricing of Pegasus Hotel will be moderate and on par with competitors so customers feel they receive value when purchasing its guest rooms and services.

Operations Plan

The following will be the operations plan for Pegasus Hotel.

Operation Functions:

• Frank and Miles will be the owners of the hotel and hire the appropriate staff to manage the hotel. Frank will act as CFO of the hotel and Miles will be in charge of the reservation system and hotel operations software. Miles developed the software and will focus on making sure it’s always functional and efficient.
• General Manager will be hired to oversee the entire staff and hotel operations to include guest satisfaction, oversee vendor contracts, events, and making sure that each department is running effectively and efficiently.
• Assistant General Manager to assist the General Manager with overseeing the staff, with particular attention to guest satisfaction and front desk operations.
• Director of Sales will be hired to sell events, corporate accounts, and group bookings for the hotel.
• Maintenance Engineer will be hired to attend to all mechanical and plumbing issues that may arise.
• Executive Housekeeper will be hired to lead the team of housekeepers to make sure all areas of the hotel are being cleaned to Pegasus Hotel standards and that each guest is receiving all accommodations to their requested schedule.

Milestones:

Pegasus Hotel will have the following milestones completed in the next six months.

8/1/202X – Purchase land lot and break ground on new hotel business.

8/15/202X – Finalize architectural renderings and hire a General Contractor to build the hotel.

9/1/202X – Finalize contract with advertising company for them to design the branding image of the hotel, logo, website, billboard, and social media accounts.

9/15/202X – Begin social media and website advertising campaign. Billboard with a teaser of ‘Coming Soon’ will go up in downtown Austin.

10/5/202X – Hire General Manager and Director of Sales.

10/15/202X – Attend annual Wedding Industry Event with a table to begin advertising Pegasus Hotel.

11/1/202X – Pegasus Hotel will go live on third party booking websites.

11/15/202X – Remainder of staff will be hired to begin training program.

11/30/202X – Final walk-thru of newly constructed Pegasus Hotel.

12/15/202X – Begin furnishing and interior design of the hotel.

1/1/202X – Grand Opening of Pegasus Hotel.

Lorenzo will hire Lisa Montgomery as the Director of Sales and David Jimenez as the Assistant General Manager. After an exhaustive search, Lorenzo believes has found the next two senior management positions to ensure the success of the hotel. Each comes with an impressive resume of prior hotel sales and operational experience.

Lorenzo, Lisa, and David will be the senior management team of Pegasus Hotel. They will oversee all other department managers – Maintenance, Housekeeping, Front Desk/Guest Relations, and Food and Beverage. Each department manager will oversee various employees in their respective department and role. The Pegasus Hotel will have a large and sophisticated operation as each department is integral in the success of the hotel.

Lorenzo, Lisa, and David will meet with Frank and Miles monthly to update them on progress and overall operations and sales efforts of the Pegasus Hotel.

Financial Plan

Key revenue & costs.

The revenue drivers for Pegasus Hotel are the revenues it will collect when guests book a reservation at the hotel. The hotel will also collect revenues from its restaurant and bar, spa, and events it will host.

The cost drivers will be the payroll and overhead costs to staff the hotel. Other costs will involve the land lease, utilities, marketing costs, and technology fees. There will also be costs associated with the maintenance of the hotel, food and beverage inventory, spa inventory, and hotel guest room supplies.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Number of Room Nights Sold per Month: 8,000
• Number of Events per Month: 30
• Land Lease per Year: $1,500,000

Financial Projections

Income statement, balance sheet, cash flow statement, hotel business plan faqs, what is a hotel business plan.

A hotel business plan is a plan to start and/or grow your hotel business. Among other things, it outlines your business concept, identifies your target customers, presents your hotel marketing plan and details your financial projections.

You can  easily complete your hotel business plan using our Hotel Business Plan Template here .

What Are the Main Types of Hotel Companies?

There are many types of hotel companies. Most hotels are affiliated with a hotel franchise company. Other hotel companies distinguish themselves by star level-  4 to 5-star hotels are on the higher end of rate and amenity offerings, whereas 2 to 3-star hotels cater more towards the everyday business travelers and families.

What Are the Main Sources of Revenue and Expenses for a Hotel Business?

The primary source of revenue for a hotel business are the room fees it charges each guest to stay at the hotel. Revenues are also collected for different amenity offerings, such as room service,  restaurant and bar revenue, spa revenues, and guest shop revenue.

The key expenses for a hotel business are the costs for inventory, maintenance, supplies, furniture, fixtures, and equipment, technology, and payroll of the staff. Other expenses will be the rent, utilities, and overhead costs, if applicable.

How Do You Secure Funding For Your Hotel?

Hotel businesses are most likely to receive funding from banks. Typically you will find a local bank and present your business plan to them. Angel investors and other types of capital-raising such as crowdfunding  are other common funding sources. This is true for a business plan for a hotel, a resort or a boutique hotel.

What are the Steps To Start a Hotel Business?

Starting a hotel business can be an exciting endeavor. Having a detailed roadmap of the steps to start a business will help you stay focused on your business goals and get started faster.

• Develop A Hotel Business Plan - The first step in starting a business is to create a comprehensive business plan that outlines all aspects of the venture. This includes market research to identify the potential market size and target audience , the hotel’s services, pricing strategies and a detailed financial forecast.  
• Choose Your Legal Structure - It's important to select an appropriate legal entity for your hotel business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your hotel business is in compliance with local laws.
• Register Your Hotel Business - Once you have chosen a legal structure, the next step is to register your hotel business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 
• Identify Financing Options - It’s likely that you’ll need some capital to start your hotel business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 
• Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 
• Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 
• Acquire Necessary Hotel Equipment & Supplies - In order to start your hotel business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 
• Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your own hotel business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective digital marketing strategy including SEO and paid advertising . You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a new hotel business:

• How to Start a Hotel Business

Where Can I Get an Example Hotel Business Plan PDF?

You can download our example hotel business plan PDF template here . This is a business plan template you can use in PDF format.

Other Helpful Business Plan Templates

Franchise Business Plan Template Resort Business Plan Template Bed and Breakfast Business Plan Template

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Hotel Business Plan

Owning a hotel is a dream for many people, who like to organize and engage in multiple different activities. From having unique themes to beautiful decor, a hotel business gives you an ample amount of chances to showcase your creativity.

But the pandemic might have naturally left many of you doubting the viability of hotels.

With a vast variety of reasons a hotel serves, the hotel business is very less likely to become irrelevant.

Most leading hotel businesses, today, rely on software to manage their operations. Kiosk Mode for automated check-ins, on-the-spot reservations, and feedback, hotel management software for customer management, and revenue control are just some of the many solutions that streamline hotel management.

And all you need to have a thriving hotel business is a hotel business plan that’ll help you get the maximum out of the profitable times and stay prepared for unexpected circumstances.

Industry Overview

The hotel industry stood at a whopping market value of 0.95 trillion dollars in 2021 and is recovering at a rapid rate after the COVID-19 pandemic.

The hotel industry is ruled by several major players, hence it is a good practice to go through their case studies and business strategies. There’s a high chance that you might find something very useful for yourself.

Work vacations and leisure trips are the major factors that contribute to the growth of the hotel industry.

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Things to Consider Before Writing a Hotel Business Plan

Select a good location.

An accessible and well-located hotel is much more likely to work than one that is situated otherwise. Also, the neighborhood you set up your hotel in matters a lot too. Hence, it is important to choose the right size of land and locality to set up your hotel.

Find good suppliers

From laundry, and housekeeping to the right ingredients for the restaurant,  there are several supplies a hotel needs. And to satisfy your customers, it is essential to get the best of everything. After all, the reputation and image of your hotel matter a lot when it comes to running a hotel business.

Know your financial requirements

A hotel has several financial requirements from location to installation of appliances, furniture, decor, and salaries of employees. This also makes for a complex financial structure. Hence, it is good to figure out and keep an account of all your financial needs before getting started.

Find your USP

In the mass of industry giants and small businesses that exist in the business, it is important to have something that helps you stand apart from everyone else. From theme-based decor to additional services and ventures, your USP can be anything. But make sure that you find one before you get up and running.

Chalking Out your Business Plan

If you are planning to start a new hotel business, the first thing you will need is a business plan. Use our sample hotel business plan created using upmetrics business plan software to start writing your business plan in no time.

Before you start writing a business plan for your new hotel business, spend as much time as you can reading through some samples of hotel and lodging-related business plans .

Reading some sample business plans will give you a good idea of what you’re aiming for, and also it will show you the different sections that different entrepreneurs include and the language they use to write about themselves and their business plans.

We have created this sample Hotel Business Plan for you to get a good idea about what a perfect hotel business plan should look like and what details you will need to include in your stunning business plan.

Hotel Business Plan Outline

This is the standard hotel business plan outline which will cover all important sections that you should include in your business plan.

• Business Overview
• Mission Statement
• Location and Facility
• Steve Cowan
• Key Advisors to the Company
• Economic Environment
• Geographical/Competitive Environment
• Legal/Political Environment
• Technology Environment
• High Line ($139-$750 per night, depending upon season)
• Motel ($59-$119 per night, depending upon season)
• Bed & Breakfast (B&B)
• Summary of Opportunities and Threats in the Environment
• Competitive Advantage
• Industry Keys to Success
• SWOT Analysis
• Marketing Strategies
• Target Markets – Consumer
• Positioning and Product Strategy
• Distribution Strategy
• Pricing Strategy
• Service and Support Philosophy
• New Business Segment
• Publicity and Public Relations
• Guest Reward Programs
• Advertising
• Marketing and Promotion Budget
• Evaluation & Control Strategies
• Project Funding Summary
• Phase 1 Funding Amounts Sought
• Financial Plan Assumptions
• Income Statement Projections
• Balance Sheet
• Cash Flow Projections

After getting started with Upmetrics , you can copy this sample hotel business plan template into your business plan and modify the required information and download your hotel business plan pdf or doc file.

It’s the fastest and easiest way to start writing your business plan.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

Download a sample hotel business plan

Need help writing your business plan from scratch? Here you go;  download our free hotel business plan pdf  to start.

It’s a modern business plan template specifically designed for your hotel business. Use the example business plan as a guide for writing your own.

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About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Here is a free business plan sample for a hotel.

Have you ever envisioned opening the doors to your very own hotel, creating a home away from home for travelers, but find yourself unsure of where to start?

In the content that follows, we will guide you through a comprehensive business plan tailored specifically for the hotel industry.

As any seasoned hotelier will tell you, a meticulously formulated business plan is crucial to thriving in the hospitality world. It serves as a roadmap, outlining your vision, objectives, and the strategies you will employ to turn your hotel into a successful venture.

To streamline your planning process and set a solid foundation for your hotel business, feel free to utilize our hotel business plan template. Additionally, our team of experts is on standby to review and refine your plan at no extra cost.

How to draft a great business plan for your hotel?

A good business plan for a hotel must reflect the unique aspects of the hospitality industry.

To start, it is crucial to provide a comprehensive overview of the hotel market. This includes current statistics and identifying emerging trends within the industry, as illustrated in our hotel business plan template .

Then, you should articulate your project with clarity. This encompasses your vision, pinpointing your target market (such as leisure travelers, business clients, event planners), and the distinctive positioning of your hotel (luxury, boutique, budget-friendly, eco-conscious, etc.).

The subsequent section should delve into market analysis. This requires a thorough understanding of the competitive landscape, market dynamics, and guest preferences.

For a hotel, particular emphasis should be placed on the services and amenities you plan to provide. Detail your offerings - rooms, suites, conference facilities, spa services, dining options - and explain how they cater to the needs and expectations of your intended guests.

The operational plan is equally vital. It should outline the location of your hotel, the layout of guest rooms and public spaces, vendor relationships for supplies and services, and the operational workflow.

For a hotel, it is important to highlight the quality of customer service, room standards, and adherence to hospitality regulations.

Next, address your marketing and sales strategy. How will you attract and retain guests? Consider promotional tactics, guest loyalty programs, and ancillary services (such as tours, transportation, or special events).

Adopting digital strategies, like a robust website, online booking capabilities, and a social media presence, are also crucial in the modern marketplace.

The financial framework is another critical component. This includes the initial investment, revenue projections, operating expenses, and the break-even analysis.

In a hotel, managing cash flow is complex due to the high fixed costs and seasonal fluctuations, so precise planning and a solid understanding of your financials are imperative. For assistance, refer to our financial forecast for a hotel .

Compared to other business plans, a hotel's plan must pay special attention to factors such as location desirability, guest experience, staff training and retention, and the impact of online reviews and ratings.

A well-crafted business plan will not only help the hotelier to define their vision and strategies but also to attract investors or secure loans.

Lenders and investors seek robust market analysis, realistic financial projections, and a comprehensive grasp of the hotel's day-to-day operations.

By presenting a thorough and substantiated plan, you showcase your credibility and dedication to the success of your hotel venture.

To achieve these goals while saving time, you can simply fill out our hotel business plan template .

A free example of business plan for a hotel

Here, we will provide a concise and illustrative example of a business plan for a specific project.

This example aims to provide an overview of the essential components of a business plan. It is important to note that this version is only a summary. As it stands, this business plan is not sufficiently developed to support a profitability strategy or convince a bank to provide financing.

To be effective, the business plan should be significantly more detailed, including up-to-date market data, more persuasive arguments, a thorough market study, a three-year action plan, as well as detailed financial tables such as a projected income statement, projected balance sheet, cash flow budget, and break-even analysis.

All these elements have been thoroughly included by our experts in the business plan template they have designed for a hotel .

Here, we will follow the same structure as in our business plan template.

Market Opportunity

Market data and figures.

The hotel industry is a significant component of the global tourism sector with substantial economic impact.

Recent estimates place the global hotel market value at approximately 570 billion dollars, with projections indicating growth as travel demand increases post-pandemic.

In the United States alone, there are over 54,000 hotel properties, contributing to an annual revenue of nearly 200 billion dollars for the hotel industry.

These statistics underscore the hotel industry's vital role in not only accommodating travelers but also in driving economic growth and employment.

The hotel industry is witnessing several evolving trends that are shaping the future of hospitality.

Personalization and experience-driven stays are at the forefront, with guests seeking unique and memorable experiences tailored to their preferences.

Sustainability is becoming increasingly important, with eco-friendly practices and green hotels gaining traction among environmentally conscious travelers.

Technology integration, such as contactless check-in, smart rooms, and AI-driven customer service, is enhancing operational efficiency and guest satisfaction.

The rise of alternative lodging options like boutique hotels and vacation rentals is also influencing the market, offering travelers more diverse choices.

Health and wellness have become a priority, leading to the integration of wellness amenities such as spas, fitness centers, and healthy dining options within hotels.

These trends highlight the hotel industry's adaptability and its commitment to meeting the evolving needs of modern travelers.

Success Factors

Several key factors contribute to the success of a hotel.

Location remains a critical aspect, with hotels in prime destinations or convenient locales more likely to attract guests.

Quality of service is paramount, as exceptional guest experiences can lead to repeat business and positive word-of-mouth referrals.

Modern amenities and comfort are essential for meeting guest expectations and staying competitive in the market.

Brand reputation and online presence, including positive reviews and ratings on travel sites, significantly influence booking decisions.

Adaptability to market trends, such as offering sustainable options or incorporating cutting-edge technology, can set a hotel apart from its competitors.

Lastly, effective cost management and strategic marketing are crucial for maintaining profitability and ensuring the long-term success of a hotel.

The Project

Project presentation.

Our hotel project is designed to cater to the needs of travelers seeking a comfortable and accommodating stay without compromising on their health and lifestyle preferences. Situated in a prime location with easy access to tourist attractions and business centers, our hotel will offer a range of amenities tailored to guests who prioritize wellness and sustainability. The hotel will feature hypoallergenic rooms, organic bedding, a fitness center, a spa offering natural treatments, and a dining area serving nutritious, locally-sourced food with options for various dietary requirements, including gluten-free, vegan, and vegetarian meals.

The emphasis will be on providing a restorative and rejuvenating experience, allowing guests to maintain their healthy routines while away from home.

Our hotel aspires to be a leader in the wellness hospitality sector, setting a new standard for health-conscious travel and accommodation.

Value Proposition

The value proposition of our hotel project is centered around offering a holistic and health-focused lodging experience. We understand the importance of maintaining a balanced lifestyle, and our hotel is committed to providing an environment that supports the well-being of our guests.

From our fitness and spa facilities to our dining options and eco-friendly practices, we aim to ensure that every aspect of our guests' stay contributes to their health, comfort, and satisfaction.

We are dedicated to creating a space where travelers can feel rejuvenated and aligned with their wellness goals, making our hotel the preferred choice for health-conscious individuals and those seeking a restful retreat.

Our commitment to excellence in service and our focus on well-being will establish our hotel as a cornerstone in the community for sustainable and healthy travel.

Project Owner

The project owner is a seasoned hospitality professional with a passion for wellness and sustainable living. With a background in hotel management and a personal commitment to health and the environment, they are driven to create a hotel that exemplifies these values.

Armed with industry experience and a forward-thinking approach, the project owner is dedicated to innovating the hospitality experience by integrating wellness into every aspect of the hotel's operations.

With a vision of promoting sustainable travel and a healthy lifestyle, they are determined to offer a unique lodging experience that not only meets the expectations of guests but also inspires them to prioritize their well-being even when on the road.

Their dedication to creating a nurturing and eco-friendly environment is the driving force behind this project, aiming to set a new benchmark for wellness-oriented hotels.

The Market Study

Market segments.

The market segments for this boutique hotel are divided into several categories.

First, there are business travelers who require comfortable and convenient accommodations with amenities that support their work-related needs.

Next, there are leisure travelers, including couples, families, and solo adventurers, looking for unique experiences and personalized service.

The market also includes event planners and organizations seeking venues for meetings, conferences, or special events.

Finally, local residents may seek the hotel for staycations, dining experiences, or as a venue for personal events such as weddings or parties.

SWOT Analysis

A SWOT analysis of this boutique hotel project reveals several aspects.

Strengths include a prime location, personalized customer service, unique thematic rooms, and high-quality amenities.

Weaknesses could include the high operational costs associated with maintaining a luxury experience and the challenge of building brand recognition in a competitive market.

Opportunities lie in capitalizing on the growing trend of experiential travel, forming partnerships with local businesses, and leveraging online marketing to reach a global audience.

Finally, threats could include economic downturns affecting travel spending, the rise of alternative accommodation options like Airbnb, and the need to constantly innovate to stay ahead of competitors.

Competitor Analysis

Competitor analysis in the boutique hotel sector reveals a diverse range of players.

Among direct competitors are other boutique hotels, luxury chains, and alternative accommodations offering unique experiences.

These competitors vie for discerning travelers who seek more than just a place to stay but a memorable experience.

Potential competitive advantages include exceptional service, exclusive amenities, a strong brand story, and a commitment to sustainability and local culture.

Understanding competitors' strengths and weaknesses is crucial for carving out a niche in the market and for customer acquisition and loyalty.

Competitive Advantages

Our boutique hotel's competitive advantages lie in our dedication to creating an immersive experience for our guests.

We offer uniquely designed rooms, each telling a different story, and personalized services that cater to the individual needs of our guests.

Our strategic partnerships with local artisans and businesses allow us to provide authentic local experiences, setting us apart from generic accommodations.

We are committed to sustainability, ensuring that our operations have a minimal environmental impact, which resonates with eco-conscious travelers.

You can also read our articles about: - how to establish a hotel: a complete guide - the customer segments of a hotel - the competition study for a hotel

The Strategy

Development plan.

Our three-year development plan for the boutique hotel is designed to establish a strong foothold in the hospitality market.

In the first year, our goal is to build a solid reputation for exceptional service and unique guest experiences, focusing on local and regional markets.

The second year will be geared towards expanding our marketing efforts to attract international travelers and implementing sustainability practices to enhance our eco-friendly brand image.

In the third year, we plan to explore additional services such as event hosting and wellness retreats, further differentiating our hotel in the competitive landscape.

Throughout this period, we will continuously seek to innovate and improve our offerings, ensuring that we remain a preferred choice for discerning travelers.

Business Model Canvas

The Business Model Canvas for our boutique hotel targets travelers seeking personalized experiences, luxury accommodations, and health-conscious amenities.

Our value proposition revolves around providing a unique and memorable stay, with a focus on wellness, local culture, and personalized service.

We offer our services through direct bookings via our website and partnerships with travel agencies, utilizing our key resources such as our well-trained staff, luxurious facilities, and prime location.

Key activities include guest services, facility maintenance, and creating tailored experiences for our guests.

Our revenue streams are generated from room bookings, on-site dining, and additional services, while our costs are associated with operations, staffing, and marketing efforts.

Find a complete and editable real Business Model Canvas in our business plan template .

Marketing Strategy

Our marketing strategy is centered on creating a strong brand presence and showcasing our unique selling points.

We aim to attract guests by highlighting our hotel's bespoke experiences, wellness focus, and commitment to sustainability. Our approach includes targeted online campaigns, partnerships with luxury travel influencers, and engagement with travel communities.

We will also collaborate with local businesses and cultural institutions to offer exclusive packages and promote local tourism.

Utilizing social media, we plan to share guest stories and testimonials to build trust and encourage word-of-mouth referrals.

Risk Policy

The risk policy for our boutique hotel focuses on mitigating risks associated with the hospitality industry, such as fluctuating occupancy rates and guest satisfaction.

We will implement dynamic pricing strategies to optimize revenue and maintain a high standard of service to ensure repeat business.

Regular training for staff will be conducted to uphold service quality, and we will invest in robust health and safety protocols to ensure the well-being of our guests and employees.

Additionally, we will secure comprehensive insurance coverage to protect against unforeseen events and liabilities.

Why Our Project is Viable

We are confident in the viability of our boutique hotel project, given the growing demand for unique travel experiences and personalized service.

With our focus on wellness, local culture, and sustainability, we believe we can attract a niche market of travelers and establish a loyal customer base.

We are committed to adapting to market trends and guest feedback to ensure the success of our hotel.

We are enthusiastic about the opportunity to create a destination that not only provides a luxurious escape but also enriches the lives of our guests and the local community.

You can also read our articles about: - the Business Model Canvas of a hotel - the marketing strategy for a hotel

The Financial Plan

Of course, the text presented below is far from sufficient to serve as a solid and credible financial analysis for a bank or potential investor. They expect specific numbers, financial statements, and charts demonstrating the profitability of your project.

All these elements are available in our business plan template for a hotel and our financial plan for a hotel .

Initial expenses for our hotel include acquiring or constructing the hotel property, outfitting guest rooms with furniture and amenities suitable for a comfortable stay, designing common areas to meet hospitality standards, investing in a reservation and management system, staff training for exceptional customer service, as well as costs related to brand creation and launching targeted marketing campaigns to attract guests.

Our revenue assumptions are based on a thorough market analysis of the local hospitality industry, considering factors such as tourism trends, business travel patterns, and the competitive landscape.

We anticipate a gradual increase in occupancy rates, starting conservatively and growing as the reputation of our hotel strengthens.

The projected income statement indicates expected revenues from room bookings, ancillary services (such as food and beverage, event hosting, etc.), operational costs (housekeeping, maintenance, utilities), and operating expenses (rent, marketing, salaries, etc.).

This results in a forecasted net profit essential for assessing the long-term viability of our hotel.

The projected balance sheet reflects assets specific to our hotel, such as property, building improvements, furniture, and equipment, and liabilities including mortgages and other anticipated expenses.

It shows the overall financial health of our hotel at the end of each fiscal period.

Our projected cash flow budget details the expected inflows from guest payments and outflows for operational expenses, allowing us to anticipate our cash needs throughout the year. This will enable us to manage our finances effectively and maintain liquidity.

The projected financing plan lists the specific financing sources we plan to use to cover our startup and operational expenses.

The working capital requirement for our hotel will be closely monitored to ensure we have the necessary funds to finance our daily operations, including purchasing supplies, inventory management, and salary payments.

The break-even point specific to our hotel is the level of occupancy and average daily rate needed to cover all our costs, including startup expenses, and begin generating a profit.

It will indicate when our business will become financially sustainable.

Performance indicators we will track include the average occupancy rate, average daily rate (ADR), revenue per available room (RevPAR), the guest satisfaction index to assess service quality, and the return on investment to measure the efficiency of our capital invested in the hotel.

These indicators will help us evaluate the financial performance and overall success of our hotel.

If you want to know more about the financial analysis of this type of activity, please read our article about the financial plan for a hotel .

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From idea to execution: 10 sections to include in your hotel business plan

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By Lana Cook

Do you love connecting with people from all over the world who share your passion for travel? Don’t want to work a typical 9-5 job and instead want to build a business where every day is different, and you own your schedule?

Starting a hotel business is a dream many entrepreneurs have, but it can be a daunting venture to start. A hotel business plan is a critical first step for business owners to turn their dreams into reality. A strategic plan allows one to study the hotel industry, identify their hotel’s unique point of view, and outline how exactly they will reach their goals.

Read on to learn more about the ten sections to include in your hotel business plan, tips for creating an effective plan, and key things you need to start your new hotel business.

Ready to get started creating your plan? Download our hotel business plan template.

What is a hotel business plan?

A hotel business plan is a detailed document that identifies your business’s goals, objectives, and strategies for success. It includes market research and a roadmap for building and operating your business.

Why do you need a hotel business plan?

Studies show that entrepreneurs who finished their business plan were twice as likely to succeed in growing their business than those with no plan. A hotel business plan:

• Helps you identify whether you have a viable business idea
• Provides a detailed roadmap on what you need to accomplish and why
• Gives potential investors insight into your business idea and confidence that you can be successful
• Keeps you on track as you start to execute the different tactics outlined in your plan
• Identifies critical milestones for you and your team to reach

Your plan does not have to be static and should change over time as your business grows and evolves. Your first draft is a starting point to help guide your strategy and instill confidence in potential investors.

10 sections to include in your hotel business plan

Whether you’re starting a small boutique hotel, a cozy B&B, or a 5-star resort, you will need to address the following sections in your hotel business plan.

1. Executive summary

An executive summary is the most essential part of your business plan. It should concisely explain the purpose of your business and why it will be a success.

Include your mission statement explaining why your hotel exists and its overall goal. For example, Capella Hotels & Resorts ’ mission is to combine tradition, discovery, individuality, and twist of the unexpected to create the perfect stay for each guest.

You should also include your vision statement that clearly describes your hotel’s purpose for being in a single sentence. For Capella Hotels, its vision is to embody excellence in the craft of hospitality.

We recommend writing your executive summary as the final stage, as it should summarize the goals and objectives laid out in your plan.

2. Company analysis

Your company analysis is where you can dive into your hotel’s competitive advantage. Ask yourself what makes your hotel unique . Why would guests want to stay with you instead of your competitors?

In this section, identify your brand’s identity and the goals and objectives you want to accomplish. Outline how many rooms and room categories your property will have. For example, will you offer a hybrid hospitality model with dorms, single rooms, and suites? Explain what ancillary revenue sources you’ll offer, like in-room food and beverage options, welcome drinks, or airport shuttles.

Use storytelling to communicate your excitement and passion and make it clear what your hotel will bring to the hospitality industry that hasn’t been done before.

3. Industry analysis

As a business owner, you must be prepared for forces outside your control. You will need to conduct a market analysis that looks at the hospitality industry to identify micro and macro trends that may impact your business. Look at:

• Economic trends
• Environmental trends
• Political trends
• Global health trends
• Technology trends

For each trend, identify how it will impact your business and ways to mitigate risk or take advantage of opportunities.

For example, digital check-in technology has increased across the hotel industry with the rise of tech-savvy guests, new innovative software providers, and labor challenges. Therefore, consider what guest experience solution you’ll include at your hotel.

In addition to trends, look at the history of the hospitality industry, its current size, and how it’s expected to grow in the short and long term. This research will impact the rest of your plan, especially your marketing and financials.

4. Customer analysis

What type of hotel guests do you want to attract? It’s impossible to please every kind of guest, which is why it’s important to identify your target market . Once you know who you want to stay at your property, you can develop amenities, services, and marketing materials to attract these guests and deliver exceptional experiences .

Ask yourself:

• What type of guests do I want? Business or leisure travelers? Retirees or Gen-Z?
• What demographics? Age, gender, marital status, etc.
• What are my target market’s interests? Water sports, hiking, relaxation, museums, etc.
• What does my target market value? Sustainability, contactless technology, personalized service, localized experiences, etc.

This section will help you formulate the guest experience to ensure that expectations meet reality .

5. Competitive analysis

The competition you face will vary depending on where your hotel is located. In this section, you should conduct in-depth competitor research to understand how your hotel will compare. Identify your five major competitors — ideally, three direct competitors you will be competing with upon opening and two aspirational competitors you can emulate as you grow your business.

Conduct a SWOT analysis based on your competitors to look at:

• Strengths . Where does your property excel in comparison to competitors? Why would travelers pick you? Price, amenities, location, technology, etc.
• Weaknesses . Where does your property fall short in comparison to competitors? Price, amenities, location, technology, etc.
• Opportunities . What industry trends can you take advantage of? What local events or partnerships can you capitalize on?
• Threats . What are the biggest threats facing your property? War, travel restrictions, recession, etc.

A thorough analysis can help solidify your competitive advantage and develop a contingency plan for how you will deal with your weaknesses and threats.

6. Marketing plan

Without demand, there is no business. A hotel marketing plan outlines the channels you’ll use to reach your target audience to drive bookings. Your marketing strategy should include three key channels:

1) Paid media . Paid advertising to promote your property and drive bookings. This includes online travel agencies (OTAs) , search engine marketing (SEM), retargeting, and metasearch advertising.

2) Owned media. The content  you create, like your hotel website , social media channels, blog posts, and SEO.

3) Earned media. User-generated content created by third parties like media coverage or online reviews.

7. Operations plan

How do you plan to run your day-to-day operations? This section of your plan will outline all of the key tasks and responsibilities of your team and what exactly your hotel will offer. Consider:

• The number of staff and supervisors required
• Job descriptions and responsibilities
• Your service standards (check out our downloadable SOPs for some inspiration)
• How you’ll manage your inventory
• What hotel technology solutions will you need? PMS, channel manager, booking engine, payment terminal, revenue management tools, guest engagement software, etc.
• What services and amenities do you want to offer? Room service, bar, restaurant, pool, spa, wellness center, etc. 

Detail your short and long-term operational plans and the stakeholders involved for each area.

8. Management team

Whether or not you’ve hired your team yet, this is one of the most important sections potential investors will look at. Make sure to outline the key personnel you will require and their roles. 

In general, these are the following roles you’ll want to outline:

• Hotel management (general manager, front office manager, housekeeping manager, maintenance manager, revenue manager)
• Hotel sales team
• Housekeeping staff
• Front office staff
• Maintenance

Depending on the size of your hotel, your team will vary. Identify the team members you need to open and your hiring plans over the next five years.

9. Strategic plan

Hoteliers must be strategic in optimizing occupancy rates across seasons to maintain revenue. As part of your strategic plan, identify how you will manage:

• Pricing – what room types will you offer, and how will the pricing vary?
• How will you maintain consistent occupancy throughout the high and low seasons? Will you adapt your pricing and marketing strategies?
• How will you conduct revenue management ? What type of rules/alerts will you use to adjust rates? Will you use technology to help with revenue management?
• What will your online reputation management strategy be? How will you collect and respond to online reviews?
• What will your distribution mix look like? How will you drive reservations across a variety of channels?

10. Financial plan

Your financial projections are the most challenging but arguably the most crucial part of your hotel business plan. In this section, you should include the following:

• Start-up costs. How much money will you need from lenders to operate your hotel? Consider business licenses, furniture, down payments, etc.
• Operating costs . How much money will you need to keep your business running? Consider staffing costs, guest acquisition costs, mortgage payments, utilities, SaaS payments, etc.
• Income statement . What will your revenue, expenses, and profit be over the first 3-5 years of business?
• Cash flow projections . How will cash flow in and out of your business? Show what capital investment you’ll need to start.
• Balance sheet . Identify your assets, liabilities, and equity.

If you’re looking for a potential investor, your financial plan will be the section they care about most. Here, you must prove how your business will provide a return on investment. Don’t forget to include an Appendix that shows more detailed reporting and financial figures.

8 tips for creating an effective plan

1. Start with the section that excites you the most! Covering all the topics outlined above can feel overwhelming, so don’t feel pressured to go in order.

2. Reach out to a business owner you admire. No matter what type of business you’re starting, getting advice from another business owner is always helpful. Reach out to a successful local business owner to see if they’d be willing to share some insights they learned along the way.

3. Be concise. While there’s a lot to cover, you must be concise in each section of your plan. Include any additional research or documentation in the appendix to keep your business plan clean.

4. Try to avoid industry jargon. Depending on what type of investor is reading your plan, they may find jargon irrelevant and distracting.

5. Ensure you have a clear competitive advantage. You should be able to state in one sentence what makes your property unique. This unique selling point (USP) will be prominent in all of your marketing materials.

6. Set SMART goals. Setting specific, measurable, achievable, relevant, and time-bound goals is important to stay organized and on track to reach milestones.

7. Don’t forget about your plan. You will have spent hours developing your plan, so make sure you use it! Reference your plan as you build and grow your business , and remember that it’s ok if things change.

8. Illustrate your passion. Communicate why you want to be a part of the hospitality industry. Passion is contagious and gives investors more confidence that you will work hard to achieve your dreams.

What do you need to start a hotel business?

Ok, so you’ve read through this article and are now wondering — what’s next? Ensure you have the following items on your radar to start your business.

• A vision. Know exactly what kind of business you want to build (a quaint bed and breakfast is very different from a large-scale resort).
• A business plan. Stay on track with a well-developed business plan.
• A location. Decide if you want to build a new property or renovate an existing hotel.
• Capital. Do you need to raise an upfront capital investment? Remember that new businesses usually aren’t profitable for the first few years and will need cash flow to pay for expenses.
• Business licenses & permits. Depending on the type of property and its services, you’ll need an occupancy permit, alcohol license, food service license, sales tax license, etc.
• Technology. Choose technology to help streamline operations and earn more revenue.
• Furniture & equipment. You must furnish your property with the proper furniture, electronics, appliances, etc.
• Staff. Take time hiring staff you can trust and who understand your hotel’s brand and vision.

Final thoughts

Your business plan provides the foundation for your new business and outlines the next steps in the journey. Ensure you fully understand the market and competitive landscape to enter the industry prepared for the future. Start slow and invest in the right people and technology to support the growth of your business.

Looking to start a hotel? Download the technology guide. Download now

About Lana Cook

Lana Cook is a Content Writer at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help businesses thrive. When she’s not busy writing, you can find her checking out the latest movie or searching for a new TV show to binge.

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Sample Hotel Business Plan

Writing a business plan is a crucial step in starting a hotel. Not only does it provide structure and guidance for the future, but it also helps to create funding opportunities and attract potential investors. For aspiring hotel owners, having access to a sample hotel business plan can be especially helpful in providing direction and gaining insight into how to draft their own hotel business plan.

Download our Ultimate Hotel Business Plan Template

Having a thorough business plan in place is critical for any successful hotel venture. It will serve as the foundation for your operations, setting out the goals and objectives that will help guide your decisions and actions. A well-written business plan can give you clarity on realistic financial projections and help you secure financing from lenders or investors. A hotel business plan example can be a great resource to draw upon when creating your own plan, making sure that all the key components are included in your document.

The hotel business plan sample below will give you an idea of what one should look like. It is not as comprehensive and successful in raising capital for your hotel as Growthink’s Ultimate Hotel Business Plan Template , but it can help you write a hotel business plan of your own.

Hotel Business Plan Example – StaySerenity Inn

Table of contents, executive summary, company overview, industry analysis, customer analysis, competitive analysis, marketing plan, operations plan, management team, financial plan.

StaySerenity Inn is an innovative hospitality venture located in the heart of Tucson, Arizona, dedicated to providing guests with a tranquil and serene stay experience. Our mission is to offer high-quality accommodations that blend modern comforts with the unique charm and beauty of the Southwest. We aim to cater to a wide array of guests, from business travelers to families seeking a peaceful retreat. By prioritizing customer satisfaction and leveraging the picturesque landscape and cultural richness of Tucson, we are committed to becoming a leading choice for travelers seeking comfort, peace, and a touch of local flavor in their accommodations.

Our success is built on a foundation of identifying and capitalizing on key factors that set us apart in the competitive hospitality market. To date, we have made significant strides in establishing a strong brand identity, highlighted by our commitment to exceptional customer service and creating a serene guest experience. Our strategic location, which combines accessibility with scenic beauty, plays a crucial role in attracting our target clientele. Additionally, our focus on sustainability and community engagement has not only enhanced our brand image but has also fostered positive relationships with local businesses and stakeholders. These accomplishments are testament to our dedication to excellence and innovation in the hospitality industry.

The hospitality industry is witnessing a dynamic shift, with travelers increasingly seeking personalized and unique stay experiences over conventional hotel accommodations. This trend is particularly pronounced in destinations like Tucson, Arizona, where the blend of natural beauty, cultural heritage, and recreational activities attracts a diverse visitor base. The market shows a growing preference for accommodations that offer a sense of place and connection to the local community, alongside modern amenities and sustainable practices. This evolving landscape presents both challenges and opportunities for StaySerenity Inn, as we strive to meet the changing preferences of travelers while standing out amidst the competition through our unique value proposition.

Our target customers encompass a broad spectrum of travelers who share a common desire for a tranquil and immersive stay experience. This includes business professionals seeking a quiet retreat after a day of meetings, families looking for a comfortable and engaging place to stay during vacations, and solo travelers drawn to the cultural and natural attractions of Tucson. Our marketing efforts are tailored to resonate with these segments, emphasizing the serene environment, personalized service, and access to local experiences that StaySerenity Inn offers. Understanding the diverse needs and preferences of our target customers is crucial to our strategy, guiding our service offerings and marketing messages to effectively attract and retain our desired clientele.

StaySerenity Inn’s competitive advantage lies in our ability to offer a peaceful and personalized stay experience that seamlessly integrates the natural and cultural richness of Tucson. Unlike our competitors, we emphasize tranquility and a deep connection to the local environment, catering to those seeking a more serene and authentic travel experience.

Our marketing plan revolves around highlighting the unique aspects of StaySerenity Inn, including our serene location, personalized services, and commitment to sustainability. We offer a range of accommodations and pricing options to suit various needs, from luxurious suites to more affordable rooms, all designed with tranquility and comfort in mind. Our promotions plan is multifaceted, encompassing digital marketing campaigns, partnerships with local businesses, and special package deals that showcase the value and unique experiences available at StaySerenity Inn. By leveraging social media, search engine optimization, and targeted advertising, we aim to increase our visibility and attract our target customer segments effectively.

Our operations plan is structured around key milestones that are crucial for the successful launch and growth of StaySerenity Inn. These include securing a prime location, obtaining necessary permits and licenses, completing the building and furnishing of our hotel to meet our brand standards, and hiring and training a committed team. We are focused on implementing an effective marketing strategy, launching our hotel with a strong online presence, and achieving operational excellence to ensure guest satisfaction and financial success. Establishing partnerships with local businesses and attractions is also a priority, enhancing our guests’ experience and supporting our goal of reaching $15,000/month in revenue.

Our management team is composed of experienced professionals with a diverse set of skills and a shared passion for hospitality. This team brings together expertise in hotel management, customer service, marketing, and sustainability practices, ensuring that every aspect of StaySerenity Inn’s operations is guided by knowledge and a commitment to excellence. Our leadership’s dedication to creating a serene and memorable guest experience is at the core of our business philosophy, driving our efforts to achieve success in the competitive Tucson hospitality market.

Welcome to StaySerenity Inn, a new beacon of hospitality in Tucson, AZ. As a local hotel, we take pride in introducing a high-quality lodging experience that has been missing in our community. Our commitment is to provide an unparalleled stay for all our guests, ensuring they find a serene and comfortable environment every time they choose us.

At StaySerenity Inn, our offerings are comprehensive and tailored to meet the needs of every guest. Our accommodation services are top-notch, designed to ensure comfort, security, and the best of modern amenities. Dining and catering at our hotel promise an exquisite culinary journey, with dishes prepared by top chefs that cater to a variety of tastes and dietary requirements. For those seeking an effortless and enjoyable stay, our concierge and guest services are always on hand to assist with any needs, from booking tours to making restaurant reservations. Our housekeeping and maintenance teams ensure that all aspects of the hotel are pristine and functioning optimally, creating a clean and welcoming environment for our guests. Additionally, our recreational and wellness facilities, including a spa, gym, and pool, offer guests the chance to unwind and maintain their health and well-being while staying with us.

Located in the heart of Tucson, AZ, StaySerenity Inn serves both the local community and travelers visiting this vibrant city. Our strategic location allows easy access to the best that Tucson has to offer, including cultural sites, natural parks, shopping, and dining experiences, making us a perfect choice for those looking to explore the area.

Our unique position for success stems from several key factors. Firstly, our founder brings invaluable experience from previously running a successful hotel, ensuring that StaySerenity Inn benefits from proven strategies and a deep understanding of the hospitality industry. Additionally, we are committed to offering superior guest and accommodation services compared to our competition, setting new standards for what guests can expect during their stay.

Since our inception on January 3, 2024, as a Limited Liability Company, we have made significant strides in establishing StaySerenity Inn as a premier destination for guests. Our accomplishments to date include the creation of a distinctive logo that represents our brand’s values, the careful selection of a company name that communicates our mission, and securing a prime location that complements our offerings. These achievements mark the beginning of our journey to becoming a cornerstone of hospitality in Tucson, AZ.

The hotel industry in the United States is a robust and thriving market, with an estimated size of over $200 billion in revenue annually. This industry encompasses a wide range of accommodation options, from luxury resorts to budget-friendly motels, catering to a diverse range of travelers and tourists. With an increasing demand for travel and tourism in the country, the hotel industry is poised for continued growth in the coming years.

Market research indicates that the hotel industry in the United States is expected to experience steady growth in the upcoming years, driven by factors such as a growing economy, rising disposable incomes, and an increasing preference for travel experiences. As more Americans choose to explore different destinations and seek unique lodging options, the demand for hotels is expected to rise, creating opportunities for new players in the market like StaySerenity Inn.

Recent trends in the hotel industry, such as the rise of experiential travel, the popularity of boutique hotels, and the increasing focus on sustainability and eco-friendly practices, bode well for StaySerenity Inn. By offering personalized experiences, eco-conscious amenities, and a convenient location in Tucson, AZ, StaySerenity Inn is well-positioned to attract a growing segment of travelers who seek unique and memorable stays. With a focus on customer satisfaction and a commitment to providing exceptional service, StaySerenity Inn is poised to succeed in the thriving hotel industry in the United States.

Below is a description of our target customers and their core needs.

Target Customers

StaySerenity Inn will target local residents seeking a luxurious getaway without the need to travel far from home. This customer segment includes couples looking for a romantic weekend escape, families desiring a convenient vacation spot, and individuals needing a serene environment for relaxation or personal reflection. The Inn will tailor its offerings to cater to these local demands, from personalized spa services to family-friendly activities and romantic packages.

Aside from local residents, StaySerenity Inn will also attract business travelers who value convenience, comfort, and exceptional service. These customers often seek accommodations that provide a seamless blend of work and leisure amenities. The Inn will equip its facilities with state-of-the-art business centers, high-speed internet, and meeting rooms to meet the needs of this segment, while also offering leisure amenities that encourage relaxation after a day of work.

Additionally, StaySerenity Inn will target tourists and adventure-seekers visiting Tucson for its unique attractions and outdoor activities. This segment is drawn to experiences that are both enriching and authentic, from exploring the Sonoran Desert to cultural tours in the city. The Inn will offer customized tour packages and adventure experiences, making it an attractive choice for those wishing to explore the natural beauty and cultural richness of Tucson.

Customer Needs

StaySerenity Inn fulfills the essential need for high-quality accommodation, catering to guests seeking comfort, modern amenities, and exceptional service. Guests can expect meticulously designed rooms that blend luxury with functionality, ensuring a restful and productive stay. The Inn prioritizes cleanliness and customer care, making it a preferred choice for discerning travelers.

Understanding the diverse needs of its guests, StaySerenity Inn also offers a range of guest services designed to enhance their stay. From a concierge ready to assist with local recommendations to seamless check-in and check-out processes, every aspect is crafted to meet the high expectations of its guests. Additionally, amenities such as high-speed internet, a state-of-the-art fitness center, and on-site dining options cater to both leisure and business travelers alike.

Beyond the basics, StaySerenity Inn recognizes the growing demand for personalized experiences. Guests can enjoy tailor-made services, including room customization and event planning assistance, ensuring their stay is as unique as their preferences. This attention to detail not only satisfies the immediate needs of its guests but also fosters a lasting relationship, encouraging repeat visits.

StaySerenity Inn’s competitors include the following companies:

Hotel McCoy is an art hotel that focuses on local culture and retro vibes, offering its guests a unique blend of modern amenities and mid-century charm. The hotel provides services such as an outdoor pool, a fitness center, and a bar, all adorned with works from local artists. Its price points are moderate, making it accessible to a wide range of customers seeking an artsy yet affordable stay. Hotel McCoy serves not only tourists but also locals looking for a staycation with a twist. Its key strength lies in its unique branding and strong local partnerships. However, its reliance on a niche market could be considered a weakness, as it may not appeal to all segments of the broader traveler market.

Arizona Inn is an upscale, historic hotel known for its luxurious accommodations and exceptional service. It offers a range of services including fine dining, a swimming pool, tennis courts, and beautifully manicured gardens. The price points are on the higher end, targeting affluent travelers seeking a premium experience. Located in a serene part of Tucson, it attracts both leisure and business travelers who appreciate its quiet elegance and attention to detail. Arizona Inn’s key strengths are its historic charm, high-quality service, and exclusive ambiance. A potential weakness is its higher price point, which may limit its accessibility to a broader audience.

Hacienda Del Sol Guest Ranch Resort blends the rustic charm of a historic ranch with the luxury of a top-tier resort. It offers a variety of accommodations from rooms to private casitas, alongside amenities such as horseback riding, spa services, and fine dining. The resort caters to a premium segment, with price points reflecting its upscale offerings. It serves a diverse clientele, including couples on romantic getaways, families, and corporate groups. Hacienda Del Sol’s strengths include its unique historical background, extensive amenities, and breathtaking desert views. However, its niche appeal as a luxury ranch resort may not cater to all preferences, particularly those looking for a more urban or contemporary setting.

Competitive Advantages

At StaySerenity Inn, we pride ourselves on surpassing the expectations of our guests through unparalleled accommodation and guest services. Our dedication to creating a memorable and comfortable experience is evident in every aspect of our operations. We understand that the little details make a big difference, which is why we offer personalized services tailored to the specific needs of each guest. From the moment they check in, guests can expect a warm, welcoming atmosphere coupled with state-of-the-art amenities designed to cater to both leisure and business travelers. Our staff is trained to go above and beyond, ensuring that every stay is seamless and every guest feels valued and cared for.

Beyond our exceptional service, StaySerenity Inn stands out in the competitive Tucson hospitality market through our innovative approach to guest engagement and satisfaction. We leverage cutting-edge technology to enhance the guest experience, from mobile check-in and digital room keys to personalized room settings that can be adjusted before arrival. Additionally, our strategic location offers easy access to local attractions, making us an ideal choice for guests looking to explore the best of Tucson. Our commitment to sustainability and eco-friendly practices also sets us apart, appealing to environmentally conscious travelers seeking a green lodging option. By focusing on these areas, we not only meet but exceed the expectations of our guests, securing a competitive edge in the market.

Our marketing plan, included below, details our products/services, pricing and promotions plan.

Products and Services

StaySerenity Inn offers a variety of services tailored to meet the needs of every guest, ensuring a comfortable and memorable stay. The Inn prides itself on providing exceptional accommodation, dining experiences, and a comprehensive range of guest services and amenities aimed at enhancing the overall experience of its visitors.

Accommodation Services: Guests can expect to find a wide range of room and suite options designed to cater to diverse preferences and budgets. From standard rooms to luxurious suites, each space is meticulously furnished and equipped with modern amenities. Prices for accommodation services vary depending on the type and season but generally start at around $120 per night for a standard room, offering comfort and value to both leisure and business travelers.

Dining and Catering: The Inn features an on-site restaurant that serves a variety of gourmet dishes prepared with fresh, local ingredients. Guests can enjoy breakfast, lunch, and dinner in a cozy and elegant setting. For those who prefer dining in the comfort of their own room, room service is also available. The average price for a main course at the restaurant is approximately $25. Additionally, catering services for events and meetings are available upon request, with prices varying based on the menu and number of guests.

Concierge and Guest Services: StaySerenity Inn’s concierge team is dedicated to ensuring guests have a delightful and hassle-free stay. Services include booking tours and excursions, making restaurant reservations, arranging transportation, and more. While many of these services are complimentary, some, like guided tours and special event tickets, are available at an additional cost, depending on the activity.

Housekeeping and Maintenance: The Inn maintains the highest standards of cleanliness and comfort in all guest rooms and public areas. Daily housekeeping services are included in the room rate, ensuring that rooms are fresh and tidy. Maintenance issues are addressed promptly to ensure that all facilities are in perfect working order, contributing to a seamless guest experience.

Recreational and Wellness Facilities: For guests looking to relax and rejuvenate, StaySerenity Inn offers an array of recreational and wellness facilities, including a fitness center, outdoor pool, and spa. Access to the fitness center and pool is complimentary for all guests, while spa services, such as massages and treatments, are available for an additional fee, typically starting at $50 depending on the service.

At StaySerenity Inn, guests can expect a harmonious blend of comfort, luxury, and attentive service, all designed to make their stay in Tucson as enjoyable and relaxing as possible.

Promotions Plan

To attract customers, StaySerenity Inn employs a multifaceted approach to promotion, leveraging the power of online marketing while incorporating traditional and innovative tactics to ensure visibility and appeal. Understanding the importance of digital presence, StaySerenity Inn invests in a robust online marketing strategy. This includes a user-friendly website showcasing the hotel’s amenities, rooms, and services with high-quality images and virtual tours, allowing potential guests to experience the comfort and serenity of the hotel before they book. Social media platforms play a crucial role in this strategy, with regular posts highlighting special offers, guest reviews, and events at the hotel, engaging directly with a broad audience.

Email marketing campaigns are another essential component, targeting past guests and potential customers with personalized offers, updates, and newsletters, keeping StaySerenity Inn top of mind. Search Engine Optimization (SEO) ensures that when potential guests search for accommodations in Tucson, AZ, StaySerenity Inn appears among the top results, increasing its visibility and attracting more traffic to its website. Pay-per-click (PPC) advertising also amplifies this effect, targeting specific demographics and interests to drive bookings.

Beyond online marketing, StaySerenity Inn engages in local community events and partnerships with local businesses to build relationships and enhance its reputation. Hosting and sponsoring local events not only showcases the hotel’s commitment to the community but also provides direct exposure to potential guests. Collaborations with local attractions, restaurants, and businesses offer guests unique packages and experiences, making StaySerenity Inn a preferred choice for those looking to explore Tucson.

Furthermore, StaySerenity Inn implements a referral program, encouraging satisfied guests to refer friends and family with incentives, such as discounts on future stays. This word-of-mouth promotion is invaluable, building a loyal customer base and generating positive buzz around the hotel.

Lastly, StaySerenity Inn recognizes the importance of professional networking and will maintain a presence in local and regional hospitality associations, attending trade shows and networking events to forge connections within the industry, learn from peers, and stay ahead of trends that can enhance the guest experience.

Through these comprehensive promotional methods and tactics, StaySerenity Inn expects to not only attract customers but also create memorable experiences that encourage repeat visits and build a strong, loyal customer base in Tucson, AZ.

Our Operations Plan details:

• The key day-to-day processes that our business performs to serve our customers
• The key business milestones that our company expects to accomplish as we grow

Key Operational Processes

To ensure the success of StaySerenity Inn, there are several key day-to-day operational processes that we will perform.

• Check-in and Check-out Procedures: Efficiently manage guest check-ins and check-outs to minimize wait times and ensure a smooth process for guests. This includes preparing key cards, processing payments, and providing guests with all necessary information about their stay.
• Room Cleaning and Maintenance: Ensure that all rooms are thoroughly cleaned, sanitized, and ready for new guests by a specific time each day. This also involves regular maintenance checks to fix any issues such as plumbing problems, electrical faults, or general wear and tear.
• Customer Service: Provide excellent customer service at all times, including handling guest inquiries, complaints, and requests promptly and professionally. This also involves offering concierge services to help guests with restaurant reservations, directions, and recommendations for local attractions.
• Inventory Management: Regularly check and restock supplies such as toiletries, linens, and minibar items to ensure that everything guests might need is always available. This also includes managing inventory for the hotel’s restaurant or cafe if applicable.
• Food and Beverage Services: If the hotel has its own dining facilities, manage the operations of these services, including meal preparation, service quality, and hygiene standards. This also involves menu planning and ensuring that dietary requirements can be catered to.
• Financial Management: Monitor daily revenues and expenses to keep track of the hotel’s financial health. This includes processing payments, managing invoices, and preparing financial reports.
• Marketing and Promotions: Implement ongoing marketing strategies to attract new guests and encourage repeat business. This can include managing the hotel’s online presence, offering special promotions, and maintaining loyalty programs.
• Staff Management: Schedule and manage staff to ensure that all areas of the hotel are adequately covered. This involves training employees, managing shifts, and ensuring that the team works well together to provide the best possible service to guests.
• Health and Safety Compliance: Ensure that the hotel complies with all local health and safety regulations to provide a safe environment for guests and staff. This includes regular safety drills, food safety checks, and ensuring that all safety equipment is in place and working properly.
• Feedback Collection and Analysis: Collect feedback from guests through various channels such as comment cards, online reviews, and direct feedback to staff. Analyze this feedback to identify areas for improvement and implement changes where necessary.

StaySerenity Inn expects to complete the following milestones in the coming months in order to ensure its success:

• Identifying and Securing a Prime Location : Finding a location that is both appealing to potential guests and financially viable is crucial. This should be in proximity to local attractions, business centers, or natural beauty spots to attract a wide range of customers.
• Obtaining Necessary Permits and Licenses : Ensuring compliance with local regulations by obtaining all necessary permits and licenses for operation. This includes health and safety inspections, building codes, and any specific hospitality industry regulations in Tucson, AZ.
• Building and Furnishing the Hotel : Completing the construction or renovation of the hotel premises to meet the brand standards of StaySerenity Inn. This includes interior design and furnishing that align with the target market’s expectations and the brand’s image.
• Hiring and Training Staff : Recruiting a team of professionals who are committed to providing excellent customer service. This involves hiring for various positions including management, front desk, housekeeping, and any other roles necessary for the operation. Training is essential to ensure the team delivers service that meets the brand’s standards.
• Marketing and Promotional Activities : Implementing an effective marketing strategy to build brand awareness and attract guests. This includes digital marketing efforts, local advertising, partnerships with local businesses, and creating attractive packages or promotions.
• Launch Our Hotel : Officially opening StaySerenity Inn to the public. This milestone may include a soft launch period to gather initial feedback and make adjustments before the grand opening.
• Build a Strong Online Presence and Reputation Management : Developing a robust online presence through a user-friendly website, social media platforms, and listings on hotel booking sites. Actively managing online reviews and customer feedback to maintain a positive reputation.
• Achieve Operational Excellence : Streamlining operations to ensure guest satisfaction, efficient use of resources, and effective management of operational costs. This includes continuous training for staff, maintaining high standards of cleanliness and safety, and implementing eco-friendly practices.
• Get to $15,000/Month in Revenue : Reaching the financial milestone of generating $15,000 in monthly revenue. This will involve continuously analyzing performance, adjusting pricing strategies, and enhancing marketing efforts to increase occupancy rates and average daily rates.
• Establish Partnerships with Local Businesses and Attractions : Creating partnerships with local businesses, tour operators, and attractions to offer guests unique experiences and packages. This will not only enhance the guest experience but also contribute to increasing the hotel’s visibility and attractiveness. By achieving these milestones, StaySerenity Inn can mitigate risks and build a solid foundation for long-term success in Tucson, AZ.

StaySerenity Inn management team, which includes the following members, has the experience and expertise to successfully execute on our business plan:

Carter Mitchell, CEO

Carter Mitchell brings a wealth of experience and a proven track record to the role of CEO at StaySerenity Inn. With a history of noteworthy success in the hospitality industry, his leadership is rooted in practical experience, having previously managed a hotel with distinction. This background has afforded him a deep understanding of what it takes to run a successful lodging establishment, from operational efficiency to exceptional customer service. Mitchell’s strategic thinking, combined with his hands-on experience, positions him uniquely to propel StaySerenity Inn towards lasting success. His leadership skills and industry knowledge are critical in ensuring that the Inn not only meets but exceeds the expectations of its guests.

To reach our growth goals, StaySerenity Inn requires significant funding. This investment will be allocated towards securing our location, completing necessary renovations and furnishings in line with our brand vision, and covering operational costs until we reach our revenue targets. Our financial strategy is designed to ensure that we effectively manage our resources to establish a solid foundation for profitability and long-term success.

Financial Statements

Balance sheet.

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Income Statement

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Cash Flow Statement

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Hotel Business Plan Example PDF

Download our Hotel Business Plan PDF here. This is a free hotel business plan example to help you get started on your own hotel plan.  

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How to Write a Successful Hotel Business Plan + Template

Creating a business plan is essential for any business, but it can be especially helpful for hotel businesses who want to improve their strategy and/or raise funding.

A well-crafted business plan not only outlines the vision for your company, but also documents a step-by-step roadmap of how you are going to accomplish it. In order to create an effective business plan, you must first understand the components that are essential to its success.

This article provides an overview of the key elements that every hotel business owner should include in their business plan.

Download the Ultimate Hotel Business Plan Template

What is a Hotel Business Plan?

A hotel business plan is a formal written document that describes your company’s business strategy and its feasibility. It documents the reasons you will be successful, your areas of competitive advantage, and it includes information about your team members. Your business plan is a key document that will convince investors and lenders (if needed) that you are positioned to become a successful venture.

Why Write a Hotel Business Plan?

A hotel business plan is required for banks and investors. The document is a clear and concise guide of your business idea and the steps you will take to make it profitable.

Entrepreneurs can also use this as a roadmap when starting their new company or venture, especially if they are inexperienced in starting a business.

Writing an Effective Hotel Business Plan

The following are the key components of a successful hotel business plan:

Executive Summary

The executive summary of a hotel business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.

• Start with a one-line description of your hotel company
• Provide a short summary of the key points in each section of your business plan, which includes information about your company’s management team, industry analysis, competitive analysis, and financial forecast among others.

Company Description

This section should include a brief history of your company. Include a short description of how your company started, and provide a timeline of milestones your company has achieved.

If you are just starting your hotel business, you may not have a long company history. Instead, you can include information about your professional experience in this industry and how and why you conceived your new venture. If you have worked for a similar company before or have been involved in an entrepreneurial venture before starting your hotel firm, mention this.

You will also include information about your chosen hotel business model and how, if applicable, it is different from other companies in your industry.

Industry Analysis

The industry or market analysis is an important component of a hotel business plan. Conduct thorough market research to determine industry trends and document the size of your market. 

Questions to answer include:

• What part of the hotel industry are you targeting?
• How big is the market?
• What trends are happening in the industry right now (and if applicable, how do these trends support the success of your company)?

You should also include sources for the information you provide, such as published research reports and expert opinions.

Customer Analysis

This section should include a list of your target audience(s) with demographic and psychographic profiles (e.g., age, gender, income level, profession, job titles, interests). You will need to provide a profile of each customer segment separately, including their needs and wants.

For example, a hotel business’ customers may include:

• Business travelers
• Leisure travelers
• Groups and conventions
• Wedding parties
• Local residents

You can include information about how your customers make the decision to buy from you as well as what keeps them buying from you.

Develop a strategy for targeting those customers who are most likely to buy from you, as well as those that might be influenced to buy your products or hotel services with the right marketing.

Competitive Analysis

The competitive analysis helps you determine how your product or service will be different from competitors, and what your unique selling proposition (USP) might be that will set you apart in this industry.

For each competitor, list their strengths and weaknesses. Next, determine your areas of competitive differentiation and/or advantage; that is, in what ways are you different from and ideally better than your competitors.

Below are sample competitive advantages your hotel business may have:

• Location : if your hotel is located in an ideal spot for leisure or business travelers, this could be a key competitive advantage
• Amenities : if your hotel offers unique amenities that are appealing to your target market segments, this could give you a leg up on the competition
• Customer service : if you focus on delivering exceptional customer service, this could be a key selling point

Marketing Plan

This part of the business plan is where you determine and document your marketing plan. . Your plan should be clearly laid out, including the following 4 Ps.

• Product/Service : Detail your product/service offerings here. Document their features and benefits.
• Price : Document your pricing strategy here. In addition to stating the prices for your products/services, mention how your pricing compares to your competition.
• Place : Where will your customers find you? What channels of distribution (e.g., partnerships) will you use to reach them if applicable?
• Promotion : How will you reach your target customers? For example, you may use social media, write blog posts, create an email marketing campaign, use pay-per-click advertising, launch a direct mail campaign. Or you may promote your hotel business via public relations (PR), speaking engagements, or other thought-leadership activities.

Operations Plan

This part of your hotel business plan should include the following information:

• How will you deliver your product/service to customers? For example, will you do it in person or over the phone only?
• What infrastructure, equipment, and resources are needed to operate successfully? How can you meet those requirements within budget constraints?

The operations plan is where you also need to include your company’s business policies. You will want to establish policies related to everything from customer service to pricing, to the overall brand image you are trying to present.

Finally, and most importantly, in your Operations Plan, you will lay out the milestones your company hopes to achieve within the next five years. Create a chart that shows the key milestone(s) you hope to achieve each quarter for the next four quarters, and then each year for the following four years. Examples of milestones for a hotel business include reaching $X in sales. Other examples include adding new locations, launching a new product/service, or hiring new employees.

Management Team

List your team members here including their names and titles, as well as their expertise and experience relevant to your specific hotel industry. Include brief biography sketches for each team member.

Particularly if you are seeking funding, the goal of this section is to convince investors and lenders that your team has the expertise and experience to execute on your plan. If you are missing key team members, document the roles and responsibilities you plan to hire for in the future.

Financial Plan

Here you will include a summary of your complete and detailed financial plan (your full financial projections go in the Appendix). 

This includes the following three financial statements:

Income Statement

Your income statement should include:

• Revenue: how much revenue you generate.
• Cost of Goods Sold: These are your direct costs associated with generating revenue. This includes labor costs, as well as the cost of any equipment and supplies used to deliver the product/service offering.
• Net Income (or loss): Once expenses and revenue are totaled and deducted from each other, this is the net income or loss

Sample Income Statement for a Startup Hotel Business

Balance sheet.

Include a balance sheet that shows your assets, liabilities, and equity. Your balance sheet should include:

• Assets : All of the things you own (including cash).
• Liabilities : This is what you owe against your company’s assets, such as accounts payable or loans.
• Equity : The worth of your business after all liabilities and assets are totaled and deducted from each other.

Sample Balance Sheet for a Startup Hotel Business

Cash flow statement.

Include a cash flow statement showing how much cash comes in, how much cash goes out and a net cash flow for each year. The cash flow statement should include:

• Cash Flow From Operations
• Cash Flow From Investments
• Cash Flow From Financing

Below is a sample of a projected cash flow statement for a startup hotel business.

Sample Cash Flow Statement for a Startup Hotel Business

You will also want to include an appendix section which will include:

• Your complete financial projections
• A complete list of your company’s business policies and procedures related to the rest of the business plan (marketing, operations, etc.)
• Any other documentation which supports what you included in the body of your business plan.

Writing a good business plan gives you the advantage of being fully prepared to launch and/or grow your hotel company. It not only outlines your business vision but also provides a step-by-step process of how you are going to accomplish it.

As you can see, there is a lot that goes into creating a successful hotel business plan. But with careful planning and execution, you can set your hotel business up for success.  

Finish Your Hotel Business Plan in 1 Day!

Hotel Business Plan Template [Updated 2024]

Hotel Business Plan

If you want to start a new hotel business or expand your existing hotel, you need an effective business plan.

The following hotel business plan template gives you the key elements to include in a solid business plan. In addition to this template, a solid plan will also include market research to help you better understand the hospitality industry trends, and how you plan to attract customers. It will also help you craft your mission statement, marketing plan and strong financial projections.

You can download our Hotel Business Plan Template (including a full, customizable financial model) to your computer here.

Sample Business Plan For a Boutique Hotel

Below are links to each of the key sections of a comprehensive business plan for a hotel:

• Executive Summary – The executive summary provides an overview of your business opportunity and summarizes the business plan.
• Company Overview – The company analysis includes information about your hotel concept, the hotel’s services and business structure.
• Industry Analysis – The industry analysis includes market research that supports your business and provides insights into market trends and the hotel industry.
• Customer Analysis – The customer analysis provides an overview of your target market.
• Competitive Analysis – The competitive analysis should identify your local competition (other hotel businesses, Airbnbs, etc.) and highlight your unique selling point.
• Marketing Plan – The marketing plan includes your hotel marketing strategy, pricing strategy and search engine optimization plan.
• Operations Plan – The operations plan includes information on your hotel operations and processes along with your business goals for long-term growth.
• Management Team – The management team section includes a profile of the hotel owner and hotel management team, their experience and job descriptions.
• Financial Plan – The financial plan includes financial projections, a cash flow statement, profit and loss statement and balance sheet.

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Hotel Business Plan Outline

Hotel Business Plan

You’ve probably decided to follow your dreams and open your very own hotel. But before you begin spending your financial resources and designing your hotel blueprint, you need to have a hotel business plan . It will guide you every step of the way and serve as your road map to the opening.

14+ Hotel Business Plan Examples

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What is a Hotel Business Plan?

A hotel business plan contains the goals of the owners, the methods, and the timeframe for accomplishing them. It also describes the hotel as a business, its recorded history, as well as its financial projections and information. They serve as a road map for the owners on how to run the hotel.

How to Create a Hotel Business Plan

Statista reports that as of March 2020, the average daily rate of hotels in the United States to be $110.66 million. The current state of the world shows how a hotel business can go down without specific content in the plan. It has to be adaptable with unexpected events occurring all over the world by finding new ways of providing service and gaining profit. If you have never made a hotel business plan before, check out these tips for some ideas on your design.

1. Add Executive Summary

Place the executive summary in your business plan’s introduction. Your mission statement serves as an introduction to your design. It’s typically a one-line statement that describes the essence of your company. This explains why you are in business or the market’s need for your services. Your plan’s objectives or business goals will then specify what you hope to accomplish with this corporate venture.

2. Write Down Company Analysis

The concept you have for your hotel should contain a unique selling point to succeed in a competitive market. This general analysis comprises the distinctive qualities that differentiate your hotel business from others. Provide detailed information for this section to make it easier for investors and other stakeholders to grasp your ideas.

3. Present Market Analysis

Market research and customer analysis is a vital aspect of your document. After all, you can’t serve a market you know nothing about. In-depth information about your target customers will help you determine the primary needs of this market segment in terms of location, amenities, and service.

4. Discuss Operations Plan

This constitutes the management responsible for running key aspects of the business. You need to identify the type of staff members and administrative body your hotel business requires, such as the number of employees and their responsibilities.

FAQ’s

Do i pay for my hotel stay before or after i check-in.

Generally, most hotels charge you for your stay when you are checking out, right after your stay in the hotel. However, you can also pay beforehand for your stay if you wish to book a room in advance.

Is a hotel a good investment?

Hotels are generally a good investment and make for an excellent source of income as long as you have a large market and an effective way to draw in customers. The economy can significantly impact the success or failure of your hotel.

Who creates the hotel business plan?

It is usually the owner of the hotel who comes up with the business plan. However, one must be business savvy and have an education in hotel management when it comes to this. If the owner is not very knowledgeable, they can have a team prepare it for them instead.

Hotels vary depending on the characteristics they possess, including the services that they provide, the location, the prices, and whether the establishment is an independent firm or part of a chain operation. Whether you own a startup bed and breakfast or a 5-star luxury hotel, the only way it will thrive is to have a solid hotel business plan to guide your endeavors in the hospitality industry.

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Whether your business is a rustic retreat or a high-end bed and breakfast, these sample business plans for hotels, inns, resorts, and other lodging businesses will help you write a business plan that will guide you to business success.

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15+ hotel business plan samples – pdf, word.

Hotels are one of the most lucrative businesses one can get into. They are especially profitable if the hotel business plan in question is located in a busy city or near a popular tourist destination. Being part of the hospitality industry, you will never run out of customers as long as your hotel is managed properly. To run your hotel plan profitability, you must have a proper business plan that will help you dance your worries away. We have various hotel business plan templates applicable for various related businesses and accommodations such as a startup mini hotel, guest house motel, 5 star resort lodge, 3 star spa, and boutique, etc. Keep scrolling!

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Business Plan Sections

1. executive summary, 2. company analysis, 3. industry analysis, 4. customer analysis, 5. competitive analysis, 6. marketing plan, 7. operations plan, 8. management team, 9. financial plan, 10. appendix, free lotus sea hot spring 5-star hotel business plan sample.

Free Start-up Boutique New Hotel Sample Business Plan

General FAQs

1. what is a hotel business plan, 2. what is the purpose of using a hotel business plan, 3. what should a hotel business plan include.

• Executive summary
• A detailed sample analysis of your company and the work you do
• Industry and market analysis
• Client and customer evaluation
• Your competitors and other sources
• Marketing and operation plan, etc.

4. What Is a Successful Business Plan?

5. how do you write a hotel business plan.

• Operations : explain how your organization will operate daily
• Management : mention your management team
• Financial details : this is where you mention all key finances
• Project planning : define all the targets you want to hit
• Appendix and other details.

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Business handbook template, sample startup plan template, sample hotel business plan template, resort hotel business plan template, hotel catering business plan template, luxury hotel business plan template, new start-up boutique hotel business plan template, lotus sea hot spring 5-star hotel business plan sample template, feasibility study and hotel business plan sample template.

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How to start a hotel business

Have you dreamed of running your own hotel? Maybe you’d love to run a coastal B&B, manage your own luxury boutique countryside hotel, or take on the construction of a large-scale beach resort. Whatever your ambitions, with an MBA in Global Hospitality Management you’ll learn all the business know-how and hospitality management skills you need to build your own successful hotel business.

How much does it cost to start a hotel?

The costs of starting a hotel will vary widely depending on location, size and quality, but there are some average costs that can help to put an estimated figure on a typical hotel start-up. According to HVS, the average cost (including land, construction, legal and furnishing costs) of a budget hotel room is around $79k, a mid-scale room $139k and a luxury room $604k.

What are the typical start-up costs for a new hotel?

The key start-up costs and budget to consider when setting up your hotel are:

• buying or construction costs for the building
• capital for initial hotel staffing and key operations
• marketing costs

How to start a hotel business on a budget

It’s no secret that starting a hotel requires a large upfront investment, but if you’re on a budget there are a few things you can consider to get your project off the ground:

• Start small: start with a smaller property like a B&B and use the profits to invest in a bigger hotel longer-term.
• Seek funding from friends and family: they’re often happy to support with donations or loans towards the business.
• Private investors: there might be other private investors you’d like to partner with, but make sure you have a robust business plan before pitching.

Benefits of starting a hotel

The benefits of starting a hotel are varied. You get to put your hospitality business skills to great use, enjoy the flexible lifestyle that comes with running your own business, meet lots of interesting people and have the satisfaction and enjoyment of seeing your entrepreneurial vision come to life.

Is owning a hotel a good investment?

Owning a hotel can be a great investment. Hospitality is generally a very sustainable industry – people will always need overnight accommodation — so it’s good for generating regular income and building long-term wealth. If run well, a hotel can provide a great return on investment and you have the opportunity to add services and facilities to continue to add value to your business.

Create a hotel business plan

Creating a well-thought-out business plan is essential before pressing ahead. Not only will it map out key decisions and strategies, but it will also provide a great tool for potential investors. A great hotel business plan should include your vision, market research, competitor analysis, guest segmentation, an operational plan, finances and staffing needs.

What type of person should you be to thrive in the hotel business?

Hoteliers need all the practical skills associated with great hospitality or hotel management . You’ll need to be great with people, have attention to detail, excellent communication skills and be a first-rate problem solver. To run a successful hotel business you’ll also need all the theoretical business knowledge in areas like finance, consumer insights, marketing, economics and business management. With an MBA in Global Hospitality Management , you’ll learn all these transferable skills and knowledge through real-world projects and international field trips.

Explore Les Roches’ MBA in Global Hospitality management today

How big is the hotel industry?

According to a recent Statista report , the worldwide hotel industry is worth $722 billion and expected to increase to $1.2 trillion by the end of 2022. Condor Ferries estimates there are more than 700,000 hotels and hotel resorts worldwide.

What are the key segments of the hotel market?

While hotels, motels and other types of lodging all share overnight accommodation in common, there are some differences between them. Hotels often provide additional services such as catering, events or spa facilities, whereas motels tend to be on a room-only basis for passing motorists. Hotels and motels can be further segmented by location, room rate, size, and whether they form part of a chain or are an independent establishment. In terms of rating distinctions, lodgings in popular urban areas with higher prices and high quality 4 or 5-star ratings are generally considered luxury. Lodgings with cheaper accommodation and lower quality services tend to be considered mid-price, with economy or budget lodgings found towards the lower end of the scale.

How do hotels generate revenues and profits?

The most obvious way for a hotel to generate revenue and profit is by selling rooms for overnight guest stays, but it’s not the only way for a hotel to make money. Most hotels offer some form of restaurant or room service catering, making food and beverage a key revenue stream, too. Some hotels also generate revenue from hosting conferences, weddings and events, while others make money from gym and spa facilities.

What external factors affect the hotel market?

There are lots of different external factors to be aware of that can impact the hotel market. The recent global pandemic is an obvious example of how external factors such as travel bans can affect the number of guests you receive. Other factors include:

• Domestic trips : trends in business travel and staycations can affect demand.
• International tourists : trends in international travel and the length of trips can impact accommodation needs.
• Consumer spending : levels of consumer spending and how much disposable income people have can greatly affect how much guests are willing and able to spend on hotel stays.
• Consumer confidence index : as a measure of how confident consumers are in their financial situation, the consumer confidence index is a good indicator of how inclined people are to spend on travel and entertainment.

Who are the key competitors in the hotel market?

According to Statista, Wyndham Hotels & Resorts are the biggest hotel company worldwide with 8,941 properties. Marriott International are the second biggest with 7,662. Other well-known large hotel companies include Hilton (7,111 properties), Best Western (4,037 properties) and Radisson Hotel Group (1,615 properties).

Competitors and industry

The hotel industry is highly competitive and continuing to grow thanks to increasing domestic and international travel. Industry leaders constantly ebb and flow as large hotel companies tend to acquire, build and sell hotel properties frequently. There are also many small players on the market who do well and create local competition for larger hotel chains .

What are the key financial metrics and costs in the hotel market?

The key metrics and costs to be aware of as a hotelier are:

• Profits are calculated pre-interest and tax and, according to Knight Frank, average around 56%
• Rent and utilities are usually around 7% of total revenue
• Staff wages typically account for about 25% of total revenue
• Purchases such as bedding, toiletries, food and beverage usually account for 30% of total revenue

What are the keys to launching a new hotel?

There are a few key steps and factors to consider and plan for if you’re thinking about launching your new hotel business:

1. Market research

Do your market research before you invest. Are hotels growing or closing down in your desired area? Which hotels are thriving and why? What are the best customer platforms for booking? Use research to inform key business decisions about location, pricing and marketing.

2. Location, location, location!

Deciding on the best location is critical to the success of your hotel. In popular areas you’re likely to see a lot of customers but also a lot of competition. In less popular areas you’ll see less competition but fewer potential customers, too.

3. The hotel building

Make sure you plan for, and are realistic about, the costs of buying, building or renovating a hotel building. Secure the bank loans or investors needed to pay for the large upfront costs.

4. Licenses and permits

Make sure you have all the appropriate licenses and permits before you open the doors. This might include licenses for alcohol, entertainment, televisions, and permits for weddings or outdoor seating. You should make sure that you’re also complying with any food standards regulations, health and safety and employment laws and that you have all the necessary insurance in place.

Create a smart and well-researched pricing strategy, taking into account costs, likely returns and your competition.

6. Target market

Identify your target market and create a marketing strategy to reach different customer segments. Use various channels including advertising, social media, PR and marketing campaigns to build brand awareness.

7. Hire and train staff

However great your hotel management skills are, you can’t run a hotel business all on your own. Make sure you’re properly staffed to run all key operations including the front desk, housekeeping, catering, valet parking and any other services.

Remember that first impressions count, so make sure that the team you hire fits with your business culture and values and that you properly train your staff to achieve the highest quality standards possible.

8. Business plan

Have a clear, well-researched and thorough overarching business plan that sets out all the key areas above: market research, location, marketing approach, pricing etc. Use it for investors and as a good reference document to measure against when you implement your plan and make critical decisions.

9. Grand opening

Finally, you’ve put in all the hard work and you’re ready to launch, but does anybody know you exist? Hopefully your marketing strategy has created some early engagement, but one of the best ways to announce your arrival is to host a grand opening party. Invite investors, suppliers and locals to build relationships and cement your place in the local community. You can let potential guests look around your facilities, try your delicious food and also use it for some great social media content. Ready to take the first step towards your dream of running your own hotel? Take a look at our world-leading MBA in Global Hospitality Management that provides everything you need to take your hospitality skills to the next level and fulfill your potential as a world-class hotelier. As a NECHE accredited school, ranked within the world’s top three higher education intuitions for hospitality, Les Roches can help you go further in your hospitality career .

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69 Things Owners Wish They Had Known Before Starting A Hostel

How To Write A Hostel Business Plan + Free Template

If you’re currently struggling with creating your hostel business plan, you’ve just struck gold.

This guide will cover everything you need to know about how you can create your business plan and receive funding. It includes free templates for you to download and a complete example case for every step along the way.

The template itself is based on real examples of other hostel owners to ensure you’re working with proven concepts.

Alrighty! Let’s get to the meat!

Hostel Business Plan - Basics

What is a business plan.

At its heart, a business plan is a for mal written document about HOW your hostel business works and WHY it will be successful, i.e. profitable. This is achieved through an analysis of your industry, customers, and competitors as well as the creation of an elaborate marketing and operations plan.

However, the centerpiece is the financial plan that tells you and the reader how and why your business is a profitable system. After all, the purpose of every business is – and should be – to make a profit.

Now there are two different forms of business plans depending on their respective purpose:

• 1) A business plan for personal planning vs.
• 2) A business plan to obtain funding

A business plan for your own planning is typically less comprehensive, written in informal language, less formatted, and typically comes down to a collection of notes. Obviously, you don’t need a nice-looking cover page if you’re the only one who’s going to read your plan.

In this blog, we’re solely focusing on a business plan that’s written to obtain funding.

But let me be very clear. Regardless of whether you need funding or not: Building your business according to your precisely constructed business plan is an approach that is as close to assured success as can be. Hence, I highly recommend you read along and follow the outlined steps regardless of your individual funding needs.

Why Is A Business Plan Important?

Imagine a stranger rings your doorbell and asks you to invest $20.000 in his new business. Would you go ahead and get your checkwbook out just like that?

Of course not.

You probably would want to know what the business is about, what qualifies him as a person to build and run a successful business and what’s in it for you, right? Well, guess what, that’s just what your bank or sponsor is dying to know beforehand as well.

Your business plan is a tool that helps them understand the nature of your business and is the means to winning your bank or sponsor over. After all, they’ll only give you their money if they’re confident that they’ll receive something in return that they want.

Since a business plan forces you to think about your hostel intensively and requires several specific analyses, you’ll appreciate all the groundwork you did in the long run. 

That said, the financial calculations will be assumptions when you first start out. Over time, you’ll get a feeling for it and your assumptions will change into predictions .

You’ll understand why, in retrospect, many hostel owners confirm that their business plan was a bunch of nonsense juiced up on steroids , especially when they look at their initial calculations. This blog will make sure you get as close to the truth as you can get.

Let’s start with the basics.

How Long Should A Business Plan Be?

For the impatient: aim for 25 pages (+/- 5 pages excluding the appendix) and here’s why:

The length of a business plan depends on several factors:

• c) How much funding you require → the more dough you need, the longer your business plan

For the reasons above, some new tech companies have to write business plans that exceed 100 pages! The good news: you’re not the first lodging facility that applies for a loan. There were many before you and there will be many after you.

20-30 pages have been proven to be the optimum for a hostel. It’s important to note that longer might not necessarily equal better . Let me tell you what most banks won’t tell you: no one reads a business plan from A-Z .

Hence, think about your reader on the other end and boil it down to the essential elements he needs to know. You furthermore give a signal that you value the other person’s time.

Plus, make sure it’s reader-friendly:

• Use bullet points
• Highlight the most important parts
• Use white space and graphics

The more you get your potential bank clerk or investor interested and invested in your paper, the easier to convince him/her.

How To Write A Hostel Business Plan

To receive my master’s degree in business administration and engineering back in Germany, I had to write more than 10 academic papers: The shortest being 35 pages, the longest exceeding 170 pages.

Having a very low affinity towards language and writing at that time, I had to learn to write papers through the school of hard knocks: By trial and error.

Here’s my advice to you. Learn from my mistakes, apply the following basic rules and thank me later.

Following the rules will make your process a hell of a lot easier and will save you weeks if not months down the road.

• #1 Go step-by-step!

Writing your first business plan can be overwhelming. Be assured that this feeling is completely normal. I even got reminded of that when I wrote this blog article about it.

So how do you eat this elephant? – The answer is: one bite at a time.

Consider every chapter as an individual project. You might even set goals to read and implement one chapter each day. That way, you focus on one thing at a time and your workload is cut up into bite-sized pieces.

• #2 Use a template

Don’t try to reinvent the wheel and use what’s proven successful. Especially for the generic part of your hostel plan, a template will save you a lot of time. Don’t worry, you can download all the templates here .

• #3 Finish your writing before proofreading & editing

While writing you build momentum. Don’t let proofreading and editing interfere with that. Instead, do it AFTER you’ve written all the different chapters.

Also, make sure you have a second person who can proofread your business plan. You’ll be so deep in the tunnel that you won’t recognize your own typos anymore.

Any spelling mistakes will impair the professional and respectable image you’re trying to create. It’s easy to lose people who are sensitive to things like that. So, be intentional with the paper you’re creating and go the extra mile to ensure its above-standard.

• #4 Format nicely and at the very end

Gosh, I have wasted so many hours in formatting my writings and designing beautiful-looking spreadsheets only to find out later that I won’t need them.

The best format is the one that entices the readers to read as much as possible. Remember: The better they understand your business the higher the chances for approval.

• #5 Create a track record of execution

Show your readers that you’ve done your homework! Include many stats and spend some extra time on formatting to create a nice-looking document.

Your business plan, as well as your presentation, need to create the impression that you’ve covered – at least – all key aspects of running a successful hostel.

• #6 Make precise statements

Stay away from general wishy-washy statements like “we will use social media for marketing.” This immediately suggests that you haven’t actually planned how to make effective use of it.

Better: “Facebook will be our primary social media channel to build brand awareness. The implementation of a marketing calendar will ensure that we consistently update our feed with new content every second day.”

• #7 Write it for your reader

It’s nice to know that you’re passionate about hostels ever since growing up. But get real! Your investors won’t give a damn. The sole purpose of your business plan is to have them take their wallets out of their pockets. Period.

Investors only care about one thing and one thing only: Will I get my money (+ a profit) back if I invest in your hostel or not.

Hence, be assured that every critical question that comes to your mind while writing your own plan will probably be asked during your presentation.

How do I know? Well, there was a time when I had my own financial consulting business. I’ve been in contact with various investment companies and experienced first-hand what matters to them – and what doesn’t.

The best way is not to skip critical aspects. Instead, bluntly mention them in your paper, deliver an approach that takes care of the problem and demonstrate your responsible and considerate approach to business challenges.

• #8 Follow through

Lastly, as basic as these rules might sound, remind yourself on a regular basis to actually use them!

Your business plan isn’t just an attractive sales paper in order to twist your investors around your little finger. Be sure to follow through with the things you say and promise. Opt for the value-driven approach and show your character. That’s where true leadership comes into play.

Hostel Business Plan Template (+ Download)

Here’s a quick overview of how to structure your business plan. Don’t be surprised to see other business plans that use other names for their chapters. There’s no standard.

However, this approach has been tried and tested by many other hostel owners. Hence, I recommend you follow in their footsteps:

1. Cover Page

2. executive summary, 3. table of contents, 4. the business.

• 5.1 State Of The Marketplace

5.2 Trends In The Industry

6.1 target market, 6.2 competition analysis, 6.3 competitive advantage, 6.4 government regulations, 7.1 advertising & promotion, 7.2 pricing, 8.1 organizational structure.

• 8.2 Job Descriptions & Responsibilities

8.3 Action Plan & Timetable

9.1 start-up costs, 9.2 funding requirement, 9.3 profit/loss statement, 9.4 break-even point.

• 10 Appendix

Breathe. We’ll go over this one step at a time.

My goal is to make it as easy and convenient as possible for you to write your first business plan. Hence, I’m going to give you a quick explanation at the beginning of each chapter about what this part should include (called “content”). Below it, you’ll find a written example of how this could look like (called “template”).

You can download a FREE template for all your financial calculations HERE.

Before we dive right into it… may I ask you for a favor? 

I really want to help you in the best possible way. Hence, please let me know in the comment section below

• a) If any instructions are unclear
• b) If you believe an important aspect is missing
• c) What I can do to make it even more convenient for you to write your business plan

Thanks! That means the world to me.

Lastly, the example below is a fiction. I’ve chosen Cairns as the location simply because I’m currently living in Cairns. “Hostel Shark” is the name of one of my domains. This is going to be a website on which I will show you step-by-step how you can easily build your own website for less than $100.

Okay, let’s go!

People judge a book by its cove r and the same holds true for your business plan.

I highly recommend you create your cover with Canva . It’s a free and intuitive online tool that allows you to create the nicest images within seconds. Simply use a Din A4 format and search for “business plan”.

• Business name
• Creation date
• Contact details (name, address, phone, email)
• Website (if available)
• Business logo (if available)

T E M P L A T E

Note from Kevin: It took me about 10min to create this cover (incl. logo) with Canva .

An executive summary is an overview of your business plan. Its purpose is to summarize the key points for the respective readers. This is the most crucial part of your business plan and often the make-or-break component .

While few people will read your entire business plan, the executive summary is going to be read by everyone. It should be no longer than one page.

Write this part at the very end!

• The Business: Business name, legal structure, offered services, manager and his or her credentials
• Location: What makes this the “perfect” place?
• Industry Analysis: Quick info about the general market
• Target market: Who is buying your product or service?
• Your competitive advantage: Your unique selling proposition (USP)
• Financial projections: Break-even point and chart of profit/loss statement for the first 3 years.
• Funding requirement: How big is the loan you’re asking for?

Hostel Shark LLC is a hostel that provides low-budget accommodation for tourists in Cairns. It is owned and managed by Kevin who has 6 years of hands-on experience in various functions throughout the hospitality industry and holds a master’s degree in business administration and engineering. The primary service will be the accommodation of guests.

Cairns offers great potential for additional hostels. It’s mild winter temperatures and the fact that it is one of the major stops along Australia’s popular east-coast-tour makes it especially attractive for hostel travelers. Other hostels in the area achieve above-average occupancy rates compared to all hostels worldwide.

Hostels have a strong business model and can clearly differentiate themselves from other lodging establishments through their unique community and social atmosphere. They are especially sustainable in crises and cost-effective due to the fact that several guests share the facilities and rooms.

They have proven to be sustainable throughout economic recessions since they offer a cost-effective guest experience in shared facilities and rooms.

The hostel aims to attract travelers between 18-30 years of age. This target market has been statistically proven to be the most profitable and resilient compared to other tourist groups. The hostel will include 16 rooms with a total of 64 beds.

The biggest competitors of Hostel Shark are other hostels. However, there’s a market gap when it comes to serving tech-savvy guests. Hostel Shark will offer high-speed Wi-Fi in the entire building and additional sockets and USB plugins to close this gap. Moreover, we are going to concentrate on the social aspect of our hostel to further differentiate it from other lodging models.

Our marketing plan is based on successful and proven methods. Online travel agencies are the core driver for new bookings and will be complemented by our mobile responsive and SEO optimized website.

The business is projected to be profitable from year one and will increase its net profit over time. The break-even point is reached at an occupancy rate of 29% (1694 booked nights). The average occupancy rate of hostels in Cairns is 68%.

Funding requirement: The management is seeking to raise $200.000 for the development of the hostel.

My favorite part of a business plan 😅

Use a tool like Microsoft Word to create your table of contents automatically. This ensures your titles are linked to the content, i.e. clickable text, and readers are efficient going through your paper.

This section should give your reader a general impression of what you’re doing and where.

• Our Mission Statement: Company name, legal structure, goal, and how you’ll achieve it
• Location: What makes this location perfect for your hostel? Include statistics .
• Services: What additional services do you offer besides accommodating people?

Our Mission Statement

Hostel Shark LLC’s mission is to provide low-budget quality accommodation for both domestic and international tourists visiting the city of Cairns. Our company’s core focus is to accommodate travelers who are traveling alone and or are unfamiliar with the city and seek an easy way to connect with other travelers.

Having a thriving community combined with a highly personal atmosphere and plenty of common areas is the key success driver in our business. We aim for a clear differentiation by developing a culture unique to Hostel Shark. This will help us gain a strong market share at the early stage of operations, and will attract more customers over time through word-of-mouth. 

To further cultivate the community aspect of our hostel, we decided to implement a loyalty program for guests who are staying with us for more than one consecutive week. In addition, there will be weekly team building activities to strengthen and expand the community.

Tourist information for local sights, events and activities will be provided as well as various snacks through two 24/7 vending machines.

The location we chose for our hostel is the city of Cairns in Australia. Cairns is located in Tropical North Queensl and has a population of about 150.000 inhabitants. Around 2 million tourists are visiting Cairns each year. [ 1 ] The city is considered “the gateway to the Great Barrier Reef” and is popular for its beautiful rainforest areas, Aboriginal culture, its esplanade, and the free swimming lagoon.

In 2015, around 7.4 million tourists visited Australia. Despite the fact that Cairns contributes only 0.6% of Australia’s total inhabitants, approximately 27% of all tourists did stop for a visit in Cairns. [ 2 ]

With its unique climate, Cairns is the perfect location for our hostel. Since it’s located in the north of Australia, we experience mild winters with an average temperature of 20°C. Many backpackers take advantage of the Cairns climate from April up to December when it’s too cold in the big cities like Sydney, Melbourne, and Perth. That’s why lodging facilities around Cairns experience above-average occupancy rates even in the colder months.

Cairns is a safe bet and stopping point for people who’re traveling the popular east-coast-tour in Australia. The two leading hop-on / hop-off bus companies Greyhound and Premier offer several trips from Cairns to other big cities like Brisbane, Sydney, and Melbourne. In fact, Cairns is an established starting or endpoint of travelers before they leave the country. Both contribute to a steady flow of new guests and longer average stays.

The venue we are looking into buying is located in the center of the city. All famous sights can be reached by foot. The local bus station nearby provides access to all outside sights within the region. All important premises to meet the daily necessities of our guests are located within 400m. This includes several grocery stores, cafes, restaurants, bars, night clubs, and hairdressers. 

Hostel Shark LLC’s core service is to accommodate guests. It will feature private rooms as well as shared rooms. We plan to provide ten dorm rooms (6x 4 beds, 4x 8 beds), two double rooms (2x 2 beds), and four private rooms (4x 1 bed). In total, we have a capacity of 64 beds across 16 rooms.

We will charge more for private rooms than for dorms and more for smaller shared dorms compared to larger ones. The double rooms and private rooms have en-suite bathrooms, the dorms will have shared bathrooms.

Besides our core service, we offer bicycle rental, towel rental, laundry service, and snacks in our vending machines. Our free services include book exchange, access to a movie library, weekly social events, Wi-Fi, two computers as well as luggage storage.

A fully equipped kitchen will be available to our patrons and includes a variety of pots, pans, dishes, basic spices, free coffee, and free tea. Our customers can bring, prepare and store their own food in there. They will be responsible for cleaning up their own dishes. 

5. Industry Analysis

Still with me? Let’s take a look at the Industry Analysis.

BE AWARE that most bankers and other investors are unfamiliar with hostels and their industry. Hence, I recommend you don’t miss out on the chance to “sell” them how awesome this industry is because – as a matter of fact – IT IS AWESOME!

• State Of The Marketplace: How well the industry is developed, what’s the status quo and why it is a great market to be in. You can also include location-specific statistics like you’ll find in the example below.
• Industry Trends: Current trends and how they impact the industry and your hostel. Tell them how you are able to cope with the new demands and how you considered them in your operation.

5.1 State Of The Ma rketplace

The hostel industry is growing rapidly across the globe. In fact, “the hostel industry is projected to grow seven to eight percent year-over-year until 2020. [ 3 ] This is a reflection of its strong business model that is based upon two factors:

• 1) Sustainability

Hostels have proven to be less likely affected by economic crises. Here are several examples:

• “Even as the city’s hotel occupancy rate has fallen to 66 percent in February, from 81 percent in the same month last year, despite steep discounts, many youth hostels are reporting banner business.” [ 4 ]
• “Even during the 2008 economic crisis, many hostels reported increased occupancy numbers in a time when hotel bookings are down.” [ 5 ]
• “If you look at the financial crisis of 2008, 2009, the first companies which were hit hardest were the five and four-star hotels because business travel is put on hold.“ [ 6 ]
• “According to the survey, one of the main reasons for a relatively strong performance of the hostel sector is the tendency for operators to innovate and adapt their products to suit market conditions. The fact that hostel operators could generally sustain business levels through the economic downturn of 2008-2010 was one of the main reasons why overall average bed rates for 2009 rose by more than 3% compared with 2008.“ [ 7 ]
• 2) Profitability

The management believes there’s a reason why the second paragraph on Wikipedia about hostels begins with the following sentence: “Many hostels are family-owned or run, and are often cheaper for both the operator and occupants than hotels”. [ 8 ] In fact, “some cities report a higher average income per room for hostels than hotels […] due to several paying guests residing in a room.” [ 9 ]

Industry experts believe this is the case due to lower expectations and the efficiency of shared facilities: “The other interesting thing about hostels is that they’re a lot more financially viable […]. That’s because hotel rooms need to have a certain square footage and that has to include a bathroom, there are certain expectations.” [ 10 ] 

Furthermore, Australia shows great potential for hostels compared to other continents. Worldwide the average occupancy rate among hostels is 56%. Oceania and Asia are the leading continents which further strengthens our choice for the location. [ 11 ] From 2001 till 2009 total international visitors have grown by 3% per year in Australia. Over the same period, total international visitors grew by an average annual rate of 1%. [ 12 ] 

The hostel industry has seen several changes over the last couple of years. Originally, hostels only offered dorms and no private rooms. Today, 9 out of 10 hostels provide private rooms. [ 13 ] That’s why Hostel Shark will dedicate 25% of its rooms (4/16) to private rooms.

Remote working, freelancers and digital nomads grew by 140% between 2005-2018. [ 14 ] To be able to meet their needs, we’ll offer multiple desks in the common areas with sockets for several devices. Multiple routers will be installed across the establishment to ensure high-speed Wi-Fi.

Female travelers are a rapidly growing target group. Security, cleanliness, and atmosphere are set to be the biggest booking influencing factors for women. [ 15 ] To meet their needs, all common facilities are going to be cleaned twice daily and there will be several security cameras as an additional safety feature across the hostel.

The latest industry report from Hostelworld shows that tomorrow’s travelers are much more drawn towards hip and trendy hostels. In fact, there’s a 44% increase in the importance of decor when making a choice on booking compared to a few years ago. [ 16 ] This is why we chose to work with an experienced interior designer who’s responsible to make our hostel appealing in every conceivable way.

Hostels have a reputation for being just a cheap form of accommodation. In the meantime, competition has increased and other establishments can partly compete with their prices. For future hostels, it is going to be crucially important to focus on the social aspect and to deliver a unique experience rather than just a cheap bed. [ 17 ] We will further discuss this challenge in the competition analysis chapter.

6. Market Analysis

• Target Market: Major demographic, economic, social and cultural factors. What’s unique about your target market?
• Competition Analysis: Competitors, their strengths & weaknesses. If there are too many competitors in your area, describe them as a whole and limit your analysis to a few exemplary cases.
• Competitive Advantage: What’s your unique selling proposition (USP)? Why should travelers book your hostel? Your competitive advantage is one of the most crucial aspects of your business plan. It basically covers the questions of why guests should stay at YOUR hostel and not at your nearest competitors. Think of it as your “reason to exist”.
• Government Regulations: Legal and zoning requirements and how you’ve taken them into consideration throughout your plan

Hostel Shark LLC aims to attract domestic and international travelers between 18-30 years of age. Hence, we’ll serve mainly two generations: Millennials and Generation Z.

Millennials are people who were born between 1981 and 1996 (23-38 years old). They are tech-savvy, family-centric, and tend to have a strong craving for attention. Generation Z describes people who were born after 1996. The major difference is that they grew up in a globalized and interconnected world. Hence, they tend to be even more tech-savvy and technology is a major part of their lifestyle.[ 18 ]

The management of Hostel Shark is confident in their target market selection and based their decision on statistics: 

• The youth market is of high value

Although millennial travelers have a lower than average income, they spend more money on longer trips. Many tend to be time-rich which allows them to spend more time at a destination compared to any other tourist. [ 19 ] Compared to other tourists, Australian hostel travelers spend around double the amount of money during their trip in Australia. [ 20 ] 

• The youth market is resilient

When the going gets tough, young travelers keep traveling. They are relatively intrepid when it comes to economic problems, political unrest or epidemics.

• 2009-2010: Although the youth market was affected by the global fiscal crisis, it declined less and recovered faster than mainstream tourism.
• 2011: 2/3 of Australian travelers were affected by the strong Australian dollar. Despite that, the trip length did not appear to have altered significantly.
• 2014: The Ebola epidemic had little impact on their travel plans. [ 21 ]

Some evidence even suggests that a poor economy stimulates young travelers to do longer trips until more job opportunities become available. [ 22 ]

Bottom line: The youth market is more profitable and less volatile than the tourism market as a whole. Since this is rather counterintuitive, the management sees great potential in the hostel sector.

In total, there are 28 hostels, 30 hotels, 306 Airbnb rooms, and several hundred apartments listed in Cairns (Sept. 2019). In this analysis, we will cover all the accommodation types that we consider direct competition of our future hostel.

The management is firmly convinced that apartments will affect our business to only a very small percentage. Most apartments in the location we’ve chosen cost 3-4x times the amount compared to our cheapest available room and have minimum stay requirements beginning from 2 months up to 6 months. Other hostel owners in the area confirm that only a very small percentage of “slow travelers” move into a private apartment.

Most hotels in Cairns are located at the esplanade and accommodate predominantly families, business travelers, and elderly visitors. A study about millennial travelers revealed that the price for value (#1) as well as the location (#2) and the social atmosphere (#3) are the three major reasons for young travelers to opt for hostels. [ 23 ]

6 hotels can compete with the pre-planned prices for our private room. That said, they are not nearly as centrally located as our hostel and can’t keep up with the social aspect. This makes us very confident in our belief that hotels are a small peril for our hostel.

Several Airbnbs are located within 500m of our hostel. They tend to be more pricey than our cheapest available room and do not provide the desired community. Hence, our main competitors are other hostels.

The following analysis includes all well-established hostels that are situated within 500m of our hostel.

• 1) Palm Hostel Cairns

This hostel opened its doors in 2009 and is located 500m away from the city center. Palm Hostel Cairns offers a wide variety of facilities (incl. pool) and has a capacity of 35 beds. With $32 per night as their cheapest option, they belong to the most expensive hostels in Cairns. What’s special about this hostel is that they don’t provide bunk beds (only twin beds), offer a weekly barbeque night and have built a reputation for their tour desk. Their main target market are 25-40 years old travelers. Their overall rating on Hostelworld is 9.2 stars.

• 2) Travelers Paradise

Travelers Paradise was built in 2003 and is located in the city center. It provides only basic facilities (no pool, few common areas) and can accommodate up to 102 guests. Their cheapest dorm costs $17 per night and makes them one of the cheapest available accommodations in Cairns. Furthermore, they offer free pancakes for breakfast and have a built-in pizza restaurant. Guests who’ve booked through Hostelworld rate this hostel with 8.2 stars. According to TripAdvisor, most guests tend to be between 18-24 years old.

• 3) Crazy Chick Hostel

This hostel is one of two existing party hostels in Cairns. Their main focus is travelers who come to Cairns to party. They are well known among young partiers for their daily ping pong championship. The location is 300m away from the city center. The Crazy Chick Hostel has an overall capacity of 56 beds and doesn’t offer any private rooms. Their smallest dorm is for 4 people. The hostel is rated with 8.0 stars on Hostelworld. The facilities provided are rather basic and designed for the nightly parties. Dorm prices range from $22 to $25 per night.

The main advantage of other hostels in the area is that they are already established and have many reviews across several online travel agencies. To overcome this hurdle we’re going to offer the cheapest available price for our dorms in the first month and reward every guest with a free breakfast for every online review.

When setting up our marketing plan for our hostel, we have taken special considerations to market gaps in our area: None of the hostels offers special facilities for young tech-savvy guests. We plan to provide several sockets at each wall, inside as well as outside of the establishment. To provide optimal high-speed Wi-Fi, we’ll install 5 routers across our hostel to ensure the signal is strong enough in every room to stream videos without buffering. Moreover, every bed will have its own private USB plugins.

Most hostel travelers choose hostels for their community and the opportunity to meet new friends. Our hostel will focus on a family-like vibe by offering free social activities every second day as well as common areas that are designed to facilitate interactions. We believe the social aspect is the main reason why hostels will always prosper no matter how many other accommodation forms actually do compete with our prices. Hence, this is our approach to guarantee long-term success.

Other unique advantages for staying at our hostel is that we offer free jello in the morning and free coffee + tea during the day. We also have a collaboration with a local fitness studio that allows our guests to work out for free. Since we know many business owners in the area, we will also be able to offer jobs on a regular basis. We are sure this will help us to get more long-term guests as well as a stable occupancy rate in the off-season.

The management understands the importance of zoning and other legal regulations. To prevent any issues, we’ve already been in contact with the local zoning commission, building department, fire department, health department, and the Disability Support Queensland.

The property we intend to buy is zoned for max. 22 rooms. This allows for six additional rooms to what we’ve planned. Furthermore, our hostel requires a fire sprinkler system that is already installed as well as a commercial kitchen with a separate hand-washing sink.

The only major change we have to make is to add a ramp to the pre-existing steps. All renovations will be supervised by an architect and contractor who are both experienced in lodging facilities to make sure we meet all necessary requirements.

7. Sales & Marketing Plan

• Advertising & Promotion: How will you attract guests and make sure you achieve your projected occupancy rate? How will you manage your availability? Which distribution channels will you use and how?
• Pricing: How do you price your services & rooms?

Pro-Tip: It creates an awesome impression, if you can show them that you already have a website. It immediately signals: “Hey, I’m serious about it.” 

And the best part: This is WAY easier than most people think. In this step-by-step guide , I show you how you can create your own professional website within 15 minutes and for less than $100.

The management at Hostel Shark LLC believes in copying successful and proven methods rather than reinventing the wheel. Hence, our marketing plan is based on statistics, trends and our own extensive experience within the hostel industry.

Our primary source for bookings will be several online travel agencies (OTAs). OTAs allow our young hostel to get instant access to millions of travelers worldwide. In 2019, 70% of hostel travelers use OTAs to reserve their beds and this trend greatly increased over the last few years. [ 24 ]

For maximum efficiency, we will sign up for Hostelworld.com, Booking.com, Hostelculture.com, and Hostelclub.com. The first two OTAs account for approx. 91% of all hostel reservations. [ 25 ] Furthermore, they are the only two OTAs that are used by all of the top 41 hostels worldwide. [ 26 ] To reduce the overall commissions and attract more people who are specifically looking for hostels, we further diversify with Hostelculture.com, and Hostelsclub.com.

Over and over again, studies have proven that the presence on various OTAs increases direct bookings by 9-26%. [ 27 ] Hence, we’ll provide our own hostel website which has already been created: www.hostelshark.com

We are aware of the fact that direct bookings are a declining trend in the hostel industry. To increase the effectiveness thereof, we’ll set up a blog that covers several guides about the sights, attractions and general information about Cairns. To increase our monthly traffic, we will also consider free accommodations in return for blog articles on our website in the off-season.

The availability of rooms across several websites as well as all the other aspects of a reservation (e.g. collecting all necessary data, sending an automated confirmation email, etc.) will be managed through a channel manager and property management system from Cloudbeds. This will help us prevent overbookings and saves us many additional staff hours per month. Cloudbeds software is the most commonly used software among the leading hostels. [ 28 ]

Our website is optimized for SEO and offers various additional bonuses for people who’re booking directly. The number of hostel travelers that book via mobile has greatly increased over the last few years. Hence, we have designed our website for best mobile responsiveness. [ 29 ] The booking engine is provided by Cloudbeds.

We will use social media as a way to build our brand and have social proof through followers, likes, and reviews. To achieve this, we focus solely on Facebook which is used by 70% of the top 41 hostels [ 30 ]. Since we know about the inefficiency of social media for new bookings in 2019, we will keep promotions for our hostel at a maximum of 10%.

Offline promotion will also play a role in our overall marketing plan, but it is not our primary focus since it’s a declining trend. Among several smaller offline marketing tactics, our intention is to attract most customers by giving away rack cards to local premises as well as other hostels in nearby cities. Cairns is part of Australia’s popular east-coast-tour. Hence, we’ll contact hostels in neighboring cities about a joint-venture for mutual lead-generation. 

All marketing activities will be managed with a custom-designed marketing calendar to ensure consistency. That way we have a standard to measure results and improve it accordingly to the feedback we receive.

The management is aware of the fact that prices are a critical positioning indicator and greatly affect the clientele a hostel attracts. For this reason, we do not intend to be the price leader in our area and instead aim to be within the upper range of prices.

We will also include flexible pricing since guests expect lower prices in the off-season and higher prices in the high season.

Additional services are priced as follows:

• Bike rental: $15 per day
• Laundry service: $4 for washing, $3 for drying
• Vending machine: prices for items range from $2-$5

Note from Kevin: What feeling do you get from reading through this? Would you invest in Hostel Shark? – If it’s a “goddamn, this dude knows what he’s talking about”, then your investors will probably think the same. If not, focus more on “selling” and yourself and your hostel!

8. Operations Plan & Human Resources

• Organizational Structure: Organizational chart of your hostel
• Job Description & Responsibilities: Information about your relevant experiences. It’s also highly recommended to add a full CV in the appendix. Include a list of all key employees, their tasks, and responsibilities. What background and experience should they have? 
• Action Plan & Timetable: What are the milestones until you’re welcoming your first guest? Always include a security buffer for unforeseen occurrences.

Hostel Shark LLC will have a flat organizational structure. The short communication ways allow us to be flexible and act quickly in case of emergencies.

8.2 Job Description & Responsibilities

General Manager

Our General Manager will be the owner himself. He holds a master’s degree in business administration and engineering and has been working within the hospitality industry for more than 6 years.

While operating a successful consulting business, he developed excellent verbal and written communication skills. In combination with his analytical background as a former engineer, he’s confident in his skills in operating the new hostel.

Further information including a CV of the manager can be found in the appendix section A3.

Responsibilities:

• Hiring and managing staff including external service provider
• Organizing and coordinating current operations
• Executing the marketing plan
• Measuring and analyzing key metrics on a weekly and monthly basis
• Creating systems through checklists and manuals
• Bookkeeping in cooperation with an accountant and the use of an accounting software called “Quickbooks” 
• Maintaining an excellent standard of customer service
• Identifying customer needs and responding proactively to meet them

To ensure that all operations run smoothly, the manager will be actively involved in all aspects of running the hostel for the first few weeks. Moreover, weekly meetings with all staff members will take place to speed up the feedback cycle.

To ensure regular bookkeeping as well as the consideration of all other legal requirements, the management is going to hire an accountant. The accountant has to be familiar with the requirements of the lodging industry and has to have an appropriate track record. He also has to be familiar with our software “Quickbooks”.

Quarterly meetings will ensure that we take advantage of all the financial opportunities available. All in all, the management believes that this expense will increase the overall profit and considers it to be an investment.

The management knows about the importance of the first impression as well as the impact of staff on overall customer satisfaction. Hence, all applicants have to go through a 3-step procedure before we hire any staff. The front desk has to be very familiar and knowledgeable about the city and its sights to be able to serve our customers better. They also need to be above-average friendly, patient and be able to create a warm and welcoming atmosphere. 

• Welcoming guests
• Checking in guests
• Managing and receiving bookings via phone, email and in-person
• Providing guests with directions and information about all important premises
• Balancing cash at the end of the shift
• Contacting the manager when a problem is reported
• Doing the laundry 

Front desk staff is not allowed to live in the hostel but have to live close-by. The management believes that maximum focus and commitment can only be achieved when there’s a change in the work environment. Two people will be employed full-time and one person part-time. Their payment will be the statutory minimum wage plus 10%. Wage raises are optional depending on their measured performance over time.

Housekeeper

At Hostel Shark, we separate customer service from cleaning the facilities. We want our front desk staff to be 100% focused on our guests’ satisfaction. Hence, we will make use of an external cleaning company to keep our facilities in great condition. The hostel will be deep-cleaned 3x per week in high season and 2x per week in the off-season. Bathrooms and the kitchen will be cleaned twice a day; all other facilities will be cleaned on a daily basis.

• Sweeping, scrubbing, mopping and polishing floors
• Cleaning metal fixtures and fittings
• Tidying up rooms
• Cleaning wash basins, mirrors, and showers
• Cleaning the kitchen and washing the dishes
• Changing bed sheets
• Monitoring and reporting necessary repairs and replacements

Occasionally, the hostel will make use of work/trade employees for specific work and never longer than one week. The management has experienced first-hand how hard it is to motivate people in the long run without a monetary payment. Hence, all work/trade agreements will be made on a daily basis and exclusively in the off-season. 

Tasks may include cutting the lawn, easy paint works, and blogging for our website.

We plan to welcome our first guests on April 30th, 2020. All necessary renovations have been discussed with our architect and contractor and will probably take 55 working days. Since we have experience with similar projects in the past, we added one additional month to guarantee the completion of our hostel.

More information about the necessary renovations and the floor plan can be found in the appendix A4.

9. Financial Plan

The financial plan is the centerpiece of your business plan. No matter how nice your business plan is looking, if your hostel isn’t profitable, you won’t get funding. Period.

• Start-Up Costs: The more detailed you can calculate your start-up costs the better! Also, include 6-12 months to cover operating costs (called “working capital”). The bank will want to see that you’ve accounted for that!
• Funding Requirement: How much money are you asking for? How fast are you going to pay it back?
• Profit/Loss Statement: A detailed breakdown of all revenue, expenses and net profit. Typically, your bank will want to have a monthly calculation for the first year and a 3-year statement. However, every bank has different requirements. Some might even want a 10-year breakdown. Ask them in advance.
• Break-Even Point: At what occupancy rate is your hostel profitable? There are different ways to calculate that. The easiest and fastest is to use your spreadsheet and play with your numbers. However, be sure to have proper reasoning prepared in your presentation!

It takes time to establish your hostel. Between 50-66% of the average occupancy rate is a standard recommendation for your first year. On average, it takes around 3 years to match the average occupancy rate of your competition.

If you exceed this mark in your second year, you’re doing really well! Thanks to OTAs, this process can be massively accelerated!

The profit or loss can be calculated as follows:

• Profit or Loss = Revenue – Expenses – Taxes
• Revenue = Average Room Rate x Number Of Rooms x Number Of Operating Days x Occupancy Rate
• Expenses = Total Operational Costs + Loan Payment

Ideally, your hostel should generate a profit of about 120% of the debt service after all expenses.

Click here to download all the following templates for free.

Don’t worry. All tables including easy explanations on how to do the calculation can be found in the spreadsheets. You don’t have to be a math whiz. I made it super easy for you. 

The total start-up costs for Hostel Shark LLC are $240.000.

Here’s a break-down of all the costs:

Kevin is seeking to raise $200.000 from Westpac Bank Cairns Central in order to launch the operation of Hostel Shark LCC. $40.000 are covered by equity capital. The exact terms, interest rates, and conditions are to be determined during negotiation. This business plan assumes a 10-year loan with a 9.5% interest rate on the outstanding balance.

The financing will be used to buy the planned property, renovation works and financing the first six months of operations.

The expected payment plan is:

Note from Kevin: There’s a calculator in the spreadsheets you can download for free here .

In order to calculate the net profit of our hostel, we had to make several assumptions. The average occupancy rate in Cairns for hostels is 68%. For the first year, we assumed an occupancy rate of 50% of the average occupancy rate (34%). Since we do have several years of experience in marketing, we are confident that we will achieve the average occupancy rate in the second year (68%) and exceed it by 5% in the third year (73%).

We wouldn’t start a new hostel if we weren’t absolutely sure to be better than the average hostel.

Utility costs are based on data from other lodging facilities in the area. We did not consider additional income streams from our bike rental and vending machines in our calculations. Furthermore, we took the prices for the shoulder season as an average price for our beds.

Profit / Loss Statement (First Year)

Profit / Loss Statement (3 Years)

Our hostel has to exceed an occupancy rate of 29% to be profitable. In absolute numbers that’s 1694 booked nights per year.

10. Appendix

There’s no standard rule on what documents you can add in your appendix. Only provide relevant information here. Don’t clutter your business plan with too many or unnecessary details. That said, the following documents have been useful for other hostel owners:

• Floor plan of your hostel: how do you intend to structure your hostel?
• CV of you and all other principals
• Copy of the purchase agreement for the building
• Copy of the architect’s or contractor’s plan

Et voilà, you’re ready to go! 🙂

STOP! 🤚 I need your help.

Before you leave: Answer this quick question and help our community.

How can I make this template better for you? What would you change/add? 

I want to continually update and improve this template to ensure starting out as a new hostel owner becomes as easy as possible. Hence, if you’re willing to share your business plan with me after you’ve finished yours – that’d be greatly appreciated!

P.S. People who read this article were also interested in:

• Buy or lease a hostel property?
• 8 keys for choosing the best hostel location

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24 thoughts on “ How To Write A Hostel Business Plan + Free Template ”

Regarding your marketing plan:

JESUS. Now imagine all hostels would only do that… only that… they would be SO INCREDIBLY successful.

That’s the goal! 🙂

You’re my lifesaver. I’d have paid for these templates. No joke. Cheers, Joseph

Hi Joseph, wow, thanks for the compliment! I really appreciate it.

Awwwwwwwwww!!! You’re a legend! Thanks a lot!!!

My pleasure, Todd 🙂

haven’t finished reading yet, but there are plenty of great ideas in it! thanks for all the information!

Anytime, Penny 🙂

Thanks so much for this ! It’s really simple and easy to understand and covers everything , love you!

Your welcome, Rola 🙂 Glad you like it!

Finally a business plan that I understood! Gosh, thanks so much !

My pleasure, Leslie 🙂

Just tested Canva for the cover page … Gosh, this is AMAZING!! I’m really not the creative kind of dude, but damn, my cover looks like a professional designer spent years on it hahaaha 😝 Thanks for the tip!

Awesome! That sounds great, Edwin 🙂 Glad you like it.

….did I already tell you how much easier you’re making my life with this article??? This is genius, man. Seriously. Thank you so much!

My pleasure, Carolyn 🙂

Wow, there are some pretty awesome tips included in the template! Thanks for your effort!

I’m glad you like it 🙂

Wowowowowow! I like my coffee like I like this post…clean, elegant, and 6-12 months of operating costs.

Great to heart that 🙂

Wow. I am motivated!!

Awesome! Go for it 🙂

Thank you so much ! It’s very interested

My pleasure 🙂

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The Ritz-Carlton Moscow Hotel's large MICE venues are as sumptuously fitted as the hotel's other public spaces, combining classical opulence with state-of-the-art technical capabilities to provide unique and prestigious venues for major business meetings or banquets and celebrations.