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Our legal advisor will contact you shortly.., how to start a hotel business in india - business guide.

• Introduction: Hotel Business in India

Travelling and Tourism industry is expanding over the last decade. Living in hotels can make you feel content with yourselves and give an amazing experience leaving behind all the stress of professional and personal lives. In fact, because of globalization and tourism, people are becoming more and more aware of what they deserve. Did you know the Indian hotel industry is predicted to hit a value of Rs. 1,210.87 billion by the end of 2023? India is one of the leading countries when it comes to travel and tourism contributing to the nation’s GDP. At present, demand for hotel accommodation is growing at 6% per annum. Now, imagine, what if you could have your own hotel, fascinating right? The domestic market in India is much larger than the international market. It is very important to make them feel comfortable and relaxed.

Table of Contents

Investments Are One Of The Biggest And First Steps To Consider While Planning To Start A Hotel. 

Strengths of starting a hotel business, weakness of starting a hotel business, location and other things, hotel area plan, need research in the market, building permit, fire safety permit , police verification license for hotel , health trade license , food safety license , business registration, bar license, pf registration, fssai food business license, eating house license, steps to start a hotel business , there are licenses required especially if you wish to host events., strategies to run a hotel, factors to consider while planning the establishment of a hotel business, types of business plans .

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The more good feedback is, the better will be for tourism and your business shall flourish. Hotel Businesses are one of the best businesses to start in India. Travelling is increasing and more and more people are traveling than before. This gives hotels a great opportunity to grow and increase their finances. In this article, we shall talk about starting our own hotel business in our very own country filled with diversity, India. 

If you want to open a hotel:-

• Research well related to the Indian hotel industry. 
• Decide the location and type of business 
• Get required funding 
• Complete the important documentation 
• Arrange logistics services and are required 
• Plan your hotel’s layout 
• Hire qualified staff 
• Get promotion for services
• It is very essential to understand what sort of investment would be required for your business. 
• There are certain factors to be kept in mind while thinking of investments i.e. location, size, nature of business, government regulations, licenses, permits, etc. 
• For financial assistance, a loan is one option.

You can consult with a financial agent. He shall require a specific commission for the services.

Finances can be arranged by existing savings, selling of a property, financial institutes, banks, or other sources. 

• High-profit market 

Though investments are huge, profit margins are also higher.

• Helps you travel

If you are a manager for a long-chain hotel, you’ll have a chance to travel locally, nationally, and internationally.

• Creative Input

You'll have to implement new ideas and keep trying to improve the services you offer.

You’ll have to be flexible when it comes to some necessary changes to be done.

• Lack of Control

It is not easy to trust an outsider but for operations, the hotels are dependent on insiders. 

• Competitions

Hotels tend to lose customers because of inside and outside competition.

The affordable ones lower their standards of services and maintenance 

• Setup Expenses

Setup Expenses are huge. Money and efforts, both tend to be huge. 

It takes a lot of effort to manage and the cost of infrastructure is also high.              

When it comes to establishing a business, location plays a very important role.  The first thing is to find a location and look for its present or future demand.

• It will help to widen your scope in terms of visitors as well as revenue. 
• After you have decided upon the location, it is time to look for what kind of hotel and amenities you are willing to go for.

The size of your hotel depends on your planning. If you wish to construct a moderate-sized hotel with around 80 to 100 rooms, then the estimated space required is 10000 to 50000 square feet. For a five-star hotel consisting of more than 100 rooms, you can go for 100,000 sq ft. 

• The first step is to familiarize yourself with the global and local hospitality industries.
• Research and remain up to date with the latest hotel news.
• Gain some experience in the market. 

To Start A Business, Various Licenses Are Required. The Multiple Licenses Are- 

The National Building Code of India was prepared by the Bureau of Indian Standards to unify building regulations throughout the county. 

According to National Building Code, no person shall carry out development, make alterations or demolish any building.

All hotels shall have a proper building permit as per the relevant town planning Act or Municipal Act.

Fire Safety Permit is essential for Fire Department and is necessary for operating a hotel business. Fire Safety Certificate is provided if the building has facilities for proper fire prevention as mentioned under the relevant fire safety rules and regulations. 

Hotels are closely monitored by the police department. Therefore it gets more necessary for hotels to follow regulations and maintain a valid permit from the Police Department. 

Health Trade License is obtained from the local health department or Municipal Corporation. 

It gives permission to for performing trade and business specifically for those items having a direct impact on public health. 

If you issue this license, the Municipal Corporation certifies your establishment compiling with hygiene and security standards essential for public health. 

This license is administered by the Ministry of Health and Family Welfare, Government of India.

It lays down the standards for articles of food and regulates the manufacturing, storage, distribution, sale, and import to ensure the availability of sale and wholesome food for human consumption. 

Under an artificial legal entity, a hotel is set up. 

By operating under an artificial legal entity, the liability of the promoters with respect to the business can be limited.

• If your hotel serves alcohol or operates a bar, a bar license will be required from the relevant authorities. 
• Bar license is provided by departments operating under the State government. 
• Required for any establishment that employs more than 20 people in India.
• PF Board administers a contributory provident fund , pension scheme, and insurance scheme.
• FSSAI is required for operating a restaurant in Inda.
• It is provided for a year and is renewed at the end of the year.
• FSSAI is managed by the local FSSAI office.
• This does not fall under the purview of the Central Government. 
• Eating House is any place where people can consume food.
• This is provided by Licensing Police Commissioner of the city.
• Prepare a Strategy

This should include your goals, obstacles, and plans to achieve the desired goals. 

When your business plan is to be presented for getting a loan, the investors and lenders usually go through the first page and it’s upon them to read further. 

They could even wish to read more so it is important to lay out the critical information. 

• Industry analysis

You need to figure out the niche you are willing to target, is it going to be a small motel with basic amenities; an upscale boutique hotel, or a luxury resort with modern amenities?

First of all, you’ll need to decide what niche you are willing to target and then analyze the trends likely to affect the market niche.

• Planning the marketing

There are four p’s to be considered 

• Product 
• Price 
• Place 
• Promotion 

Operations include daily tasks of-

• Booking reservations
• Housekeeping,
• Check-ins and check-outs. 

Management is the backbone of your hotel venture, it can only convince financiers to invest money in your venture and also ensure smooth functioning of operations. 

Get a loan for your hotel venture. There will be various lenders like banks NBFC’s, willing to invest in your market. 

These are the licenses required:-

• Eating House License:- This can be obtained through the Licensing Police Commissioners of your city.
• Food Safety License:- This can be obtained from the food safety and security authority of India 
• Fire Department License:- This can be obtained from any fire department in your region
• Health / Trade License:- This is obtained from the local civil authority in India 
• Liquor License:- This can be obtained from the local excise department 
• Hotels require human resources, especially the management team.

The prerequisites of having a management team are they should be qualified and experienced.

• Meet various hotel owners and gain the required experience from them.

It can be a lot profitable and helpful in the long term.

• Connect with financial institutions because many financial institutions such as banks provide financial assistance and flexible repayment options to create business establishments.
• Research and calculate minute details and other aspects such as feasibility, viability, and future sustainable growth. 
• Take the help of a financial expert who is well-qualified and capable enough to calculate all working capital expenditures and expenses.
• Location and amount of staff required 
• Plan should include the type of business with details such as rooms, amenities, capacity, and infrastructure requirements.
• Externally Focused Business Plan:

Plans target goals essential to external stakeholders. It contains detailed information about the organization reaching its goals. For a hotel business plan, external stakeholders include customers and investors. 

• Internally Focused Business Plan 

It is when a company’s growth is funded by the revenue of the business itself.  This includes estimated expenses and projected sales but does not need to go into details relating to the company or product. 

• Growth plan business

They are in-depth descriptions of proposed - growth and are written for external and internal purposes.  If company growth requires investment, the growth plan will include complete descriptions of the company, its managers, and officers. 

• Operations Business Plans

They are internal plans consisting of elements related to company operations. 

The operations plan outlines the responsibilities of employees.      

• Feasibility Business Plans

There are two things you need to ask yourselves:

• Who will purchase the service or a product a company wants to sell
• If a venture can turn into a profit     

They also include target demographics, capital required, and recommendations to go forward.

• Strategic Business Plans

It is all about setting high plans and how to fulfill them. And also It helps in knowing the bigger picture motivating employees to work together and complete the big goals altogether.

In this article, we talked about how one can start a hotel business and what are the requirements. There are both pros and cons when it comes to the hotel business so one should calculate and bring a balance for the same. There are some licenses that are quite essential for opening a hotel. One must obtain all the licenses and for that services shall be facilitated by Corpseed

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.

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• Revenue Management
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• Operations Management
• Asset Management
• Pre-Opening
• Owner Representation
• Turnaround Management
• About Xotels

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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Home » Business » New Business Ideas » How To Make a Successful Hotel Business Plan?

How To Make a Successful Hotel Business Plan?

It is a known fact that the hospitality industry was one of the fastest-growing and profitable industries before the pandemic. With the pandemic, the hospitality industry across the globe had its own set of repercussions, and India was no escape to it! However, with ease in restrictions and people adapting to the new normal, the hospitality industry is picking its pace and has started to garner its revenue. If you are wondering about starting your hotel business in 2022, now is the right time! 

With lockdown restrictions easing, several individuals have started to take up quick weekend breaks. There has begun an increase in the demand for affordable hotels and lodging, but also luxury accommodations have started to be in demand. Even though one cannot forget how the pandemic hampered the growth of the hotel industry, the hospitality industry always offers a rewarding experience to all hotel owners or those who want to start a hotel business. With the hotel industry all set to seek its boom, it’s safe to say that it is the right time to start your own hotel business! In this article, we shall talk about how you can get started with your own hotel business, the costs that can likely arise, and everything you need to know about starting your own hotel business in 2022. 

In today’s world, starting a hotel business can seem to be an effortless task due to the instant access to resources and given technological advancement. However, the pandemic has taught all the hoteliers to rethink their hotel business strategy and ensure that they plan diligently. They must ensure that their establishment (hotel) is well prepared in infrastructure, services and lodging and is well-equipped to face all the challenges. One must remember that it takes a lot of time to start a hotel business, and you must take the enormous step to take a risk and earn a higher amount of profits. 

Table of Contents

How to Start Hotel Business in India ?

As we understand how to get started with our hotel business, we have brought you some expert tips and advice from the experts! Let’s read on to find out! 

Discovering the market need 

The first and foremost step you need to take while starting any business is to identify the market gap. Similarly, for anyone who wants to start a hotel business, it is essential for you to look into multiple aspects such as industry trends, location, type of hotel. It would be best if you kept yourself informed on a recurrent basis. Once you understand the basic information about the industry, it is time for you to start market research for your hotel. Start by identifying the need in the market by looking into areas such as your audience, goals, competitors and other such related characteristics. To intensify your search, you can look into the following features such as; 

• Type of Property – It is well-known that all hotels are not the same. The first step you must take is to determine the property type. You must start by thinking about what you will offer to your customers in your restaurant. Make sure that you have ample options for your services and ensure that they are unique compared to other hotels around your location. 
• Size of the Hotel – The next important factor you must look into is the size of your hotel. You must figure out the number of rooms you will offer and how different your establishment (hotel) will pan out compared to your competitors serving in that particular location. 
• Location – As for location, you should now look into factors such as area of operation, demand in the area, amenities in the site and if your hotel is close to airports, beaches or other essential venues. 
• Audience Demographics – You should now look into your target audience or guest demographics, such as frequency of visits, travel purpose, and other travelled-oriented characteristics. You must determine whether your target audience will be travellers, tourists, businessmen, families, couples, solo travellers or other related demographic groups. Understanding your audience demographics will help you create a marketing plan for your hotel business and give you a competitive edge. 

Crafting Your Strategy 

Upon understanding the needs of the market, you must create a solution so that your hotel business will address the market demand. You must ensure that your hotel plan has a unique solution with respect to the concept, location, ambience, amenities, marketing, promotion, and services. When you figure out these concepts at an early stage, it will help your business stand against the competition and capture the market strategically. You must look into other important elements such as pricing and revenue, customer satisfaction, sustainability and hotel management and maintenance. 

Determine Your Numbers 

Once you have completed chalking down your strategy, it’s essential to plan all your numbers and ensure that your hotel business turns out to be profitable. You must determine all the room revenue, hiring cost, license and permit, and other operating expenses. Once you have determined all the costs involved, we should look at the sources of finances available for your hotel business. You should also project all your potential cash flows and then opt for credit, either long-term loans or short-term loans. 

Doing Your Paperwork 

We all know that starting a hotel business involves quite a lot of regulations with respect to license, finance, insurance and other related regulatory measures. You must approach the proper authorities and get all your business requirements according to your hotel business. You must also get permissions related to your location, building, renovation permits and licensing and serving food and alcoholic beverages. Given the pandemic, you must also ensure that your hotel business adheres to all the health and safety protocols laid down by the respective government and regulatory authorities. Once you complete your paperwork, you must check with the requirements at the local and state level and ensure that there are no mistakes on your part. 

Launch Your Idea!

Once you have completed all the above steps, it’s time to take action! You are now ready to launch your hotel business in the market. With your plan, the right team, and a well-defined strategy, it’s time for you to bring your hotel business to live! You can launch grandly and introduce your hotel business and yourself to all your partners, influencers, and other potential stakeholders. 

We are sure that starting your own hotel business is no longer a strenuous task! It has many risks, but it’s just part and parcel of every business. It’s time to get your planning on track and launch your hotel business today! Start your hotel business and get cooking!

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How To Start A Hotel Business In India | A Step-by-Step Guide.

Hotel business makes a lucrative business option in India due to the increased tourists’ inflows. Every year there are millions of tourists coming to the country from the different parts of the world to explore the diversities of our nation and visit various historical monuments, tourist attractions, etc. 

Therefore starting your own hotel business in India is one of the most trending and profitable businesses in India. It requires investing a lot in the beginning but once you get your business running, it could reach great financial heights. 

There are a number of things that need to be considered and followed before starting your own hotel business. As easy as it sounds, it includes dealing with a wide array of things that could contribute to making your business successful . 

A well-informed business planning is an important step for any business plan. Having a basic understanding of the business that you are planning on getting into always gives you a head start. Here is some guidance that you could use while planning your hotel business.

Deciding the type of your Hotel

There are various types of hotels from which you will have to choose before the establishment of your hotel. Hotels come in various categories, big and small, with or without a restaurant, basic and luxurious, etc. 

As soon as you decide the type of hotel you will need to make the arrangements as per the need. For example, if you are planning on opening a big hotel with a restaurant then you will need a larger area as well as various amenities for a restaurant like catering services , sitting arrangements, etc. and hire people accordingly. 

Finding The Right Location for your Hotel

The ideal location for your hotel would be the one that welcomes a huge crowd of tourists every year. The more will the potential customers, the more are the chances to keep your business running. Cities like Mumbai, Agra, Kerela, Shimla, Bangalore, hill stations, etc. are the ones that serve as a tourist hub.

Setting up your hotel in these locations will earn you a great deal of profit. These cities do not only attract tourists from within the country but also from different parts of the world. 

After deciding on the city, you will have to find the area in the city where most visitors will prefer staying. Tourists always prefer the center of the city from where all the places that they are going to visit are near.  Also, hotels near train stations, airports, bus stations always make a good location for the business.

By making your hotel available in the main parts of the city will attract a large number of people that will give you huge revenue.

Deciding on Hotel Area

Depending on the size of your hotel and the number of rooms that you will have in your hotel, you will have to determine the area of your hotel business. A hotel with 80 to 100 rooms which is considered as midsized requires the approximate area of 10000 to 50000 square feet. 

This is a rough approximation, you will have to plan accordingly. Apart from the number of rooms, another aspect that will affect the area is various facilities like swimming pool, garden area, catering area, sitting area, reception hall, etc.

The Layout of your Hotel

Layout basically means the blueprint of your hotel. You can seek professional help in this process like architectures and interior designers . Architectures will help in planning and designing of your hotel area. This area deals with the exterior construction of your hotel building.

On the other hand, hiring an interior designer will help you make your place much attractive. Before getting experienced with the quality of your service, the initial impressive factor of the hotel business is its look. And the more attractive it looks, the more customers it is going to attract.

Just hire the professionals within your budget with personal references or from the internet. Before hiring an agency, always google them to look for the reviews. 

Investment Source

Investing in a big business plan like a hotel sometimes requires financial assistance. In this case, you have three options, first is to look for potential investors, second is applying for a loan to a bank, and third is involving your friends and family that are interested in being a partner in your business plan.

There are various private investors that are looking for investing in a business plan that they think has the ability to be a financial success. Making them invest in your business is possible if you remain successful in convincing them that your hotel plan will be a hit. Here are some online websites that will help you find private investors for your business- Angel Investment Networks , Nexus Venture Partners , 

You can also take help from the various crowdfunding sites in India like Wishberry , Fundlined , Indiegogo , etc.

The second method is applying for a business loan in the bank. There are various private and national banks that avail the business loans. In India, normally the bank provides 70% of the loan amount required for your business, the rest 30% you will have to arrange by yourself. You can apply for a loan at SBI , Bank Of Baroda , Axis Bank , ICICI , and HDFC Banks.  

Opening a hotel business sometimes requires partners that will assist you financially and personally. Having your friends and family to invest in your business plan is another way of finding financial assistance.

Investigating Your Competition

Competitor Analysis is a crucial part of starting any business. Your business competitions will be every hotel within the 10 kilometers radius of your hotel. In order to compete with them, you will have to do proper research of what are the facilities that they are providing, what are their prices, how is the quality of their services, etc.

After knowing everything about your competition, you will be more clear about everything and it will help you customize your hotel and its services accordingly.

You can also follow the standard rules of various famous hotel chains in India such as Oyo , Radisson , Royal Orchid , etc.

Getting Permits and Licenses

Different countries have a different set of regulations for running a hotel business. In India, you are required to get the following permits and licenses from the concerned authority that is mandatory for opening a hotel business.

• Land Permit – You will have to take the permit from the government that the land you have bought or rented is for commercial use. The permission is provided by the local municipal authority. You can find the municipal corporation link of your city here . 
• Health/Trade License – In order to get this license you will need to contact the Local Civil Authority. You can also register online by clicking here .
• Food Safety License- This license can be obtained by the Food Safety and Standard Authority of India shortly known as FSSAI .
• Eating House License- You can obtain this license from the Licensing Police Commissioner of the city in which you are establishing your business. You can also apply for the certificate online by clicking this link . 
• Liquor License- This license is only required if you are planning on availing the bar and liquor facility at your hotel. For this license, you will need to contact the local Excise Commissioner of the city or register online by visiting this government website .
• Fire Department License- For this license, you will need to contact the fire department of the area of your hotel. You can search for your state license department here . 
• Pollution License- This license is required if you are planning on conducting various events in your hotel. You can obtain this license from the Pollution Control Board of your city. Or you can also visit the Central Pollution Board of India website.

Apart from this, you will also have to contact the Indian Tourism Board for the rating of your hotel.

Hiring the Staff

Recruitments of the staff are done depending upon the need. Hotel businesses require hiring a great deal of staff for various purposes. For example, you will need staff for the following areas. 

• Front office staff- These employees will greet the customers, assign them rooms, and keep an account of their payment.
• Housekeeping Staff- For the cleaning of your hotel and rooms and for carrying the luggage of your customers. 
• Managers- The manager is the one who is responsible for handling everything at the hotel. Hotels have managers for different areas like line managers handle employees, marketing managers handle marketing strategies , etc.
• Supervisor- Supervisor is the one who looks after everything happening at the hotel and checks for fault. 
• Waiters- Waiters are for bringing the food to your room if you order room service, or if you have a restaurant, then for waiting at your table.
• Cook- Chefs and cooks are required if your hotel also has a catering service, etc.

There are various online platforms that will help you in the hiring process. You contact various third party websites like LinkedIn , Glassdoor , Shine , etc. These websites work as a connecting link between the employees and the company.

Transport Facilities

Most people will book your hotel online with the intent to minimize hassles on the day of their arrival. So they will look for the hotel that will help them do so. The availability of transport facilities by any hotel is always a plus point that attracts the customers.

The facility of picking the customers upon their arrival from the train station or airport and dropping them at the time of departure is the one that most of the visitors seek in their hotel.

Marketing of your Hotel Business

Like any other business plan, the hotel business also requires the implementation of the right marketing strategies. You can opt for the following ways to reach more and more customers.

• Creating a website – Website will help you build credibility for your hotel as well as it will help you reach more customers. WordPress provides you a great platform for creating a website in a small budget. 
• Social Media – Facebook , Instagram , and other social media platforms serve as the best platforms for social media marketing.
• Google My Business – Nowadays no one books a room online without reading the reviews online. So make sure you have your business listed on Google My Business that will help the customers rate and review the hotel services.
• Inauguration Ceremony – Organizing a big event to spread out the word about your hotel business is also a traditional marketing strategy.
• Leaflets – Leaflets and pamphlets are the old fashioned marketing strategies that are equally effective in today’s world. 

Any business plan can be successful if followed by dedication and the right guidance. With the increasing amount of hotel businesses, the competition has only grown higher. Therefore it is necessary to provide your customers with quality services that will give them a reason to come back again and again.

Tourists visit different cities in order to enjoy various famous places and tourist attractions in the area but having a good experience at a hotel can make their trip even more memorable. These step by step guide to planning your business will help you make your hotel more customer-friendly and generate huge revenue.  

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A Complete Guide to Starting a Hotel Business in India

Over the past ten years, the tour and travel industry has experienced significant growth. The hotel industry has seen a huge expansion in the tourism market as more people travel for leisure and business, not just domestically but also internationally.     

The Hotel business in India is one of the most profitable and ideal business ventures in India. Because of the top attractions and diverse cultures of India, international travel is growing steadily. Therefore, starting a hotel business might be a lucrative venture.   

What is the Hotel Business in India?   

In India, the hotel business is a foundation that provides meals, lodging, and other guest services. In India, an establishment must have a minimum of six guest rooms, at least three of which almost certainly have to connect private bathrooms. Although hotels are categorised into “Star” categories (1-Star to 5-Star), there is no set method for assigning these ratings, and consistency with basic requirements is intentional. 

There are some crucial things you should take into consideration if you want to start a hotel business in India. You will learn about the crucial information to launch a hotel business in India in this article.

How to Establish a Hotel Business in India?  

1. select a name for your hotel   .

Choosing a name for your hotel is the first step in launching a successful hotel venture. Because your hotel’s name will serve as your brand and be in use forever, this decision is crucial. Ideally, you choose a name that will stick in people's minds. Following are some suggestions for naming your hotel business:

• Check to see whether the name is available. Search trademark databases and the list of legally registered business names in your state to see if a name is already available. Check the availability of a decent domain name as well.  
• Ensure simplicity. The best names are typically those that are easy to spell, pronounce, and remember.  
• Consider marketing. Create a name for your hotel that expresses the desired identity and/or purpose of your establishment.

2. Create a business plan for your hotel  

Making a thorough business plan is one of the most crucial tasks in starting a hotel business. You can be confident that you fully comprehend your market and business strategy because of the process of building your hotel business plan. You can use the plan as a guide as you proceed and, if necessary, show it to potential investors for your company.

The business plan you create for your business must include the following sections:  

• Executive Summary: This part should include a summary of your entire business strategy so that readers may immediately understand the most important information about your hotel.   
• Company Overview:  The reader is informed about the background of your hotel and the kind of lodging you offer in this area. For instance, are you a boutique hotel or an inn?  
• Business Analysis: Here, you will record important data about the hotel business. Conduct market research to determine the size of the sector and the trends that are affecting it.   
• Analyse your target customers: You will include the features of your ideal or target clients in this section. For instance, what is their income level? What services do people expect from a hotel? What factors do they consider crucial when selecting a place to stay?  
• Competitive Analysis: Here, you will list the main direct and indirect rivals you will confront and describe your strategy for gaining a competitive edge.    
• Marketing Plan: Your marketing plan for the hotel should identify four Ps —Product, Price, Promotion, and Place.  
• Operational Plan: Here, you will identify the crucial procedures you will require to manage your daily business. You need to determine your staff requirements. The expected growth timeline you develop in this part of your strategy will highlight the milestone you hope to achieve in the next years.      
• Team Management: This section consists of the details about the team management of your hotel.  
• Financial Planning: Finally, financial planning consists of the answers to the following questions: 
• What is the expenditure of starting a hotel business? 
• How will your hotel business make a profit?
• What are the expected sales and express for the coming five years? 
• Do you need to arrange funds for starting a business?

3. Select the legal structure of your hotel  

The next step is to decide on the type of legal structure for your hotel and register it along with your business name with the secretary of state in each state where you can conduct business. Here are the top 5 legal structures:

• Sole Proprietorship
• Partnerships 
• Limited Liability Company

4. Arrange to fund your hotel    

You may have decided that you need to raise money to start your hotel business when creating your business plan. Your choice of whether to purchase and renovate an existing property or build a new one will have a significant impact on when you may open your new hotel and the amount of funding you'll require. 

5. Find a place to start building   

Appropriate space is crucial for any hotel, and picking the ideal location can have a significant impact on your bottom line. Think about these factors to find the perfect area

• Number of rooms your hotel will have.
• What are the zoning requirements for hotels in your area?
• Is the local market a good match for your target customers?

Working with architects to set up a schedule and calculate expenditures is also necessary if you want to develop a new building for your hotel.   

6. Register your hotel with IRS  

The Internal Revenue Service (IRS) will issue you an Employer Identification Number (EIN) if you register your company with them (EIN).

You will often need an EIN in order to open an account with a bank. Additionally, since the IRS uses your EIN to track your payroll tax payments, you will need one in order to hire employees.

Note that you typically do not need to obtain an EIN if you are a single entrepreneur without workers. Instead, you would keep your social security number as your taxpayer identification number (instead of your EIN).  

7. Open a bank account for your business   

It's crucial to open a bank account in the name of your hotel. The stages involved in this straightforward technique are as follows.

• Find and get in touch with the bank you want to utilise.
• Obtain and provide the necessary paperwork, which typically consists of the articles of incorporation for your business, a driver's licence or passport, and a proof of address.
• Fill out the bank's application form completely and include all necessary details.
• To discuss your company's needs and build a connection with a banker, arrange a meeting.

8. Get Insurance for your hotel  

To secure your brand-new hotel, you must have the appropriate business insurance. You should take into account the following business insurance coverage for your hotel:

General Liability Insurance: This insurance protects your hotel operation from third-party claims of physical harm, property loss, and personal injury arising on your property or as a result of your operations. 

Employees' compensation insurance: You may need to get worker's compensation insurance if you have employees. If your staff is hurt on the job or falls ill as a result, the insurance will protect them.  

Property Insurance: This insurance includes loss or damage to your hotel's property as a result of fire, theft, vandalism, and other specified events.  

9. Hire staff for your hotel  

The employees will be appointed based on the size and requirements of the hotel industry. They include front desk employees, housekeepers, line heads, directors, waiters, chefs, servers, etc.  

Necessary Licence and Registration You Need to Start a Hotel Business  

• Company Registration
• Building Licence
• Police Licence
• Health Trade License or Trade License
• ESI Registration
• Sales Tax Licence
• PF Registration
• Bar Licence
• FSSAI Food Licence
• GST Registration
• Fire Safety Permit

Acquiring these licences and registrations is the challenging part of the establishment of a new hotel business in India, but still,  it is necessary for the smooth running of your business.  Therefore, you must consult professional teams who will help you complete the required registrations and get the licences easily. 

Conclusion   

If you follow the above steps, you ought to be in a fantastic position to develop a prosperous hotel business in India. You can also contact our legal experts at Online Legal India to obtain the necessary licence and complete your documentation. You will get the service completely online and hassle-free.  

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How to Start a Successful Hotel Business in India

If you are looking to start a hotel business in India, there are many factors to consider before taking the plunge. From identifying a niche market to securing funding and choosing the right location, there are many challenges that you will need to overcome in order to create a successful hotel business. In this article, we will explore the key steps that you need to take in order to start a hotel business in India, including market research, funding, legal requirements, and more.

Starting a hotel business in India can be a rewarding venture, but it also comes with its own set of challenges. In order to succeed, you will need to conduct extensive market research, develop a solid business plan, secure funding, and navigate the legal requirements for opening a hotel. This guide will provide you with a comprehensive overview of the key steps that you will need to take in order to launch a successful hotel business in India.

2. Conduct Market Research

Before you start your hotel business, it is important to conduct market research to identify potential customers, competition, and market trends. Some of the key factors to consider include:

• The size and growth potential of the market
• The demographics of your target audience
• The types of hotels that are currently available in the area
• The amenities and services that are in demand
• The pricing strategies of your competitors

By conducting market research, you can gain a better understanding of the needs and preferences of your target audience, and identify opportunities to differentiate your hotel from the competition.

3. Develop a Business Plan

Once you have conducted market research, it is important to develop a business plan that outlines your goals, strategies, and financial projections. Your business plan should include:

• An executive summary that provides an overview of your business and goals
• A description of your hotel concept and target audience
• An analysis of the competition and market trends
• A marketing plan that outlines how you will attract customers
• Financial projections, including revenue and expenses

Your business plan will serve as a roadmap for your hotel business, helping you to stay focused on your goals and strategies.

4. Secure Funding

Starting a hotel business can be expensive, and you will need to secure funding in order to cover your initial costs. Some of the financing options that are available include:

• Venture capital
• Crowdfunding
• Personal savings

When applying for funding, it is important to have a solid business plan and financial projections, as well as a clear understanding of your funding needs and how you plan to use the funds.

5. Choose the Right Location

Choosing the right location is critical to the success of your hotel business. Some of the factors to consider when selecting a location include:

• Accessibility to transportation and attractions
• Availability of land or buildings
• Local zoning laws and regulations
• Competition in the area
• Local taxes and fees

By carefully evaluating potential locations, you can identify the best option for your hotel business.

6. Register Your Business

Before you can open your hotel, you will need to register your business with the appropriate government agencies. Some of the registrations and certifications that you may need include:

• Business registration with the Registrar of Companies (ROC)
• Goods and Services Tax (GST) registration
• Fire safety certification
• Food and beverage licenses
• Health and hygiene permits

By obtaining the necessary registrations and certifications, you can ensure that your hotel is operating legally and in compliance with local regulations.

7. Obtain Permits and Licenses

In addition to registering your business, you will also need to obtain permits and licenses before you can open your hotel. Some of the permits and licenses that you may need include:

• Building permits
• Environmental permits
• Liquor licenses
• Entertainment licenses

The specific permits and licenses that you will need will depend on the location and type of hotel that you are opening. It is important to research the requirements for your area and ensure that you obtain all necessary permits and licenses before opening your hotel.

8. Hire Staff

A successful hotel business requires a team of skilled and dedicated staff members. Some of the key positions that you may need to fill include:

• Front desk staff
• Housekeeping staff
• Maintenance staff
• Food and beverage staff
• Marketing and sales staff

When hiring staff, it is important to look for candidates with relevant experience and excellent customer service skills. Providing training and development opportunities can also help to build a strong team and ensure that your hotel runs smoothly.

9. Design Your Hotel

The design of your hotel is an important factor in attracting and retaining customers. Some of the elements to consider when designing your hotel include:

• Room size and layout
• Furniture and decor
• Lighting and ambiance
• Accessibility and safety features
• Landscaping and outdoor amenities

By creating a welcoming and visually appealing environment, you can enhance the customer experience and build a loyal customer base.

10. Equip Your Hotel

In addition to designing your hotel, you will also need to equip it with the necessary furniture, equipment, and amenities. Some of the items that you may need to purchase or rent include:

• Beds and linens
• Towels and toiletries
• Kitchen and dining equipment
• Fitness equipment
• Business center equipment

By investing in high-quality equipment and amenities, you can provide a comfortable and convenient experience for your guests.

11. Develop a Marketing Strategy

In order to attract customers to your hotel, you will need to develop a comprehensive marketing strategy. Some of the key elements of a successful marketing strategy include:

• A strong brand identity and messaging
• A user-friendly website and online booking system
• Social media marketing and advertising
• Email marketing campaigns
• Loyalty and referral programs

By effectively marketing your hotel, you can increase your visibility and attract a steady stream of customers.

12. Ensure Legal Compliance

In addition to obtaining permits and licenses, it is important to ensure ongoing legal compliance in your hotel business. This may include:

• Adhering to labor laws and regulations
• Maintaining accurate financial records
• Complying with health and safety regulations
• Protecting customer data and privacy

By staying up-to-date on legal requirements and best practices, you can avoid costly penalties and legal issues.

13. Provide Excellent Customer Service

Providing excellent customer service is crucial to the success of your hotel business. Some of the ways that you can enhance the customer experience include:

• Offering personalized service and attention
• Responding quickly to customer requests and complaints
• Providing high-quality amenities and services
• Creating a welcoming and inclusive environment
• Encouraging customer feedback and using it to improve your operations

By prioritizing customer service, you can build a loyal customer base and generate positive word-of-mouth referrals.

14. Manage Your Finances

Effective financial management is essential to the success of any business, including hotel business. Some of the key financial management strategies to consider include:

• Developing a budget and sticking to it
• Monitoring expenses and revenue closely
• Tracking cash flow and maintaining reserves
• Planning for taxes and other financial obligations
• Investing in long-term growth opportunities

By effectively managing your finances, you can ensure the long-term sustainability and profitability of your hotel business.

15. Conclusion

Starting a hotel business in India can be a challenging but rewarding venture. By conducting extensive market research, developing a solid business plan, securing funding, and navigating legal requirements, you can create a successful and profitable hotel business. By providing excellent customer service, investing in high-quality amenities and services, and staying up-to-date on industry trends and best practices, you can differentiate your hotel from the competition and build a loyal customer base. With dedication, hard work, and a commitment to excellence, you can launch a successful hotel business in India.

What are the legal requirements for opening a hotel in India?

Legal requirements for opening a hotel in India include business registration, GST registration, permits and licenses, and compliance with health and safety regulations.

How much funding do I need to start a hotel business in India?

The amount of funding required to start a hotel business in India can vary depending on factors such as location, size, and amenities. It is important to conduct a thorough financial analysis and secure adequate funding to cover initial costs.

What are the most important amenities to offer in a hotel?

The most important amenities to offer in a hotel depend on the target audience and location. Some popular amenities include comfortable beds, clean and well-stocked bathrooms, free Wi-Fi, and complimentary breakfast.

How can I differentiate my hotel from the competition?

To differentiate your hotel from the competition, consider offering unique amenities, such as a rooftop bar or spa, or targeting a specific niche market, such as eco-tourists or business travelers.

What are the best marketing strategies for promoting a hotel business in India?

Effective marketing strategies for promoting a hotel business in India include developing a strong brand identity, creating a user-friendly website and online booking system, and leveraging social media and email marketing to attract and retain customers.

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How To Start Hotel Business In India- The Ultimate Guide For Beginner’s

Are you thinking or want to know the procedure of How To Start Hotel Business In India? Then you are in the right place. This article will give you all the information about the Procedure of How To Start Hotel Business In India which include a hotel business plan, ideas, and how to profit from it . The hotel business in India has become one of the most eye-catching businesses nowadays, and it is a high-profiting business. Yes, it takes a lot of investment, but if you plan everything properly and work hard, you can start making vast amounts of money soon. 

It is also proven that the Hotel business in India is very successful. Anyone with complete knowledge, experience, and money can have a start. The hotel business is simple, but it requires much hard work to do. You should have the best management staff, the best location, the best facilities, and the best behavior.

The environment and surroundings also significantly influence the hotel’s success. There are some unique profitable ideas for the hotel business in India: Five-star hotels, business hotels, airport hotels, villas or resorts, etc. All of them are immeasurably profitable if managed correctly.

How can I start my own hotel business in India?

Table of Contents

If you want to start your own hotel business In India, then you must follow these steps to take a start in the hospitality industry:

• The first step you must follow is to find your market needs, look for what the market lacks and discover what you can provide to make you different from your competitors. For that, you must closely examine the market and research and visit places to find your value. It will make you sure about your target audience, how the market behaves, and how to survive in the hospitality industry.
• The second step is to make a strategic plan for your Hotel business. Now that you know the market, you must determine how your system will work. What you will be décor, where will be the location, how much space you will have, what kind of facilities you can provide, where to get the staff, how much and where you will charge your customers and many more things that include in your strategy. 
• Now the third step comes in; you must do the finance in this step. Calculate all the costs of everything that will be used, how much everything will cost, and from where you can get that investment. You will determine whether your business is profitable or must compromise for some years by running all the numbers. You must arrange a finance team to look after your sales and all the revenue management. But remember, this Hotel business In India requires a humongous amount of investment.
• The next step includes your financial plan to launch your business and all the paperwork. You must register your hotel and discuss your financial project with your bank, which will provide you with all the money and resources to start your hotel business.
• Now you have to hire and train your management team, which will look after all the management work available in this hotel. It is a huge responsibility because it is the most fundamental thing of the hotel. The first thing customers look for is a good experience, and providing it depends on your management team. Then you will hire your marketing team to advertise your hotel to the world and make it reach every end of the world. Marketing is also essential because, with it, you can get the public; you also must create breathtaking profiles on social media which attract the audience towards you.
• The last step is launching your business after you have done all the hard work, now is the time the world will know about your hotel and can make reservations for rooms or arrange any event.

By following these steps, you can start your own hotel business In India, and after some time of patience and hard work, you will get your reward in high-margin profit.

What is the most profitable part of a hotel Business

Most of your revenue comes from hotel room rentals. The hotel business generates revenue from hotel rooms, restaurant food, beverages, and any event inside the hotel.

The hotel derives significant revenue from very few things hotels mostly earn from rental spaces, but they make massive amounts of money from one thing, providing them with much income.

Likewise, the hotel industry also gets much revenue from their restaurants. Every person will eat food or buy anything that will directly benefit them in a vast amount. So, the hotel business In India can be very profitable if they provide the best services, which will make their customers and increase their reputation. 

How can I make my hotel Business profitable In Indian Market

The hotel business requires a sharp mind who can profit from nothing. There are some methods through which you can increase your hotel revenue.

These ways include You can offer early check-in and Late checkout. It will help you in many ways because sometimes travelers are willing to leave early or stay for a bit more, so you can offer them and profit from it.

You can partner up with local events which can take place at your hotel, and in this way, more of the public will come to know about your hotel.

Another thing you can do is make a strong media team that will update your Hotel website; social media accounts with new prices and offers; you can also do promotions in the off-season, attracting the audience towards your hotel.

By following Tis Natural tips You can easily Make Hight profit From Your Hotel Business In Indian Market.

What are the top amenities you plan to offer guests at your hotel

What amenities are hotels’ unique facilities and perks, such as exemplary customer service? These amenities are given to make customers happy and make their trip better. Amenities are essential because the customers always remember the little pleasures of the hotel, which will make them come again. They can also recommend your hotel to their families, so eventually, in a chain cycle, it will benefit your hotel. 

The top amenities you can offer guests are welcome gifts, Coffee kits and mini fridge, personal care items, complementary books, complimentary breakfast, and many more. Providing these will increase the joy in the customers, and they will enjoy being at your hotel, which will ultimately help your business.

How do you plan on differentiating your hotel from others in the area

You can differentiate yourself from your competitors in many ways, such as by working on your target audience. The one thing is making your own identity and then attracting the public towards your uniqueness. Find the target groups for which your hotel is designed and offer them all the facilities; in this way, you will be different from your competitors. It would be best if you also worked in your technical department. Always stay updated with the world and upgrade the technologies as they upgrade daily.

Customers like it when the hotels are fully upgraded with the technologies. Customers always find ease in everything, so providing that easiness to them will offer more value to your hotel business in India than other competitors in the area.

What type of guests do you think your hotel will attract

There are many types of guests in this world. Everyone has their purposes for their stay; some come to enjoy, some come for meetings and events, some come only to spend the nights, and some come from other cities to attend any function. Hotels will always attract the type of audience that they hotel will target. If you are targeting travelers, a business person may need help to stay at your hotel.

Most hotel business in India provide facilities to travelers because India has good traveling locations, more people will visit your country and find your hotel. They will get attracted by the promotions and offers that are running on social media.

Is owning a hotel In India a good investment

Investing in a hotel is considered one of the most profitable ways to increase your money Specially In India. Owning a hotel Business in India gives you many benefits. Investing in a hotel is the perfect way to double your money. The hospitality industry offers the highest rewards in the market, so if you are hard-working and have an ideal plan to work your things out, you can generate much revenue from this business. It is the most successful business in the real estate industry, but one thing that is required is a large amount of money; you have to invest very big.

Owning a hotel is a good investment because it has almost negligible chances of failing. It has tax facilities, you can build your community, and you can provide facilities to tourists; you can also promote tourism in other countries and make our country a global tourist spot.

What is a hotel’s primary source of income

The hotel Business in India provides many facilities, and from that, they make their revenue in different ways. The statistics say that the primary source of income for the hotel in India is rental rooms that they provide to travelers, their customers, guests, and businessman. The cost of rent per room gives them vast amounts of money every day. At the end of the year, it becomes the huge amount of yearly revenue that they generate just by renting the rooms.

They also have restaurants and other paid facilities that benefit them, and they sometimes also offer to arrange events which adds to their revenue. The hotel business possesses a considerable profit margin, and its primary source of income is rental rooms. 

Why the hotel industry is the best:

The hotel industry is considered the best because it has a history of people investing their money in this business and making much money. History and statistics tell us that this industry is very profitable. This industry is also good because it has a future. After all, traveling cannot be banned anywhere in the world at any time, so the hotel Business in India have a superb lot ahead.

The hospitality industry is also considered good because this business plan has few chances of failing. It has many opportunities and a more extensive community to help you in the market. It gives you room to grow; you can become a better version of what you are today. This opportunity motivates most business people to grow more and more. The most fun reason is that you can enjoy all the facilities and enjoy some time in your resort or hotel.

Which is the best field in hotel:

The hotel industry has many jobs and fields to have a future. You can start with a lower position, gain experience, and even be promoted to a better post. The best area in the hotel is the hotel manager. You have complete responsibility for the management of the hotel. You must control and ensure every guest stays peaceful and joyful; no one should face any inconvenience; it all depends on you. But many other jobs are available, like reservation manager, media person, marketing agent, etc. You find your field of work and become a pro at it, and then the hotel will want to give a job to you.

At the end of the article, the business plan in the hospitality industry requires much investment. Still, it provides the satisfaction that your business will reach its high if you have the best projects, management, and strategic goals.

This field of work has a great future, and you will learn a lot of new market strategies; you will understand and make significant revenue out of it once you have started your business and it has shown you a little positive response.

It needs massive hard work and consistency, and most importantly, your patience level must be at its best level because this field will take time but eventually will benefit you. All you have to do is give the best experience to your guests and gain more public attention to your hotel. One day it will profit you in ways you have never imagined.

Here Are Some more Hotel Business India.

• What is a good profit margin for a hotel?
• Studies show that 10% of the profit margin is good profit for a hotel.
• What is the most profitable hotel in the world?
• Marriott International is the most profitable hotel in the world.
• What is a perfect sale in hotels?
• Perfect sale is considered when all the rooms are occupied or rented.

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How To Start A Hotel In India- A Start-Up Guide

The COVID-19 pandemic has hit the hospitality industry, causing several hotels to shut shop and terminate the jobs of thousands of employees. However, that doesn’t mean the hospitality industry is dead, just that it needs to work some things out.

Table of Contents

Start A Hotel In India: Overview

Until COVID-19 hit the country, the hospitality industry was thriving all around the world. India too was no exception, with rooms getting booked months in advance. It’s not just the luxury hotels that did well; affordable boarding and lodging also garnered revenue, thanks to people taking quick weekend getaways . Know more about how to Start a Hotel In India?

While the current situation has hampered the growth of these businesses, it is always a rewarding experience to be in the hotel or Start a Hotel Business in India for that matter in the hospitality sector.

The hotel industry accounts for a $1 billion market size as of 2019. However, due to the current pandemic situation, the revenues have declined by 48% but the industry is likely to witness a boom by 2021-2022 due to various factors. 

Similarly, there are few things one must understand before establishing a business and we at VakilSearch are here to help you with a start-up guide on how to start a hotel business in India. 

• Understanding the business models
• Understanding the investment
• SWOT analysis
• Location and property registration
• Licences and permit knowledge
• Labour recruitment and compliances

Types of Business Models in the Hotel Industry

After a complete data analysis on the industry sector, the following business models can be listed down based on size, location, ownership, and target market.  

Apart from the above-stated lists, another business model that can be a profitable option can be hotel aggregators. Similarly, a hotel aggregator is a piece of technology that searches several different hotel room suppliers for available hotel rooms and returns them in one search query. Additionally, it powers a hotel booking engine. Further, the aggregator model refers to a business approach utilised by various enterprises in the e-commerce space, wherein such businesses gather information on specific goods and services from various competing sources in the market through their online platform.

Understanding the Investment Model

A vital step in the hotel business is to understand the investment which will be required to start a business. Moreover, there are certain factors that will determine the investment required, such as size, type, location, nature of the Business Ideas, government regulations, licenses and permits required, etc.; based on the level of the amount which can be invested, the category of the hotel can be decided. Further, if financial assistance is required, loans are always an option. Normally 70% will be provided to you by banks. 

Swot Analysis of the Business

The first step will be to identify the strengths, weaknesses, opportunities, and threats. Moreover, an example of strengths include the potential rise of tourist influx thanks to your hotel; weaknesses include the cost of land; opportunities, like strengths, look at the number of tourists in a tourist-heavy country like ours; while threats focus on what the competition is doing.  

Identification of the Location and Property Registration:

The important step in establishing the business is to identify the location and demand in that particular location. Further, based on the demand, the size requirement can be ascertained and the location of the hotels can be determined.

Likewise, for example, if the intent is to open a mid-sized or small-sized hotel with 100 or fewer rooms: 20,000 to 50,000 sq ft. can be an appropriate land area and if the intent is to open a five-star hotel with amenities then 1,00,000 sq ft or so can be preferred. Further, another aspect to deal with is whether the hotel has to be established on an ownership basis or rental basis. Similarly, that is, whether the land has to be purchased (own premises) or rented premises because this will again affect costs during the registration and due diligence process.

To register your land with us please get in touch with our experts to understand the legal obligations of the registration

List of Licenses and Permits Required

A list of licenses and registrations are necessary to obtain for beginning a hotel business in India 

NOC from Ministry of Tourism

Additionally, registration and functioning of hotels in India require permission to be obtained from the Ministry of Tourism.

Premises/Building Permit

Further, All the hotels must get a proper building permit according to the relevant Town Planning or Development or Municipal Act.

Fire Safety Permit

A fire safety certificate is given to those premises which have to subsume up to the mark fire prevention and fire safety measures as per the relevant fire safety rules and regulations.

Public Performance License

This is permission or license from the copyright holder of the song or expression which is going to be used for any event organised at your hotel. 

Eating House License

Additionally, an eating house license is an integral license for conducting business where any kind of food or drink is supplied for consumption legally. 

Signage License

If one wants to sell your restaurant either through word of mouth, logos, posters, pictures, and symbols, they are required to obtain a legal permit, which is the signage license. 

Police License for Hotel

Similarly, all the hotels must maintain proper data of all guests who are visiting the hotel. Moreover, follow all the relevant rules and regulations and sustain a valid permit from the police.

Health Trade License or Trade License

A health trade license is generally for the local health department. Further, the municipal corporation of that area issues this license. Additionally, following the equivalent hygiene and safety regulations that are necessary for health is a prerequisite for issuing a health trade license.

Business Registration: Further, it is recommended to set up a hotel for a company or LLP.

Bar License

 A bar permit will be required from the applicable experts. Moreover, the bar permit is normally given by divisions working under the state government. 

FSSAI Food Business License

An FSSAI nourishment business permit under the Food Safety and Standards Act is for working at an eatery in India. Further, the FoSCos FSSAI sustenance business permit typically accommodates multi-year licenses. 

Shops & Establishments Act Registration:

A license under the Shops & Establishments Act should be obtained if the place of business is also used for any commercial activity in direct relation to any kind of trade that is defined under the Shops and Establishment Act of that particular state.

Certificate of Environmental Clearance

Further, the restaurant is not only responsible for ensuring the health of the customers, but they are also legally and morally bound to ensure that its operations must not negatively harm the nature of the mother earth. 

Pollution Certificate : Additionally, the pollution control committee of your city or region will be responsible for providing this license or NOC to ensure that the establishment does not violate pollution norms. 

Lift Clearance

Further, in case of installation of a lift in a multi-story restaurant, clearance from an inspector from the electricity department as well as the Labour Commissioner will be required. Additionally, the electrical inspector issues the clearance.

OSP Registration:

As per the New Telecom Policy (NTP) of 1999, service providers in India involved in e-commerce, call centres are termed as ‘Other Service Providers’ (OSP). 

Information Technology Compliance:

The business and online platform need to be compliant with the Information Technology Act of 2000 and the underlying rules such as intermediary guidelines, data privacy rules, etc.

‘ Sarai’ means any building used for the shelter and accommodation of travellers. The Act by such notice requires the keeper to register the Sarai as by this Act provided.

Labour Law Compliances:

Esi registration.

ESI is the autonomous corporation functional under the Ministry of Labour and Employment, Government of India. Similarly, registration with Employees State Insurance is necessary for business in India which hires 10 or more employees. 

PF Registration

An Employee Provident Fund (PF) Registration requires any establishment that employs more than 20 persons in India. Further, the PF Board administers a contributory provident fund, pension scheme, and an insurance scheme for the workforce engaged in the organised sector in India.

Taxation Compliances

Income tax registration and returns.

Additionally, the income tax return is a form that is used to file the income tax with the Income Tax Department. Further, all entities will need to file their taxes on time and avoid penalties. Moreover, the form that contains information about income and tax payment by an assessee is the income tax return.

GST Registration and Returns  

As per the GST law, every individual/company/LLP registered under the GST: https://www.gst.gov.in/ and the tax paid by filing form GST returns with the administrative authorities. Additionally, as a business person/ firm, one of your priorities will be to do a GST return filing

Applicable GST Rates

Professional tax registration.

Additionally, professional tax (PT) compliances laid down by many states as being applicable to companies making payments. Further, this is to their employees working in PT applicable states.

Insurance Guidelines

The main insurances:

• Public liability – under the Public Liability Insurance Act of 1991. This insurance covers the amount which the insured becomes legally liable to pay as damages to third parties as a result of accidental death, bodily injury, loss, or damage to the property belonging to a third party
• Product liability – under this, if the product proves to be dangerous or defective and it causes injury to a person or property, then this insurance cover is just what one needs
• Fire policy – further, this policy will indemnify you against damage to your property caused by fire, lightning, or explosion. 

What are the legal requirements for starting a hotel in India?

To start a hotel in India, legal requirements include obtaining necessary licenses such as FSSAI (Food Safety and Standards Authority of India), health licenses, and fire safety approvals. Compliance with local building codes and registration with the local tourism department is also crucial.

How can I secure funding for my hotel start-up in India?

Securing funding for a hotel start-up in India can be achieved through various means. Options include traditional bank loans, venture capital, private investors, government schemes or partnerships. A well-prepared business plan is essential when seeking funding.

What key factors should I consider when selecting a location for my hotel in India?

When selecting a location for a hotel in India, factors such as proximity to tourist attractions or business districts, accessibility, local demand and competition should be considered. Assessing the target market and understanding the local hospitality industry is crucial.

What licensing and permits are necessary to operate a hotel business in India?

Operating a hotel in India requires obtaining licenses and permits like the FSSAI License, GST registration, health permits and fire safety clearances. Compliance with local municipal laws and regulations is also essential for smooth operations.

What marketing strategies can be employed to attract customers to a new hotel venture in India?

To attract customers to a new hotel in India, employ effective marketing strategies. Utilize digital marketing, social media platforms and online travel agencies. Offering promotions, collaborating with local businesses, and providing exceptional service can also enhance visibility and customer engagement.

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How To Start A Hotel In India

• Post author: Kanakkupillai
• Post published: July 30, 2021
• Post category: Business Tips / Latest News

How To Start A Hotel Business In India

Hotel in India is one of the lucrative and best business ideas In India, as in India travelers inflows are expanding step by step because of the prime attractions here and assorted culture. Henceforth, lodging business can be one of the gainful organizations to begin. A business foundation giving lodging, dinners, and other visitor services is a Hotel business In India. All in all, to be known as a Hotel in India, a foundation must have at least six letting rooms, no less than three of which more likely than not joined private washroom offices. In spite of the fact that lodgings are grouped into ‘Star’ classifications (1-Star to 5-Star), there is no standard strategy for doling out these appraisals, and consistence with standard necessities is deliberate.

Step 1: Find a market need.

The first and most important step when learning how to start a hotel business is to gain a thorough understanding of the hospitality industry worldwide, as well as in your location. To get started, find your favorite hotel news sources, then set aside time each day or week to stay informed. Once you have some familiarity with the industry, it’s time to dive into the market research for your hotel.

It is a great place to start business registration in India . It’s where you can read the latest news, thought leadership, and best practices from a wide variety of industry experts. The goal of your industry research is to get a clear idea of whether you can be competitive in your market. Also, what characteristics your hotel will need in order to succeed.

Rather than starting with an idea and making the research fit, try to find an area of need in your market. What audiences are underserved? Where is demand outpacing supply? What does your location need in terms of hospitality and accommodation?

To give you a good understanding of where you’ll fit in, your market research should include:

• Property type:  All hotels are not built the same. The industry is made up of resorts, spas, airport hotels, all-inclusives, hostels, boutiques, and many other property types. Determine what property type you plan to offer and what other options in that category exist in your location.
• Hotel size:  Closely related to your property type is the hotel size. How many guest rooms will you offer, and how does that compare to your competitors?
• Star rating:  What level of service and hotel amenities do you plan to offer?
• Location: What region will you operate in? Is demand increasing in the area? What location amenities, like airports, beaches, or event venues, will you be in close proximity to?
• Brand affiliation: Will you be a part of a larger brand’s umbrella? Being affiliated with a brand can help with marketing, business intelligence, pricing, and audience targeting.
• Extra amenities:  What services or amenities are important for hotels of your type and star rating in your location? Things like free Wi-Fi, meeting space, a pool, or wedding services are all important, depending on your target audience.
• Guest demographics: How would you define the types of guests who may frequent your location? What is the purpose of travel, and what are some common characteristics of these travelers? Knowing whether you are targeting business travelers, families, couples, solo travelers, retirees, or other demographic groups will help you to craft your marketing plan and hotel concept.

[Also check our Article: How to Start a Rice Business in India ? ]

Step 2: Craft your hotel’s strategic goals.

Once you have an understanding of market needs, you’ll need to create a smart solution to fill that gap. Your unique combination of amenities, concept, decor, marketing, location, and services can help you stand out from the crowd and capture market share if you approach it strategically.

• Measuring and increasing customer satisfaction.
• Creating a solid revenue management system.
• Building a strong online reputation.
• Attending at least one hotel industry conference.
• Considering working with a consulting firm to bypass the common roadblocks new hotel owners face.

Make sure the needs of the market and your target audience, along with your business needs, help determine your goals. This will ensure that everything you do helps your customers, as well as your bottom line.

Step 3: Run the numbers

With your goals and plan in place, it’s time to run the numbers to make sure you’ll be profitable. A basic overview of hotel finances will help you hire the right revenue manager and sales team later on. The two key areas to focus on are profitability and any external factors that may affect your hotel business. You’ll also need to estimate initial costs for your hotel business. This includes startup and hiring costs, licensing, permits, construction, renovations, and your first year of operations.

Set up a few scenarios in your forecasting to see how key decisions affect the potential profitability of your business. For instance, do you want to buy or build? Buying into a franchise or taking over an existing hotel building has lower startup costs, unless you have to renovate extensively. But it also requires you to establish your new hotel identity, which can be a challenge depending on the current state of the business. On the other hand, building a hotel, while usually considerably more expensive upfront, can provide a solution to a lack of available buildings and can be more lucrative in the long run.

[Also check our Article: Start a Jewellery Business in India ]

Step 4: Review financing options for your hotel business

Once you decide on the right financial plan for your business, you’re ready to fund it. There are a number of available options for financing your hotel business.

With traditional credit lines, you receive financing based on long-term assets. These are things like real estate owned by your hotel as well as cash flow projections and calculations submitted during underwriting. Lenders review these assets before awarding your loan.

With specialty credit, you’ll receive financing or credit lines based on near-term assets. This might be hotel equipment or invoices from accounts receivable. The idea is these backings are more liquid than what’s needed in traditional lending.

Step 5: Do your paperwork

There are many important legal, regulatory, and insurance requirements to fulfill in order to establish any new business. Your hotel business is no different.

Consult with your legal, insurance, accounting, and operations teams to determine the requirements for your location. At a minimum, you’ll need to set up a business structure and get business insurance. You will also likely need building or renovation permits, hotel licensing, and licensing for serving food and alcoholic beverages. There will also be a number of health and safety requirements as you complete your building or renovation process.

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Step 6: Hire and train your hotel team

A business is only as good as the team members that contribute to its success. By hiring great employees at all levels, you’ll set yourself up to deliver value to your guests and become a market leader.

Many hotels opt to hire for executive and departmental positions first, setting the tone and direction. These leaders can then identify what they want to see within their teams and how many staff members they need. Each team should identify the roles and skills they’re looking for, as well as developing a plan to reach and source great new hires.

Step 7: Draft a marketing plan

You’re now ready to share your hotel concept with the world. Well in advance of opening, you’ll need to spread the word and set yourself up for a profitable launch.

Your hotel marketing plan is an important part of your overall business strategy. It guides your decision-making on decor, daily operations, communications, customer service, and more.

Step 8: Launch your hotel business

At this point, you’ve put in the work to open a profitable and high-quality hotel business for your market. You’ve got the plan and the team to make your vision a reality. Now it’s time to launch.

The goal of your launch is of course to introduce your hotel to guests. But it’s also a great opportunity to introduce yourself to the local community, key stakeholders, influences, and potential partners. Put your best foot forward with these audiences by planning a grand opening event that reflects your mission and values.

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How to Start a Small Hotel Business in India: Business Plan, License, Permits, Setup Cost, Profit, and Requirements

Table of contents, investment needed to start a small hotel business in india, license/permits required for starting a small hotel business in india, requirements for starting a small hotel business in india, small hotel business plan – how do i write a business plan for a small hotel, how to start a small hotel business step-by-step , how to start a small hotel business with no money in india, small hotel business franchise in india, how to run a successful hotel business in india, profit margin in the small hotel business in india, taxes/gst in the small hotel business in india, challenges/risks involved in the small hotel business in india.

There is a growing demand for small hotels in India. These are usually family-owned businesses that offer simple, affordable accommodation. There are several reasons for this trend. First, the country’s population is growing rapidly, and there is increasing demand for affordable hotel accommodations. Second, hotel prices have increased dramatically recently, making small hotels attractive. Finally, many Indian people are now traveling and want to experience the local hospitality scene. 

Small hotels can be a great way to start your own business. They don’t require a large initial investment and offer much flexibility. You can run your hotel as a sole proprietorship or as part of a franchise network. The main downside of small hotels is that they can be difficult to notice. You must ensure you target the right market segment and deliver the right product at the right price. This blog post will explain the requirements, investment, and profit margin of a small hotel business in India.

How to start a small hotel business in India

Are you questioning the cost of opening a small hotel in India? Starting a small hotel business in India can be cost-effective, but it will require some investment. Here are the costs and what you’ll need to start up: To get started, you’ll need to purchase or lease a property. A small hotel typically costs between Rs 50 lakh and Rs 1 crore, although the price will vary depending on the location and size of the hotel.

You’ll also need enough money to cover initial operating expenses, such as marketing and occupancy taxes. In terms of staffing, you’ll need at least two full-time employees, including a general manager and a head of housekeeping. Additional staff may be necessary for tourism seasons, such as Christmas or Easter.

In case you missed it: How to Start a Tiffin Service Center in India: Business Plan, Setup Cost, Profit Margin, and Requirements

The average wage for a general manager in a small hotel is Rs 25,000 per month, while the head of the housekeeping salary is Rs 20,000. In addition, you will need to make sure that your property meets certain standards. In India, hotels must have at least 16 rooms and be 100 square feet (9 square meters). You’ll also need to install air conditioning and electrical wiring, provide safe drinking water supplies, and maintain a clean property.

Starting a small hotel business in India can be a great way to make some money and gain some experience in the industry. However, before starting any such business, it is important to be aware of the necessary licenses and permits that need to be obtained. The following are some licenses and permits typically required to start a small hotel business in India: 

• Hotel Management License : This license is required if you plan on running a hotel with more than 10 rooms. 
• Food Safety Certificate : This certificate is required if you plan to serve guests food. 
• Building Permit : This permit is necessary if you want to build or remodel a hotel structure. 
• Fire safety certificate
• GST number . Check with your local municipal office for required permits.
• Location : Ideally, a small hotel business should be in a metropolitan area. However, if the business is located in a rural area, it should still have good access to major transportation hubs.
• Possible Sources of Revenue : The most common sources of revenue for small hotel businesses in India are room rates, direct marketing, and catering services.
• Staffing : A small hotel business in India typically needs between two and five full-time employees.
• Operating Costs : The operating costs for a small hotel business in India are typically lower than for a larger hotel business. For example, the cost of property and equipment may be lower, as well as the cost of labor.

To write a hotel business plan for a small hotel, you first need to understand the different components of a business plan. A business plan should include the following;

• Business Overview 
• Market analysis 
• Product/service differentiation 
• Competitive landscape 
• Financial analysis
• Management plan

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Once you have a good understanding of the components of a business plan, you can start writing your own. Here are some tips to help you get started: 

• Start with an overview of your business . What is your company’s mission? What makes your hotel unique? How will guests find and visit your property? Then, write down everything you know about your company and how it will benefit customers. 
• Make a market analysis . What are the current trends in the hospitality industry? What are the key challenges facing small hotels today? By understanding the challenges and opportunities in your market, you’ll be able to create a unique selling proposition (USP) that will attract guests. 
• Differentiate yourself from competitors . How will your guests perceive the value of staying at your hotel compared to other options? Are there any new trends in travel that you can capitalize on? Think creatively about improving your current services and making your hotel stand out from the competition. 
• Know thy costs . What is necessary to maintain and run your hotel successfully? What are the most important expenses associated with running a small hotel, and what can you do to reduce them?

Starting a small hotel business can be a great way to make extra money and have your own business. Here are step-by-step instructions on how to get started:

• Choose a location – One of the first things you need to do is decide on a location for your business. You can either start with an existing hotel or find a new location to lease or purchase. 
• Get the necessary permits – Once you’ve chosen a location, you’ll need to get the necessary permits from local authorities. This includes zoning approval, building permits, and fire code certification. 
• Market your business – Once you have all the permits, it’s time to start marketing your small hotel business. First, you’ll need to create a brochure, website, and marketing plan targeting potential customers.
• Get started – Once you’ve finalized your plans, it’s time to start building your small hotel business.

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• One way is to find an existing hotel and purchase it. 
• Another option is to find a franchise opportunity. You can also find an individual investing partner or apply for a small business loan from any bank. 
• And finally, you can start a hotel from scratch using private funding. Whichever route you choose, be prepared for long hours and hard work. But with careful planning and some luck, starting a small hotel can be an enjoyable and lucrative experience.

If you want to get into the hotel business, franchising might be the right option. Franchising offers several benefits, such as stability and predictability in your business. Plus, it can give you access to a large pool of potential customers. However, to start franchising, you’ll need to assess your skills and qualifications. 

First, ensure you have the experience and knowledge to run a successful small hotel business. Next, create a strong business plan and marketing strategy. Finally, find a reputable franchise company to help you set up and manage your business. If you’re ready to get started with franchising, be sure to research different options available in India. Many reputable franchise companies can help you get started.

Running a successful hotel business in India can be a very rewarding experience, provided you do your research and put in the hard work. Here are five tips to help you get started: 

• Get licensed and insured; first and foremost, you’ll need to obtain a license from the government and your state’s licensing authority. Ensure your property is properly insured for fire and liability purposes. 
• Set your prices right while it’s important to be competitive, setting prices too high can drive away customers. Be sure to factor in taxes and other necessary fees into your pricing structure. 
• Build an awesome team in India that prides itself on its teams of competent staff members who can provide top-notch service to its guests. Hire people who share your vision and are committed to making your business successful. 
• Invest in Property and Equipment To run a successful hotel business in India, you’ll need to make significant investments. Purchase an up-to-date property that meets the standards set by local authorities, and invest in the latest equipment and technology to improve efficiency and guest service.

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In a small hotel business in India, the profit margin can be quite high due to the low labor cost. However, several expenses also need to be considered, such as rental costs for the premises, electricity and water bills, and depreciation on fixtures and equipment. Therefore, to maximize profits, it is important to carefully plan and budget for these costs and find ways to reduce operating costs.

In India, taxes/GST applies to all business activities, including those in the hospitality sector. The GST is a nationwide tax levied at the rate of 18%. All hotel establishments with an annual occupancy of more than five rooms are considered small businesses and, therefore, subject to GST regulations. The GST registration process for hotels is straightforward and requires only a registration form and a total annual taxable income declaration.

There is no need to submit any other documentation. However, once registered, the hotel establishment must pay quarterly taxes on its total taxable income. Therefore, it is important to keep accurate records of all transactions within the hotel premises to calculate the taxable income. Hoteliers should also be aware of other tax implications from their business operations. Your charted accountant (CA) is the right source for taking care of income tax filings, GST filings, and other trade-related filings.

In India, the small hotel business is growing quickly. There are many challenges and risks involved in operating a small hotel in this market, but with the right strategy and planning, these businesses can be successful. One of the main challenges facing small hotels in India is competition from larger chains. 

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Many of the larger chains have invested heavily in the Indian market, and they are now well-established businesses with strong networks and economies of scale. These chains can often afford better prices and more convenient amenities than smaller hotels, making it difficult for small hotels to compete. Another challenge facing small hotels in India is finding suitable locations. Many of the best locations are already occupied by large chains or other types of businesses, and it can be difficult to find a location that is both profitable and accessible.

Starting a small hotel business in India can be a rewarding experience if you have the right attitude and the necessary skills. The key to success is to be organized, efficient, and patient. There are many potential pitfalls, but with careful planning and execution, starting a small hotel business can be rewarding. We wish you good luck in your small hotel business in India.

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How to Start a Hotel | From Dreams to Reality

You may think that starting a hotel is an easy business. But in reality, it is not. You must know about the industry, competition and what you will offer to stand out from them. So, if you are looking for how to start a hotel, you must have strong hospitality skills.

If you have that, follow the step-by-step process below and witness your dream of starting a hotel come to reality. 

Step 1 - Research the Hotel Industry

The Indian hospitality industry is growing at a CAGR of 12.02% in FY 2022-2026 and is expected to reach US $10.08 Billion by 2026 .

The factors that are mainly increasing the industry growth are: 

• International tourism
• Growing domestic travel 
• Increase in customers spending power on weekend getaways and vacations

Tips to Research the Hotel Industry 

• Find out what your competitors are doing: What are their prices, amenities, and promotions? What are their strengths and weaknesses? What do customers think about them?
• Determine what people want: Learn what type of amenities guests want in hotels today, as well as how much they're willing to spend for these services.
• Look at trends: Keep an eye on the latest trends in the industry so that you can stay ahead of the curve and be prepared for changes that could affect your business.
• Understand customer preferences: Figure out who your target audience is so that you can design your services accordingly and increase customer satisfaction.

Step 2 - Find a Good Location

Before you start looking for a location, it is important to have a clear idea of what you are looking for.

First, you need to decide on the type of hotel that you want to open. 

For example, if you want to open a resort-style hotel in an area with many tourists or vacationers, your best bet would be somewhere near a beach or other tourist attractions. 

If you want to open an upscale boutique hotel in an urban area, your best bet would be somewhere close to restaurants and nightlife.

The next step is deciding on what kind of location will suit your needs best. For example, the minimum space required to start a hotel is 4000 sq ft - 5000 sq ft .

If you are looking for something with lots of space, perhaps an industrial area would work well for you. 

But if space is not an issue and all that matters is convenience and accessibility, then perhaps living right in the center of town would be best.

Step 3 - Hire an Architect

The next step is hiring an architect. 

Many people start their hotels with a limited budget and think that hiring an architect is a luxury. 

But this is not the case, as architects are the ones who will design your hotel from scratch. 

They will also help you save money by designing your building in such a way that it can be extended in the future without having to demolish it and start again.

The architect's job is to bring your vision to life. 

They will work on every aspect of the hotel from the lobby to the outside facade, from guest rooms to restaurants, pools, gardens and more. And they will do so with creativity and expertise in mind at all times.

For this purpose, you can either look for the local architects in your city or you can find them on Spacerace .

Step 4 - Register your Hotel 

Registering your hotel will not only protect your ownership but will also help you get financing and find tenants.

A registered property is more attractive to potential investors, as they know that the property is a legitimate investment.

Thus, you can register your hotel as follows:

• Private Limited Company Registration  
• One Person Company
• Limited Liability Partnership
• Sole Proprietorship
• Partnership Firm.

The choice of structure will depend on various factors. To make the right choice, get in touch with our expert by filling out the form on your right.

Step 5 - Get Licenses

To start a hotel, you must have all the mandatory licenses specified by the government. 

It will ensure that your hotel operates legally and within regulations set by the government.

Here is a list of licenses to start a hotel in India:

• GST Registration (if required)
• Shop and Establishment Act Registration
• Building Permit
• Fire Safety License
• NOC from Local Police Station
• Bar License (if serving alcohol)

There may also be some other license that differs on the basis of the service you provide or on the basis of your local regulations.

For example, you need an FSSAI license if you are also preparing and serving food in your hotel. But that won't be required if you are collaborating with other food outlets.

Step 6 - Find out Financing Options

One of the most important things to do before starting any business is to make sure that you have enough money in your account to start it. 

It is one of the best ways to ensure that you will not run out of money during the first few months of your business. 

Also, it will help you avoid costly mistakes like overspending on unnecessary expenses or buying more inventory than you need.

Average Cost of Starting a Hotel in India

The cost of starting a hotel in India varies depending on the location, the size of the property and other factors. 

The average cost of starting a hotel in India is:

• Rs. 80 Lacs - Rs. 5 Crores (Small Hotel with 20 - 80 Rooms)
• Rs. 10 Crores - Rs. 50 Crores (Medium Hotel with 100 - 150 Rooms)
• Rs. 100 Crores - Rs. 200 Crores (Luxury Hotel with 200 - 500 Rooms)

Moreover, the amenities you want for your hotel will also affect the cost of starting a hotel in India.

Step 7 - Hire Contractor and Start Construction

The first thing that you need to do is to find out the best contractor you need for the project. 

For this purpose, you can do the following:

• Consulting local real estate agents 
• Ask your architect for a recommendation.
• Find out the contractors of the hotels in your area

After that, you can choose them on the basis of past projects, reviews, and experience in the field.

The next step would be to decide what type of contract you want with this contractor. 

There are two types : fixed or hourly rates . 

Fixed rates are when the contractor is paid a set amount for each day that they work on the project, whereas hourly rates are when the contractor is paid per hour worked on the project.

Once you have appointed a contractor, start with the construction and meanwhile follow the next step.

Step 8 - Hire an Interior Designer

The interior design of the hotel should be a reflection of the services and hospitality offered by it. 

It needs to be aesthetically pleasing, comfortable, and functional. 

A good interior designer can help you in achieving this goal.

For this purpose, first, you will have to select a theme for your hotel.

You can ask your designer and architect to suggest a few themes and look at their portfolios. Also, you can take theme suggestions from Pinterest.

Here are a few famous hotel themes in India:

• Heritage 
• Wooden 

Going with a particular theme will help you with attracting more customers. As people now willingly spend more on hotels and comfort when they are planning a trip.

Moreover, it will also help you with coming up with more effective marketing strategies to approach your potential customers.

Step 9 - Collaborate with Kitchens and Chefs

The kitchen is the heart of any hotel. Kitchens are where all the food is cooked, and chefs are responsible for the quality and taste of the dishes.

The success of a hotel largely depends on its kitchens and chefs. 

The chef sets the tone for a restaurant, which in turn influences how guests perceive both the food and service, as well as how they feel about their overall experience at that location.

You can hire these chefs from:

• Cooking academies
• Job Boards like Naukri.com
• Recruitment agencies
• Reference from family, friends or social sites.

For this purpose, you can ask them to prepare two similar dishes and one of their own speciality. 

After that, judge them on the basis of taste, ingredients, cooking time and presentation. 

Step 10 - Hire Hotel Staff and Security

A hotel must have the right staff and security. 

Here are some tips on how to find the right people for these positions.

• Get experience: One of the best ways to hire qualified staff is to hire people who already have experience in the hospitality industry. This way they will know what it takes to be a good hotel staff member or security guard.
• Conduct interviews: The next step is conducting interviews with potential employees. You must ask questions that will help you figure out if they are a good fit for your hotel. You should also ask about their availability and salary expectations so you can offer them an appropriate salary package.
• Background check: Once you’ve found someone who seems like a good fit, it’s important to conduct background checks on them to make sure they don’t have any criminal records or other issues that could potentially harm your business.

Step 11 - Set a Price List

Setting a price list is an important task when starting a hotel. But, it is also one of the most difficult.

The prices of the room will depend on the factors such as:

• How many people can it accommodate?
• What are the facilities in the hotel and room (For example, WiFi, TV, Geyser, etc.)?
• What is the view from the room?
• Where is the hotel located?
• Hotel's overall cleanliness.

The prices should be competitive, but not too low.

On the basis of the above factors, divide the room into different categories.

For example, a standard room might cost Rs.1000 per night, while a suite might cost Rs.10,000 per night.

The next step is to decide what services will be offered at each price point and how much they will cost (e.g., in-room breakfast at additional Rs 100).

Step 12 - Advertise your Hotel

Depending on the type of hotel you are running, you will have different ways of advertising it.

For example, a five star hotel will have a different way of advertising than a budget hotel.

There are many ways in which you can advertise your hotel in India, but the most effective ones are:

• Creating a website for your business and marketing it on Google and other search engines.
• Getting listed on travel websites like Tripadvisor.
• Advertising through social media sites such as Facebook and Twitter.
• Creating an online presence with blogs about your business or industry.
• Publishing articles about your business or industry online.
• Create an email list for customers to subscribe to receive updates from the company.

Factors that Make a Hotel Successful

The location of the hotel plays a very vital role in its success. Thus, when you are looking for a location to start a hotel, consider the view, landscape, mobility, mobile networks and land cost . 

Along with it, find out if there are other hotels in the area. Reject the location if it is super crowded with competitors.

Hotels are not just a place to sleep, they are also a place for entertainment and relaxation. 

To attract more customers, hotels need to provide amenities that will keep the customer feeling relaxed and entertained.

Amenities can be anything from a pool or spa to a fitness center or game room. 

The type of amenities offered will depend on the type of clientele that the hotel is trying to attract.

• Cleanliness

A clean hotel creates a perception of quality and care. It also provides an environment that is conducive to relaxation and comfort. 

This in turn leads to higher customer satisfaction, lower turnover rates, and increased revenue.

A clean hotel is more likely to attract more customers and keep them coming back.

Hotels have to be mindful of how they are treating their guests.

The hotel staff is the face of the company, and their behavior reflects on the company's image. 

The way they talk to guests and their attitude towards them can make or break a guest's experience.

A hotel’s guests will be more inclined to stay at a hotel that they feel safe in.

Hotels should make sure that they are maintaining their safety standards and providing security measures to ensure the safety of their guests. 

Also, they must have emergency plans in place and provide first aid kits and emergency exits.

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• Posted On May 26, 2023
• Posted By By Zarana Mehta
• Company law
• Entrepreneurship
• Business Registration in India
• Companies Act 2013
• Hotel Business in India
• How to start a Hotel Business in India

Step by Step guide on “How to start a Hotel Business in India?”

Table of Content

Introductions

Starting and running a hotel business in India necessitates a number of licences and registrations. Many licences and registrations must be obtained prior to opening the hotel and renewed while it is open. Furthermore, most licences require the hotel to follow certain rules or criteria in order to remain valid. As a result, it is critical for hotel entrepreneurs to be aware of these licences and registrations in order to run a successful hotel business. Don’t worry if you are not aware of all this, because This article will cover information on the different licenses required to start a Hotel Business in India, and “How to Start a Hotel Business in India?”

Insights on Hotel Business in India

In India, a hotel is a business that provides lodging, meals, and other visitor services. To be known as a Hotel in India, a foundation must have at least six letting rooms, at least three of which are most likely joined (ensuite) private washroom offices. Despite the fact that lodgings are classified as ‘Star’ (1-Star to 5-Star), there is no standard method for assigning these ratings, and consistency with standard necessities is intended.

Permits required for starting a hotel business in India

Fire safety Permit: A fire safety certificate or permit required by the Fire Department is required for the operation of a hotel. A fire safety certificate is typically issued if the building has implemented proper fire prevention and fire safety measures as required by the applicable fire safety rules and regulations.

Building permit for opening a Hotel Business: The Bureau of Indian Standards created the National Building Code of India to standardise building regulations across the country. All government departments, municipal bodies, and other construction agencies follow the National Building Code. According to the National Building Code, no person shall carry out any development, erect, re-erect, alter, or demolish any building, or cause the same to be done, without first obtaining a separate permit from the Authority for each such development/building. As a result, all hotels must obtain a building permit in accordance with the relevant Town Planning Act, Development Act, Municipal Act, or any other applicable statutes for layout, building plans, water supply, sewerage, drainage, electrification, and so on.

Certificate of Environmental Clearance (CEC): This permit is required by the Ministry of Environment and Forests as part of the Environmental Management Act for a specific type of project. The CEC authority conducts an assessment to rule out any negative environmental impact after completing a questionnaire. The restaurant is responsible not only for its customers’ health but also for the environment. As a result, restaurants must still apply for an Environmental Clearance Certificate.

Police license for hotels: Hotels are public places that the Police Department closely monitors. As a result, all hotels must keep a proper log of all Guests who have stayed at the hotel, follow relevant regulations, and have a valid Police Department permit. The power to licence Places of Public Entertainment held by the Commissioner or Additional Commissioner of Police usually includes a police licence for hotels.

Lift Clearance Permit: If your hotel has multiple levels and you want to operate a lift, you must first obtain permission. The Electrical Inspector issues this licence from the Labour Commissioner’s office after verifying the installation of the lift, structure, safety gear, and other products. State-specific applications are available for receiving lift clearance.

Different types of licenses required to start a Hotel Business in India 

Listed are the different types of Licenses required to start a Hotel Business in India.

FSSAI License: FSSAI License is one of the main licenses required to start a Hotel Business in India, an FSSAI food business licence is required under the Food Safety and Standard Act. The FSSAI food business licence is usually issued for one year and must be renewed at the end of the year. The local FSSAI office manages the FSSAI licence for restaurants. The Central Government does not have jurisdiction over FSSAI licences for restaurants.

Business registration: It is recommended that a hotel be established under an artificial legal entity such as a corporation or LLP. By operating a company under an artificial legal entity, the promoters’ liability for the business is limited, and the business as a going concern is easily transferable to another person.

Provident Fund registration: In India, any establishment that employs more than 20 people must register with the Employee Provident Fund (PF). The PF Board manages a contributory provident fund, a pension scheme, and an insurance scheme for workers in India’s organised sector.

License for a Bar: If the hotel has a bar or serves alcohol in its restaurants, the relevant authorities will require a bar licence. Bar licences are typically issued by departments of the state government. As a result, the requirements for a bar licence differ from state to state.

Registration for GST: Prior to the implementation of GST, a restaurant bill included VAT, services tax, and a service charge. However, indirect taxes collected on the sale and purchase of goods and services in India have been absorbed by the GST Registration Limit regime of indirect taxation from 2019. Restaurants in starred hotels with daily room rates of Rs.7,500 or more will be charged 18% GST and will be eligible for ITC. Hotels with restaurants that charge less than Rs.7,500 per night will be charged 5% GST but will not be eligible for ITC (Input Tax Credit).

ESI (Employee State Insurance) Registration: ESI is an autonomous corporation of the Government of India’s Ministry of Labour and Employment. Employee’s State Insurance (ESI) registration is required in India for companies with ten or more employees. To remain in compliance with the ESI Regulations, the employer must contribute 4.75% of all employees’ wages earning Rs.15, 000 or less toward ESI employer dues. As ESI dues, the employee must contribute 1.75% of his or her wages.

How to start a Hotel Business in India?

Strategy formation: The first step in the process is to develop a business strategy that provides a snapshot of the hotel’s growth strategy for the next five years. This should include foreseeable goals, obstacles, an industry SWOT analysis, and detailed plans for meeting the set goals. In a nutshell, it should be a brief but concise summary that provides a clear outline of the entire business strategy . When you present your business plans to lenders in order to obtain a business loan, the investors and lenders usually go through the first page and decide if they want to read more, so it is also critical to lay out all the critical information up front, such as your market analysis proving the need for a new hotel and your unique skills and qualifications for meeting your objectives.

Marketing your business: Need to plan a marketing strategy that is you need to concentrate on the four P’s will be the product, price, place, and promotion. Product refers to your hotel and its services, price refers to the rates of your products and services, place refers to your hotel’s physical location as well as its website or other booking sites on which it is listed, and promotion refers to your method of attracting customers to not only stay with you once but also to return.

Business Operations: Your day-to-day operations will include booking reservations, checking in and out clients, luggage handling, housekeeping, accounting, and so on, whereas your long-term operations will include how you plan to meet your goals, such as achieving a certain rate of occupancy, adding more restaurants, and other such additional services to attract more visitors.

Management: A strong management team is the backbone of your hotel business because it will not only persuade financiers to invest money in your venture but will also ensure that operations run smoothly.

Financial Planning: Last but not least, consider how you will obtain financing for your hotel venture. Given the potential for growth in the Indian hotel sector, various lenders such as banks, NBFCs, and digital NBFCs are eager to invest in this expanding market.

Hire and Train Employees: Only if the employees play a role in the success of the hotel business in India can it be successful. You will be able to provide quality service to your guests and be an industry leader if you hire top employees at all levels. Many hotels choose to start with executive and departmental positions, which establishes the guidelines and tone. The leaders will then decide what goals they want to see in their teams and how many employees they will need. Every team must determine the roles and abilities they seek in an employee, as well as develop an action plan to find great new employees.

Bottom Line

You now understand how to open a hotel in India and the challenges that come with it. It’s a difficult process that requires a lot of dedication. If you are interested in providing hospitality and are confident in your resource availability, don’t be afraid to move forward.

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Tata Capital > Blog > Loan for Business > How to Start a Hotel Business in India

How to start a hotel business in india.

When the pandemic first hit in 2020, the hotel and tourism space was one of the first industries to be severely hit. However, it slowly regained its lost essence during the two years since then. In 2023, however, this is only poised to move even faster. As domestic tourism and international arrivals pick up, the country is again set to see high activity levels in this space. Furthermore, with the G20 happening across various cities in India throughout the year, the scope of tourism is massive.

This presents an excellent opportunity for people who want to start a hotel business in India. So if you’re thinking of how to get started, we give you tips on building a hotel business plan to begin your journey as a hotelier.

Steps to start a hotel business in India

1. create a long-term strategy.

As a hotel is a traditional business, you must determine a long-term strategy. As initial investments are high and physical assets are involved, such as real estate and furniture, breaking even can take a while. This is why your hotel business plan must be for the next five years.

The five-year plan must include several facets of your hotel operations. They can consist of elements like future goals, barriers to entry, competitor SWOT analysis, and more. This will give you an overview of what you’re trying to accomplish and help you reach out to potential investors or partners who need information.

A reliable long-term strategy sets a strong foundation for your business, while you can make tweaks depending on the current situation or market changes.

2. Dig deep into the analysis

New hotels are popping up daily in different cities in India. This is why it is a good idea to see how well you’re faring. Besides, when competing with massive hotel chains, you need to identify where and how you can make an impact. 

For instance, if there are hotels scheduled to open in your area, you can analyse them to see what audiences they cater to. Would it be a business segment or leisure? Would it be a 3-star property or a 5-star one? By digging deep into analysis, you can better understand your immediate competition. 

Furthermore, this allows you to create backup plans for situations where you’re entirely blocked. Thus, a deep industry analysis should be a part of your hotel business plan. 

3. Know your target market

As every hotel caters to a different market segment, you must also find your target audience. Catering to a more specific audience rather than a generalised one can be beneficial, allowing you to make the most of your investments.

For instance, if you’re targeting a millennial crowd in the domestic market segment, you can identify the services or amenities they look forward to during their stay. For example, high-speed WiFi, sustainable practices, flexible workspaces, etc. By providing personalised experiences to your target market, you have a higher chance of growing your business.

4. Sort your finances

Running a hotel needs a lot of cash in the short term. Therefore, you must be able to manage your finances well. If you’re running short of working capital or need funds to start your hotel, you must look for a trustable source.

5. Recruit wisely

Your workforce is the leading driver of your business. Thus, investing in your people is one of the most significant investments you can make. As your hotel will run 24 hours, you need to account for variable pay, good scheduling, and backup staff.

6. Market your business

You must push your name out in the market as a new brand. For people to know you exist and to find you reliable, you need a solid marketing strategy for your business. 

Traditional marketing involves the marketing mix which covers the different “Ps” of your business. This includes product, price, place, promotion, people, process, and physical evidence. 

For your business, this can be the following:

Product - The hotel you’re marketing

Price - The different pricing segments for your rooms, your food menu, other services, etc.

Place - The location of your hotel

Promotion - The experience you plan on providing 

People - Your target audience 

Process - Your unique value proposition and how you plan on providing services 

Physical Evidence - Speaks about the quality of your experience. For instance, the quality of the rooms you provide 

7. Streamline your operations

Streamlining daily hotel operations like managing reservations, accompanying guests to their rooms, handling checkouts, etc., can help you make these processes and tasks more efficient. It also enables you to reduce operational costs, improve guest experience, and increase profitability. 

A few simple ways to achieve this include using hotel management software to automate tasks, training your staff, monitoring business performance to identify areas of improvement, outsourcing non-core functions, etc. 

Start your hotel business with Tata Capital

Before you plan to start a hotel, creating a step-by-step plan can significantly increase your chances of success. You can grow your hotel to new heights through careful planning and meticulous attention to detail.Tata Capital lets you achieve this dream by taking care of your finances. With fast processing times and attractive interest rates, we are your trusted partner as you embark on this new journey. Apply online for a business loan today.

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How To Start A Hotel Business In India – Business Plans & Opportunity

Hotel business in India is a lucrative business option, as in India tourists inflows are increasing day by day due to the prime attractions here and diverse culture. Hence, hotel business can be one of the profitable businesses to start.

Here is some guidance before you start with your hotel business in India.

Type and Location

Before you actually begin with, it is necessary to decide on the type of hotel that you are going to establish. It can be a catering business or a hotel with lodging facilities etc or a small restaurant. Another important factor is the location of the hotel. While choosing the location, it would be ideal to start in a tourist hub or a commercial location like Mumbai, Delhi, Kerala, Bangalore or any hill stations etc.

Hotel Logistics

To make your hotel business successful, a vital aspect is to have proper infrastructural and transport facilities to the hotel. It should be easy for the people to reach the hotel easily. A hotel can be thus near to a railway station, a bus stand, shopping malls, airports etc. The best thing is that more people will get attracted to your hotel in these areas, in turn giving you huge revenue.

Hotel Area Plan

Determining hotel area is completely depended on the size of your hotel. If you are planning for a midsized hotel of 80-100 rooms, then the approximate area required would be 10000-50000 square feet. For a Five-star hotel with more than 100 rooms, you can go ahead with around 100,000 square feet.

Hotel Layout Plan

For planning the layout of your hotel, you can seek professional help from interior designers who can provide you with good attractive plan within your budget. They can even help you with beautiful layouts that will attract more tourists. For getting in touch with the professional interior designers, you can look in the internet and through advertisements.

Financing Your Hotel

If the financial assistance is required, in India you can avail business loan from many private and nationalized banks. Normally, the 30% of the loan amount will have to be arranged by you and the remaining 70% will be provided to you by banks. You need to decide on hotel budget well in advance before approaching the bank. The banks will check your credibility and liabilities before granting the loan.

Market Surveys For Feasibility Study

It is essential to know the scope of your hotel business in the particular area where you are planning to start the hotel. Hence, you have to conduct a market survey within 10kms of the hotel location. This will help you to know whether it will be profitable in starting the hotel in that location. If there is any competition from similar hotels, you can create a business plan with unique facilities and features to offer for the customers. If you have something new and unique to offer, it will attract more customers to your hotel than your competitor hotels.

Hotel License

When you decided to start the hotel, the next step is to go ahead with the hotel license. If you are planning for a bar/liquor facility within the hotel, you need to get a license for the same. You also need to get Pollution Control Board license. If you also think of conducting events within the hotel premises, a separate license is essential. Proper verification is mandatory from concerned officials regarding the fire safety, elevator functions etc. Below are the list of required license for running a hotel in India.

• Food Safety License – You will get from FSSAI (Food Safety And Standard Authority Of India)
• Health/Trade License – This license can be obtained from Local Civil Authority in your area.
• Eating House License – This license can be obtained from Licensing Police Commissioner of your city.
• Liquor License – If you are planning for a bar/liquor facility within the hotel then you need this license from local Excise Commissioner in your city.
• Fire Department License – This can be obtained from fire department in your area.

Recruitment of Staffs

Depends upon the size and need of the hotel, the staffs are to be recruited. They include front office staffs, housekeeping, line managers, supervisors, waiters etc. You can recruit people through placement agencies or through direct advertisements in media.

Hotel Rating and Promotion

You have to get ratings for your hotel from Indian Tourism Board while you start. The normal ratings can be 1-, 2-, 3-, 4-,5-. Promoting your hotel will increase the revenue. Hence, you have to see every possibility to promote your hotel both within India and abroad.

What else you think can make your hotel business profitable? Would you like to share any tips here?

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3 Star Hotel Classification – List Of Required Facilities and Services

Facilities and service required for 3 start hotel classification.

3 Star Hotels are an important component of the tourism product. And they contribute to the overall tourism experience through the standards of facilities and services offered by them.

Below mentioned list of facilities and service provide the required standards of getting a 3 Star classification / 3 Star Certificate for your hotel.

General Facilities For 3 Star Hotel:

• Full-time operation 7 days a week in season.
• Establishment to have all necessary trading licenses.
• Establishment to have public liability insurance.
• 24 hr. lifts for buildings higher than ground plus two floors.
• Bedrooms, Bathroom, Public areas and kitchen fully serviced daily.
• All floor surfaces clean and in good shape.
• Floors can be of any surface or materials.
• Power backup or Diesel Generator – DG sets.

Guest Room Facilities For 3 Star Hotel

• Minimum 10 lettable rooms, all rooms with outside windows / Ventilation.
• Minimum size of bedroom excluding bathroom in 130 sq. ft
• Air-conditioning should be done on 50% of Rooms
• A clean change of bed and bath linen daily & between check-in.
• Minimum bed width for a single 90 cm and double 180 cm.
• Mattress minimum 10 cm thickness.
• Minimum bedding 2 sheets, pillow & case, blanket, mattress protector/bed cover.
• 3 Star hotels shall provide a hairdryer facility on request.
• Minibar / Fridge – the items kept in minibar should conform to local laws.
• Drinking water minimum one tumbler per guest with Glass.
• All category hotels to provide two sealed bottles of branded bottled water of a minimum 300 ml. per person per day on a complimentary basis.
• Clean and good quality linen should be provided to the guest.
• Shelves /drawer space for 3 start hotel.
• Wardrobe with a minimum of 3 clothes hangers per bedding.
• Sufficient lighting, 1 per bed
• A 3amp earthed socket power near bedside and USB charger.
• A bedside table and drawer.
• TV – cable or satellite channels if available.
• A writing table or surface with sufficient lighting.
• A wastepaper basket in the room.
• Opaque curtains or screening at all windows.
• A mirror at least half-length (3”).
• A stationary folder and containing stationery.
• A ‘do not disturb’ notice.
• A clean my room notice.
• Night spread/bedcover.
• Energy-saving lighting.
• Linen Room or Wardrobe well ventilated.
• Telephone with direct dialling and intercom.

Required Bathroom Facilities For 3 Star Hotel

• All rooms should be with attached bathrooms.
• Minimum size of bathroom in square feet is 36 SQF.
• Minimum of 1 Bath Towel and 1 Hand towel to be provided per guest.
• Bath Mat to be provided.
• New guest toiletries to be provided with a minimum of 1 new soap per guest
• Bottled toiletry products to be provided on required not mandatory.
• Clothes hooks in each bath/shower room.
• A sanitary bin with cover to be provided.
• Each western WC toilet to have a seat with lid and toilet paper.
• 3 Star hotels shall provide water sprays or bidets or washlets or other modern water-based post-toilet-paper hygiene facilities.
• Floors and walls to have non-porous surfaces.
• Hot and cold running water available 24 hours.
• Shower cabin or shower cubical or Bathtubs with shower curtains.
• Water-saving taps and showers to be installed.
• Energy-saving lighting to be installed in the bathroom.

Public Area Facilities For 3 Star Hotel

• 24X7 Reception facility.
• Availability of Room, F & B and other packages/tariff.
• Heating and cooling to be provided in public areas.
• Lounge or seating area in the lobby
• Public restrooms for ladies and gents with soap and clean towels.
• Washbasin with running hot and cold water, a mirror, a sanitary bin with a lid in unisex & ladies toilet.

Room And Other Facilities For The Differently Abled Guest

• At least one room for the differently-abled guest
• Bathroom with facilities for the differently-abled guest.
• Ramps with anti-slip floors at the entrance.
• Minimum door width should be one meter to allow wheelchair access.
• Public Restrooms should have facilities for the differently-abled guest.

Food and Beverage Facilities for 3 Star Classification.

• One Restaurant minimum which servers all meals.
• Crockery & Glassware to be used in all the dining areas.
• Cutlery to be at least stainless steel or preferably EPNS (Electro Plated Nickel Silver).
• Good quality metal cutlery to be used and aluminium cutlery prohibited.
• Plasticware accepted only in the pool area.

Required Kitchen Facilities for 3 Star Classification.

• Refrigerator with deep freezer.
• Segregated storage of Meat, fish and vegetables.
• Colour-coded synthetic chopping boards.
• Tiled walls non slip floors.
• Head covering for all kitchen and f&b production staff.
• Daily germicidal cleaning of floors.
• Good quality cooking vessels/utensils.
• Use of aluminium vessels prohibited except for bakery
• All food-grade equipment containers to be used.
• Drinking water to be treated with UV + filtration.
• Good Ventilation system to be available.
• Garbage to be segregated – wet and dry.
• Wet garbage area to be air-conditioned.
• Receiving areas and stores to be clean and distinct from the garbage area.
• Every six-month medical checks to be done for the F&B production staff.
• First-aid training for all kitchen staff.
• Pest control to be done at regular intervals.

Required Staff Qualifications, Skills and staff welfare for 3 Star Classification.

• Staff uniforms for the front of the house.
• English speaking front office staff.
• Percentage of supervisory staff should be 30%.
• Percentage of Skilled staff should be 30%.
• Uniforms to be clean and in good condition
• Have formally qualified Heads of Departments.
• Supervisory or skilled staff may have training or skill certification.
• Degree/diploma from reputed Hospitality Schools or Universities.
• Staff Rest Rooms – Separate for male and female employees with bunk beds, well lighted and ventilated.
• Staff Locker Room – Full-length mirror, hand dryer with liquid soap dispenser.
• Toilet facilities.

Guest Facilities for 3 Star Classification.

• Provision of a wheelchair for the differently-abled guest.
• Valet (parking) services to be available.
• Dry- cleaning/laundry could be outsourced (In-house facility is not mandatory).
• Paid transportation on call.
• Ice (from drinking water) on demand.
• Acceptance of common credit cards and facility/infrastructure for accepting/ making payments by digital transactions.
• Assistance with luggage on request.
• A public telephone on-premises.
• Unit charges made known to the guest for the public calls.
• Wake-up call service on request (Both Automated and Manual by the Operators.)
• Messages for guests to be recorded and delivered.
• Name Address and telephone numbers of doctors with the front desk (Doctor on Call services)
• Stamps and mailing facilities.
• Newspapers nor mandatory in rooms but can be made available in public areas like lobby or lounge.
• Access to travel desk facilities.
• Left luggage facilities.
• Provision for emergency supplies like medicines, toiletries, first aid kit.
• Provide at least two multi-purpose sockets.
• A telephone for incoming & outgoing calls in the room.
• PC / Business centre available for guest use with internet access.
• E-mail service.
• Wifi internet access not mandatory.
• Fax, photocopy and printing Services.
• Parking Facilities.

Safety and Security Facilities for 3 Star Classification.

• Metal detectors (door frame or handheld).
• CCTV at strategic locations.
• X-Ray Machine at the guest entrance for screening of baggage.
• Manual checks may be conducted for staff and suppliers at designated entry points.
• Underbelly, scanners to screen vehicles.
• Verification of guest with Valid ID, Passport, Visa etc. during check-in.
• Staff trained in fire fighting Drill.
• Security arrangements for all hotel entrances.
• Each bedroom door fitted with lock and key, viewport/peephole & internal securing device.
• All hotels should conduct a verification of their staff and suppliers by the Police
• / private security agencies.
• A safety chain/wishbone latch or viewport/peephole.
• Smoke Detectors.
• Fire and Emergency Procedure notices and exit plan displayed in the room behind the door.
• Fire and emergency alarms should have visual & audible signals.
• First aid kit with over the counter medicines with the front desk.
• Fire Exit signs on guest floors with emergency/backup power.
• Conduct periodic fire drills and maintain manuals for Disaster Management, First Aid and Fire Safety.
• Quarterly Fire and Safety drills as per Law.

Other facilities and requirements.

• Rainwater harvesting.
• Waste management.
• Pollution control methods for air, water and light.
• Introduction of non-CFC equipment for refrigeration and air conditioning and other Eco-Friendly measures and initiatives.
• Solar power panels.

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Hotel industry in India - statistics & facts

What makes the hotel market in india thrive, impact from the domestic tourism boost, sustainability & luxurious travel, key insights.

Detailed statistics

Number of classified star hotels India 2023, by category

Occupancy rate in hotels in India FY 2001-2024

Popular destinations for domestic luxury travelers in India 2020

Editor’s Picks Current statistics on this topic

Travel, Tourism & Hospitality

Travel market distribution in India FY 2018-2027, by type

Distribution of hotel market in India FY 2018-2027, by type

Further recommended statistics

Global overview.

• Premium Statistic Revenue of travel and tourism market in selected countries worldwide 2023
• Premium Statistic Global hotel and resort industry market size worldwide 2013-2023
• Premium Statistic Countries planning the largest number of business events and trade fairs 2023
• Basic Statistic Leading hotel brands in the world 2022, by traveler ratings

Revenue of travel and tourism market in selected countries worldwide 2023

Travel and tourism market revenue in selected countries worldwide in 2023 (in billion U.S. dollars)

Global hotel and resort industry market size worldwide 2013-2023

Market size of the hotel and resort industry worldwide from 2013 to 2022, with a forecast for 2023 (in trillion U.S. dollars)

Countries planning the largest number of business events and trade fairs 2023

Leading host countries for conferences and trade shows planned worldwide as of August 2023, by number of events

Leading hotel brands in the world 2022, by traveler ratings

Best-rated hotel brands worldwide in 2022, based on traveler scores

Indian hotel market

• Premium Statistic Travel market distribution in India FY 2018-2027, by type
• Premium Statistic Value of hotel market in India FY 2018-2027
• Premium Statistic Distribution of hotel market in India FY 2018-2027, by type
• Premium Statistic Distribution of the hotel market in India FY 2018-2027, by booking channel

Distribution of Indian travel market from financial year 2018 to 2020, with an estimate for 2027, by type

Value of hotel market in India FY 2018-2027

Value of hotel market in India from financial year 2018 to 2020, with an estimate for 2027 (in billion U.S. dollars)

Distribution of the hotel market across India from financial year 2018 to 2020, with an estimate for 2027, by type

Distribution of the hotel market in India FY 2018-2027, by booking channel

Distribution of the hotel market across India from financial year 2018 to 2020, with an estimate for 2027, by booking channel

Key indicators

• Premium Statistic Number of approved hotels in India 2022, by category
• Basic Statistic Occupancy rate in hotels in India FY 2001-2024
• Premium Statistic Number of hotel rooms in India FY 2001-2023
• Basic Statistic Average daily rate of hotels in India FY 2016-2023

Number of approved hotels in India 2022, by category

Number of approved hotels in India in 2022, by category

Occupancy rate in hotels in India from financial year 2001 to 2023, with estimates of 2024

Number of hotel rooms in India FY 2001-2023

Number of hotel rooms across India from financial year 2001 to 2023, with an estimate until 2027 (in 1,000s)

Average daily rate of hotels in India FY 2016-2023

Average daily rate of hotels across India from financial year 2016 to 2023 (in Indian rupees)

Regional breakdown

• Premium Statistic Hotel occupancy rate in India FY 2023, by major cities
• Premium Statistic Average rate of Indian hotel rooms FY 2023, by city
• Premium Statistic Revenue per available hotel room across Mumbai in India FY 2010-2023
• Premium Statistic Revenue per available hotel room across New Delhi in India 2010-2023
• Premium Statistic Revenue per available hotel room across Hyderabad in India FY 2010-2023

Hotel occupancy rate in India FY 2023, by major cities

Hotel occupancy rate in India in the financial year 2023, by major cities

Average rate of Indian hotel rooms FY 2023, by city

Average daily rate (ADR) of hotel rooms across Indian cities in financial year 2023 (in Indian rupees)

Revenue per available hotel room across Mumbai in India FY 2010-2023

Revenue per available hotel room across Mumbai in India from financial year 2010 to 2023 (in 1,000 Indian rupees)

Revenue per available hotel room across New Delhi in India 2010-2023

Revenue per available hotel room across New Delhi in India from financial year 2010 to 2023 (in 1,000 Indian rupees)*

Revenue per available hotel room across Hyderabad in India FY 2010-2023

Revenue per available hotel room across Hyderabad in India from financial year 2010 to 2023 (in 1,000 Indian rupees)

Key players

• Basic Statistic Leading hotel and restaurant companies in India 2023, by market capitalization
• Premium Statistic Indian Hotels Company Limited's revenue FY 2016-2023
• Premium Statistic Consolidated revenue of EIH in India FY 2018-2023
• Premium Statistic Number of keys in Chalet Hotels in India 2022, by hotel
• Premium Statistic Number of Lemon Tree Hotels in India 2023, by brand

Leading hotel and restaurant companies in India 2023, by market capitalization

Leading hotel and restaurant companies in India as of 2023, based on market capitalization (in billion Indian rupees)

Indian Hotels Company Limited's revenue FY 2016-2023

Revenue of Indian Hotels Company Limited from financial year 2016 to 2023 (in billion Indian rupees)

Consolidated revenue of EIH in India FY 2018-2023

Consolidated revenue of East India Hotels (EIH) in India from financial year 2018 to 2023 (in billion Indian rupees)

Number of keys in Chalet Hotels in India 2022, by hotel

Number of keys in Chalet Hotels in India in 2022, by hotel

Number of Lemon Tree Hotels in India 2023, by brand

Number of Lemon Tree Hotels Limited (LTHL) across India in 2023, by brand

Emerging players

• Premium Statistic PE/VC investment deals in travel and hospitality 2013-2022
• Premium Statistic Value of M&A deals in the travel and hospitality India 2014-2021
• Premium Statistic Value of PE/VC deals in the travel and hospitality sector India 2022, by company
• Premium Statistic Revenue of OYO across India FY 2019-2023

PE/VC investment deals in travel and hospitality 2013-2022

Number of private equity and venture capital deals in the travel and hospitality sector in India from 2013 to 2022

Value of M&A deals in the travel and hospitality India 2014-2021

Value of mergers and acquisition deals in the travel and hospitality sector in India from 2014 to 2021 (in million U.S. dollars)

Value of PE/VC deals in the travel and hospitality sector India 2022, by company

Value of private equity and venture capital deals in travel and hospitality sector in India in 2022, by leading company (in million U.S. dollars)

Revenue of OYO across India FY 2019-2023

Revenue of OYO across India from financial year 2019 to 2023 (in billion Indian rupees)

Further reports

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Major hospitality brands launch three new luxury hotels in India

Radisson, hilton group and fairmont hotels & resorts have announced hospitality foray in various parts of india.

• Updated Apr 14, 2023, 7:33 PM IST

With the Indian hospitality sector recovering post Covid, the last couple of days have seen announcements for major hospitality brands making a foray into the country. Leading the brigade is Hilton Group’s luxury brand Waldorf Astoria Hotels and Resort. Hilton and the Dangayach Group announced the signing of a branding and management agreement for the launch of Waldorf Astoria Jaipur. The signing ceremony was held at the Hotel Investment Conference South Asia (HICSA) in Bangalore on Wednesday.

Waldorf Astoria is comprised of a portfolio of more than 30 iconic properties across the globe. The timeless luxury brand continues its momentum to strategically expand its presence with a robust pipeline of 27 properties.

Spanning 22 acres overlooking the Aravalli Hills, Waldorf Astoria Jaipur will have 51 expansive pool villas and 174 guest rooms. It will also feature a luxurious spa, an outdoor swimming pool, a state-of-the-art fitness centre, and five distinctive dining experiences, including the Peacock Alley, the iconic lounge and bar synonymous with the Waldorf Astoria brand.

“The launch of Waldorf Astoria in India marks a significant milestone in the growth of our portfolio in the country. With the Conrad, Hilton, DoubleTree by Hilton, Hilton Garden Inn, and Hampton by Hilton brands already present, this debut will be a springboard for Hilton’s continued expansion across the Indian sub-continent,” said Alan Watts, President, Asia Pacific, Hilton.

Waldorf Astoria Jaipur will join Hilton’s existing portfolio of 24 operating and 13 pipeline hotels and resorts across India. The addition of the Waldorf Astoria brand in India brings Hilton’s portfolio of brands across the country to six.

Another significant announcement was the signing of Fairmont Hotels & Resorts new property in Agra. Set to open by 2025, the hotel will offer 205 rooms, including 44 suites. Fairmont Hotels & Resorts has partnered with Shekhar Resorts Limited, introducing the first Fairmont in the city of Agra.

Fairmont is one of Accor’s leading luxury brands globally, with more than a century of history, and landmark hotels positioned in various destinations worldwide – from The Plaza in New York City and The Savoy in London to Fairmont Peace Hotel in Shanghai and Fairmont Royal Palm in Marrakech. In India, Fairmont already operates the Fairmont Jaipur and will open additional hotels in Udaipur, Mumbai and Shimla over the next two years.

Mark Willis, CEO of Fairmont Hotels & Resorts said: “Fairmont is gaining momentum in India, with four exciting new properties under development. With Agra on the horizon, the brand will complete India's northern Golden Triangle, alongside Jaipur and Udaipur.”

Radisson Hotel Group also announced the launch of its luxury lifestyle brand Radisson Collection in India on Wednesday with the signing of the first hotel in Hyderabad. The company said the 300-room hotel is close to the city’s financial district that houses business centers, IT Parks, and Special Economic Zones (SEZs). The hotel would be operational by Q2 of 2026.

Since its global launch in 2018, Radisson Collection has seen an upward growth trajectory with currently over 50 hotels in locations across the UK, Germany, Spain, Italy and Turkey.

Watch:  IPL 2023 Kolkata Knight Riders (KKR) vs Sunrisers Hyderabad (SRH): Total points, Key players to watch in today’s match

• #Hilton Group and Fairmont Hotels & Resorts

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Top Upcoming Hospitality Projects in India

The Indian hospitality industry has been growing rapidly in recent years, with the demand for high-quality accommodations and dining experiences on the rise. As a result, the hospitality sector is currently witnessing several upcoming projects in India that aim to cater to this increasing demand. The construction industry is a crucial player in these projects, as they work towards creating world-class facilities and infrastructure for these hospitality ventures.  Biltrax Construction Data has identified and is tracking over 285 hospitality projects across India. These projects have a combined expected built-up area of 96.84 Million SqFt and are estimated to cost INR 36,077 crore in construction value.

In this article, we will take a closer look at some of the top upcoming hospitality projects in India and how they are shaping the construction industry.

1. Deltin Town, Dhargalim, Goa

The Goa State Environment Appraisal Committee has granted terms of reference to Delta Corp for its integrated resort-cum-casino township project in Dhargalim, Goa. The committee has asked the company to conduct an environment impact assessment study and submit details of each building, land environment, and socio-economic implications of the project. Delta Corp has also been told to use renewable energy, prepare a disaster management plan, and submit data on trees to be felled for the project. The project is expected to be completed by 2027 and will include hotels, convention centres, retail areas, a water park, and banquet facilities. The proposed hotel project is expected to be constructed at the cost of INR 1,765 crore.

2. Prestige DB Marriott Marquis, New Delhi

In 2009, DB Realty acquired the development rights on a 7.7-acre piece of land in Aerocity, located near Indira Gandhi International Airport. A decade later, in 2019, DB Realty signed an agreement with Prestige Group and Marriott International to develop two high-end hotels on the property. The hotels were named Marriott Marquis and St. Regis, and the construction involved building six basements, a ground floor, and seven upper floors. The construction cost for this project was reported to be approximately INR 1,253 crore.

3. Hotel Complex & Convention Centre, New Delhi

The DIAL Aero City in Delhi is set to host one of India’s grandest hotels and convention centres. In 2009, DB Realty secured the 7.7-acre plot from Delhi International Airport (DIAL) through an auction for INR 400 crore. The upcoming hotel is slated to be one of India’s most significant, boasting 932 rooms, office spaces, and a business centre alongside a convention facility with a seating capacity of 20,000. The Hospitality District of Indira Gandhi International Airport in New Delhi will accommodate the development, which will span a total built-up area of approximately 3.5 million SqFt. The total estimated cost of this project is INR 1000 crores.

4. Gaurs Runway Suites, Noida

The Gaurs Group, a renowned developer, is working on a high-rise hotel project named Gaurs Runway Suites in Noida. The tower will consist of four basement levels, a ground floor, and 15 upper floors. The first to eleventh floors will be designated for suites, while the twelfth floor will feature suites and services. Additionally, there will be a twelfth-A floor with suites, a club, an infinity pool, and a landscape party terrace for residents and guests to enjoy. The construction cost for this project was reported to be approximately INR 911 crore.

5. Century Square Phase 2, Bangalore

Century Real Estate Holdings Private Limited is developing a new mixed-use project named Century Square Phase 2 in Byatarayanpura village, Bangalore. The project comprises two blocks, with Block 1 serving as the hotel block and Block 2 serving as the office block. Block 1 will feature 3 basement levels, a ground floor, and 17 upper floors, while Block 2 will have 4 basement levels, a ground floor, and 17 upper floors. The total estimated cost of this project is INR 807 crores.

6. IECC 5 Star Hotel, New Delhi

The India Trade Promotion Organisation (ITPO) and India Tourism Development Corporation Limited (ITDC), both government entities, have collaborated to develop a 5-star resort at the Integrated Exhibition cum Convention Centre (IECC) in New Delhi. The project aims to enhance the tourism sector and will offer a luxurious experience to guests visiting the IECC. The proposed hotel project is expected to be constructed at the cost of INR 700 crore.

7. Chalet Expansion of Renaissance Hotel, Powai, Maharashtra

K Raheja Corp, a well-known developer, is leading the expansion of the Chalet Hotel, in collaboration with private client Chalet Hotels Limited (CHL), at CST no. 71/A, village Paspoli, Saki Vihar Road, Powai. The proposed expansion project will cost INR 602 crores and will include two hotel buildings. Hotel Building No. 3 will comprise Lower Basements, Upper Basement, Mid Upper Basement, Ground Floor, 9 Podiums, and 20 Typical Floors, while Hotel Building No. 4 will have 2 Basements, Ground Floor, 5 Podiums, and 14 Typical Floors. This project aims to expand the star category of the hotel and enhance the guests’ experience at the Chalet Hotel.

8. Fairmont Shrem Hotel, Marol, Maharashtra

The proposed Fairmont Shrem Hotel in Marol, Maharashtra is a project by the Shrem Group’s subsidiary, Shrem Airport Hotels Pvt. Ltd., who are the developers of the project. The hospitality management services for the hotel will be provided by Accor Hotels. The project will cost INR 558 crores and will involve the construction of one hotel building at CTS No. 1405 (part) of Village Marol, Andheri (E), Mumbai. The hotel building will comprise 3 Basements, a Ground Floor, and 11 Upper Floors.

9. Eco-Tourism Resort, Long Island, Andaman and Nicobar

The Eco-Tourism Resort project at Long Island, Andaman & Nicobar Islands involves the construction of a premium island resort at Lalaji Bay. The project is being developed under a Public-Private Partnership model, with a concession period of 75 years, which includes a maximum of 4 years for the construction period from the Appointed Date. The project is estimated to cost INR 391 crores and will feature resort rooms, a flying jetty, and a desalination plant with seawater intake and outfall arrangements with a capacity of 240 KLD. The resort aims to promote eco-tourism in the region while offering a luxurious and sustainable hospitality experience to guests.

10. Chalet Hotel, New Delhi

Chalet Hotels Limited (CHL) is planning to invest INR 350 crores in the development and operation of a five-star deluxe hotel with approximately 350 to 400 rooms at Delhi Airport T3. The aim of the project is to provide hospitality services to travelers at the gates of the International Terminal, making it more convenient and accessible for them.

Biltrax Construction Data is India’s leading construction market intelligence platform and is tracking 23000+ projects on their technology platform for their clients.

Get exclusive access to upcoming projects in India with actionable insights and gain a competitive advantage for your products in the Indian Construction Market.

Visit www.biltrax.com or email us at [email protected] to become a subscriber and generate leads.

The information in this article is extracted using data insights from Biltrax Construction Data’s proprietary platform. The list is based on data that includes architecture firms involved in the design and development of buildings, urban development, industrial, infrastructure, and utilities projects. The data excludes architectural firms involved in interior design projects. 

This article uses feature images that may not be representative of the project; they are merely for illustration purposes.

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THE 10 BEST India 3 Star Hotels

3-star hotels in india, property types, distance from, traveler rating, hotel class.

• Best Value Properties ranked using exclusive Tripadvisor data, including traveler ratings, confirmed availability from our partners, prices, booking popularity and location, as well as personal user preferences and recently viewed hotels.
• Traveler Ranked Highest rated hotels on Tripadvisor, based on traveler reviews.
• Distance to city center See properties located closest to the center first with confirmed availability for your dates from our partners

1. Gokulam Grand Turtle on the Beach

2. Sun Park Resort Manali

3. The Riverview Retreat - Corbett Resort by Leisure Hotels Group

4. Sea Shell Resort & Spa, Havelock

5. Lords Inn Somnath

6. The Residency

7. Sterling Mussoorie

8. Trivik Hotels & Resorts

9. Sterling Corbett

10. Lemon Tree Premier, HITEC City, Hyderabad

11. Club Mahindra Saj Mahabaleshwar Resort

12. Woodrock Hotel

13. Hotel Golden Tree Puri

14. The Fern Brentwood Resort, Mussoorie

15. Sterling Nainital

16. Royal Orchid Resort & Convention Centre

17. Meadows Residency

18. Sinclairs Darjeeling

19. Sterling Wayanad

20. Great Trails Kodaikanal By GRT Hotels

21. Hotel Marigold Jaipur

22. Ibis Gurgaon Golf Course Road

23. Blackberry Hills Munnar - Nature Resort & Spa

24. Uday Suites Garden Hotel

25. The Fern Samali Resort, Dapoli (Ratnagiri)

26. Caspia Hotel New Delhi Shalimar Bagh

27. Fahrenheit Hotels and Resorts

28. Sunvalley Homestay

29. Jharipani Castle

30. Angsana Oasis Spa & Resort

India Hotels Information

• Gokulam Grand Turtle on the Beach
• Sun Park Resort Manali
• The Riverview Retreat - Corbett Resort by Leisure Hotels Group
• Sea Shell Resort & Spa, Havelock
• Lords Inn Somnath
• The Residency
• Sterling Mussoorie
• Trivik Hotels & Resorts
• Sterling Corbett
• Lemon Tree Premier, HITEC City, Hyderabad

₹ 10,000-cr purse" data-reg = "Real estate majors are coming for the hotel industry bearing a ₹ 10,000-cr purse">Real estate majors are coming for the hotel industry bearing a ₹ 10,000-cr purse

Last month, Prestige Estates Projects, a real estate company primarily focused on the southern states, signed an agreement with global hospitality giant Marriott International to manage six of its upcoming hotel projects in India. The Bengaluru-headquartered group set aside a significant budget for these projects: ₹ 4,250 crore, or about $500 million.

A month prior, in March, D B Realty announced plans to de-merge its hospitality division and create a subsidiary called Advent International Ltd that would subsequently be listed on the stock markets. The company recently hired hospitality industry veteran Rahul Pandit to expand its hotels arm to manage assets to the tune of ₹ 2,300 crore.

Property developers with significant hospitality business, such as K Raheja Corp which operates Chalet Hotels Ltd, have earmarked at least ₹ 10,000 crore combined to develop or manage hotels across India over the next 5-7 years, attracted by the  hospitality sector’s rapid growth .

“Globally, yields in asset classes like office or retail are subdued while the quantum of supply that can be added on the lodging front is still pretty high," said Rahul Pandit, the new chief of D B Realty’s hospitality business, who previously led Lemon Tree Hotels and IHCL-operated Ginger. “That is why there is suddenly so much interest in hotel investments."

Hospitality industry giants too are planning significant budgets to capitalise on what industry experts are calling a ‘golden era’ for India’s hotels sector. 

Take, for instance, international hospitality chain Hyatt Hotels Corp. In a recent interview with  Mint , Hyatt’s global president and chief executive Mark Hoplamazian said the company had its  sights set on India’s bustling hospitality industry, particularly on the luxury segment .

Homes to hotels

Mumbai-based developer House of Abhinandan Lodha has outlined plans to invest ₹ 2,000 crore for constructing five luxury hotels in cities known for their spiritual, cultural or tourism attractions—Varanasi, Vrindavan, Amritsar and Shimla. 

House of Abhinandan Lodha has also signed a deal with hospitality giant Leela Palaces, Resorts and Hotels to develop a 5-acre, 100-room luxury hotel in Ayodhya, which is expected to be operational by 2028.

Consumer conglomerate DS Group, which has been in the hospitality business since 2000 and owns five 5-star properties including Holiday Inn Express in Kolkata and Radisson Blu Hotel Guwahati, last year earmarked about ₹ 1,000 crore for its hotels division.

Also read :  India’s hotels sector is seeing wind in its sales

Bamboo Hotel Global Centre (Delhi) Pvt. Ltd, a joint venture between Prestige Hospitality and Marine Drive Hospitality & Realty Pvt Ltd, is set to construct India’s largest integrated hotel complex at Delhi Aerocity. 

As for Bengaluru-based developer K Raheja Corp., its hospitality arm Chalet Hotels in March acquired a Courtyard By Marriott resort for ₹ 315 crore. 

Chalet Hotels’ managing director and chief executive Sanjay Sethi in a recent interview with Mint said the company was looking for  “big-box", or large inventory, hotel assets , and would add about 800 rooms to its ownership portfolio. Chalet Hotels has earmarked ₹ 2,000 crore to reach a total room count to 5,000 in the next three-four years. 

Another Bengaluru-based developer,  Brigade Enterprises , recently signed a deal with global hotel company IHG to develop an Intercontinental Hotel in Hyderabad.

A golden era in hospitality

“The (hotel) sector’s golden era is being driven by high demand juxtaposed with limited supply growth, creating an optimal investment climate," said Mandeep S. Lamba, president, and CEO of South Asia, for hospitality consultancy HVS Anarock.

“Traveller demand over the past two years has provided a strong foundation, allowing hotel companies to not only recover from the pandemic but to achieve their best performance figures in FY23, a trend that should reflect in numbers of FY24."

A recent analysis by HVS Anarock of India’s top 23 listed hotel companies by market capitalization shows these companies experienced a significant turnaround in the 2022-23 financial year, with year-on-year growth rates doubling on average in a post-covid recovery. 

Also read:  Hotel industry market cap tripled since 2019; Jefferies sees momentum continuing

“The financial resurgence is evident in the soaring share prices of hotel companies, which have grown significantly over the past two years compared to their global counterparts," said Lamba.

“This is a testament to the market’s confidence in their recovery strategies and improving industry fundamentals. This is also reflected in successful large-ticket IPOs, such as those by SAMHI Hotels and Apeejay Surrendra Park Hotels."

India’s hotels sector grew at a CAGR (compound annual growth rate) of 8.4% between 2007 and 2023, according to HVS Anarock.

Sustained, stronger growth

As the  Indian hotel industry matures , there is also a shift from scattered capital to more organised institutional funding. Investors in the hospitality sector are becoming more focused, selective, and looking at larger-scale investments. 

This could lead to a consolidation, with big players expanding their portfolios through acquisitions and investments, and major players holding significant sway over standards and market dynamics. India is currently estimated to have about 180,000 branded hotel rooms.

“A lot of these developers always had intent to develop in the (hospitality) sector, but now it is much more structured," said Achin Khanna, managing partner, strategic advisory, for hospitality consultancy Hotelivate. 

“While the bulk of hotel ownership remains with single-asset owners, we do see this formalising more now," he added. “This change is reflective of the place where the hospitality sector in India is at right now, and the cycle is far more sustained and stronger than previous ones."

Also read :  How Mhow, Silvassa and Rewa emerged as hotspots for Indian hotels

The supply of branded hotels, or hotels in the organised sector, increased at a compound annual growth rate of 8.37% between 2007 and 2023, with the most significant growth, of over 10%, seen in Ahmedabad, Bengaluru, Pune and Jaipur, as per data from HVS Anarock.

High demand, higher billings

Even so, demand for hotels is outpacing supply growth in the organised sector, driving up room rates, which also explains the increased interest in the sector.

Revenue per available room, or RevPAR, a key measure of financial performance in the hospitality sector, reached ₹ 4,662-4,940 in 2023, a significant increase of 29-31% from 2022 and 19-21% from the pre-pandemic year of 2019. 

The occupancy rate last year improved by 3-5 percentage points to 63-65%, but short of the pre-pandemic level of 65-67% in 2019. HVS expects India-wide occupancy to improve to 66-67% this year, which coupled with a 6-8% increase in average room rates, will likely push up RevPAR to ₹ 5,281, which would be 31-33% higher than in 2019.

Demand isn’t the only factor attracting developers to invest more in the hotels sector. 

The hospitality business can yield a consistent Ebitda, or operational earnings, of 25-40% from properties established in the right location, presenting an attractive opportunity for sustainable, longer-term growth, said Nikhil Shah, senior director of hospitality, capital markets and investment services at Colliers India. 

The investment management company is currently guiding a few second-generation and emerging hotel owners who are eager to capitalise on the sector’s potential, he said.  

“The landscape of hotel ownership is expected to witness a lot of diversifications in the coming days," added Kiran Andicot, regional vice president for hotel development in South Asia for Marriott International. “Regional and local ownership groups, alongside established players, will play an integral role in shaping the industry's trajectory."

• #Hospitality sector
• #Hospitality stocks

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SOUTHERN COMFORT

S oon you will be able to stay in comfort and eat well if you are travelling on business to industrial hubs across Tamil Nadu. For, where industry goes, hotels follow. National and local hospitality brands are setting up star hotels in tier-2 and tier-3 towns as demand soars.

Industrial hubs such as Krishnagiri, Hosur, Perundurai, Coimbatore and Tuticorin, besides Oragadam-Sriperumbudur near Chennai are seeing a surge in investments by hotel groups.

Fortune Park Hotels Ltd, a wholly owned subsidiary of ITC Ltd, inaugurated a 107-room hotel in Krishnagiri this Jan. “Hosur, by virtue of its location and strong industry base, holds immense business potential and strategic advantages for us,” says Samir M C, managing director Fortune Hotels.

GRT Hotels and Resorts, which has 17 properties across the state, is looking to expand in Tuticorin and set up new facilities in Hosur, Oragadam, and Sriperumbudur. Its deputy managing director T Nataraajan says a slew of projects in automobile, furniture and space sectors, besides development at Tuticorin’s VOC Port, offer tremendous potential to the hospitality sector. “We are looking at adding 100 rooms to our facility at Tuticorin. The scenario all over the state is similar because existing hospitality infrastructure cannot meet demand from business travellers,” he adds.

The national integrated database of hospitality industry (NIDHI) under the Union tourism ministry states there are 8,667 rooms available in 263 one to five star hotels, heritage hotels and bed and breakfast homestays categorised as gold and silver. This apart, there are nearly 1.6 lakh unclassified rooms in 2,329 units. Unclassified accommodation includes lodges, hotels that are not categorised, tented accommodation, house boats, farm stays, apartment hotels and tourist homes.

Sources in the hospitality sector say there are about 4,000 rooms in the three to five star category in the state. The occupancy rate in star hotels in and around Chennai during peak business period from Tuesday to Thursday has now soared to 90% from an average 65% in 2019.

Bengaluru-headquartered real estate developer Brigade Group in Feb signed a 45-year lease to build a 250-room resort on East Coast Road (ECR) close to Chennai and Mamallapuram. “The industrial boom in Tamil Nadu is influencing our expansion plans. As the state experiences economic growth and increased industrial activities, demand is growing for luxury accommodation and conference facilities,” says Nirupa Shankar, joint managing director, Brigade Group.

Sterling Holiday Resorts, with 724 rooms spread over eight properties in Tamil Nadu, says with the success of its foray into serving business travellers in Madurai, there are plans to expand to Coimbatore, Trichy, Salem and Vellore. “Our strength is in developing new destinations as we did with our existing Tamil Nadu portfolio. Hence, we shall continue to pursue opportunities to build new destinations for different types of leisure travel as well as for business needs,” says Vikram Lalvani, managing director & CEO, Sterling Holiday Resorts.

AAB Residency, hotel vertical of Adyar Ananda Bhavan group, will build three hotels, each with 20-25 luxury rooms, in industrial hubs, including Perundurai in Erode district in 2024-25,” says its managing director K T Srinivasa Raja.

Besides rooms, star hotels aim to offer catering services in industrial hubs to further boost income. For instance, SRM Hotels has redeveloped its hotel at Kattankulathur on Chennai’s outskirts into a 75-room four-star facility. The hotel also offers catering services for the industrial belt of Oragadam, Sriperumbudur and Mahindra World City. “At least 65%-70% of revenue for the hotel will be from food and beverage (F&B) services. Out of this, 40% business would be through catering for industries, corporates and companies in the region,” says Sandeep Bhatnagar, COO SRM Hotels.

At the same time, the hospitality sector is pressing for speedy approvals for hotel projects. GRT’s Nataraajan, who is also honorary secretary of South India Hotels and Restaurants Association, says reclassification of land for commercial purpose outside the Chennai Metropolitan Area takes too long. Single window clearance for hotel projects is essential, he adds.

State industries secretary V Arun Roy says the industries department will facilitate approvals required for construction of major hotels.

For more news like this visit TOI . Get all the Latest News , City News , India News , Business News , and Sports News . For Entertainment News , TV News , and Lifestyle Tips visit Etimes

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How Biden Adopted Trump’s Trade War With China

The president has proposed new barriers to electric vehicles, steel and other goods..

This transcript was created using speech recognition software. While it has been reviewed by human transcribers, it may contain errors. Please review the episode audio before quoting from this transcript and email [email protected] with any questions.

From “The New York Times,” I’m Sabrina Tavernise, and this is “The Daily.”

[MUSIC PLAYING]

Donald Trump upended decades of American policy when he started a trade war with China. Many thought that President Biden would reverse those policies. Instead, he’s stepping them up. Today, my colleague, Jim Tankersley, explains.

It’s Monday, May 13.

Jim, it’s very nice to have you in the studio.

It’s so great to be here, Sabrina. Thank you so much.

So we are going to talk today about something I find very interesting and I know you’ve been following. We’re in the middle of a presidential campaign. You are an economics reporter looking at these two candidates, and you’ve been trying to understand how Trump and Biden are thinking about our number one economic rival, and that is China.

As we know, Trump has been very loud and very clear about his views on China. What about Biden?

Well, no one is going to accuse President Biden of being as loud as former President Trump. But I think he’s actually been fairly clear in a way that might surprise a lot of people about how he sees economic competition with China.

We’re going after China in the wrong way. China is stealing intellectual property. China is conditioning —

And Biden has, kind of surprisingly, sounded a lot, in his own Joe Biden way, like Trump.

They’re not competing. They’re cheating. They’re cheating. And we’ve seen the damage here in America.

He has been very clear that he thinks China is cheating in trade.

The bottom line is I want fair competition with China, not conflict. And we’re in a stronger position to win the economic competition of the 21st century against China or anyone else because we’re investing in America and American workers again. Finally.

And maybe the most surprising thing from a policy perspective is just how much Biden has built on top of the anti-China moves that Trump made and really is the verge of his own sort of trade war with China.

Interesting. So remind us, Jim, what did Trump do when he actually came into office? We, of course, remember Trump really talking about China and banging that drum hard during the campaign, but remind us what he actually did when he came into office.

Yeah, it’s really instructive to start with the campaign, because Trump is talking about China in some very specific ways.

We have a $500 billion deficit, trade deficit, with China. We’re going to turn it around. And we have the cards. Don’t forget —

They’re ripping us off. They’re stealing our jobs.

They’re using our country as a piggy bank to rebuild China, and many other countries are doing the same thing. So we’re losing our good jobs, so many.

The economic context here is the United States has lost a couple of million jobs in what was called the China shock of the early 2000s. And Trump is tapping into that.

But when the Chinese come in, and they want to make great trade deals — and they make the best trade deals, and not anymore. When I’m there, we turn it around, folks. We turn it around. We have —

And what he’s promising as president is that he’s going to bring those jobs back.

I’ll be the greatest jobs president that God ever created. I’ll take them back from China, from Japan.

And not just any jobs, good-paying manufacturing jobs, all of it — clothes, shoes, steel, all of these jobs that have been lost that American workers, particularly in the industrial Midwest, used to do. Trump’s going to bring them back with policy meant to rebalance the trade relationship with China to get a better deal with China.

So he’s saying China is eating our lunch and has been for decades. That’s the reason why factory workers in rural North Carolina don’t have work. It’s those guys. And I’m going to change that.

Right. And he likes to say it’s because our leaders didn’t cut the right deal with them, so I’m going to make a better deal. And to get a better deal, you need leverage. So a year into his presidency, he starts taking steps to amass leverage with China.

And so what does that look like?

Just an hour ago, surrounded by a hand-picked group of steelworkers, President Trump revealed he was not bluffing.

It starts with tariffs. Tariffs are taxes that the government imposes on imports.

Two key global imports into America now face a major new barrier.

Today, I’m defending America’s national security by placing tariffs on foreign imports of steel and aluminum.

And in this case, it’s imports from a lot of different countries, but particularly China.

Let’s take it straight to the White House. The president of the United States announcing new trade tariffs against China. Let’s listen in.

This has been long in the making. You’ve heard —

So Trump starts, in 2018, this series of tariffs that he’s imposing on all sorts of things — washing machines, solar panels, steel, aluminum. I went to Delaware to a lighting store at that time, I remember, where basically everything they sold came from China and was subject to the Trump tariffs, because that’s where lighting was made now.

Interesting.

Hundreds of billions of dollars of Chinese goods now start falling under these Trump tariffs. The Chinese, of course, don’t take this lying down.

China says it is not afraid of a trade war with the US, and it’s fighting back against President Trump with its own tariffs on US goods.

They do their own retaliatory tariffs. Now American exports to China cost more for Chinese consumers. And boom, all of a sudden, we are in the midst of a full-blown trade war between the United States and Beijing.

Right. And that trade war was kind of a shock because for decades, politicians had avoided that kind of policy. It was the consensus of the political class in the United States that there should not be tariffs like that. It should be free trade. And Trump just came in and blew up the consensus.

Yeah. And Sabrina, I may have mentioned this once or 700 times before on this program, but I talk to a lot of economists in my job.

Yeah, it’s weird. I talk to a lot of economists. And in 2018 when this started, there were very, very, very few economists of any political persuasion who thought that imposing all these tariffs were a good idea. Republican economists in particular, this is antithetical to how they think about the world, which is low taxes, free trade. And even Democratic economists who thought they had some problems with the way free trade had been conducted did not think that Trump’s “I’m going to get a better deal” approach was going to work. And so there was a lot of criticism at the time, and a lot of politicians really didn’t like it, a lot of Democrats, many Republicans. And it all added up to just a real, whoa, I don’t think this is going to work.

So that begs the question, did it?

Well, it depends on what you mean by work. Economically, it does not appear to have achieved what Trump wanted. There’s no evidence yet in the best economic research that’s been done on this that enormous amounts of manufacturing jobs came back to the United States because of Trump’s tariffs. There was research, for example, on the tariffs on washing machines. They appear to have helped a couple thousand jobs, manufacturing jobs be created in the United States, but they also raised the price of washing machines for everybody who bought them by enough that each additional job that was created by those tariffs effectively cost consumers, like, $800,000 per job.

There’s like lots of evidence that the sectors Trump was targeting to try to help here, he didn’t. There just wasn’t a lot of employment rebound to the United States. But politically, it really worked. The tariffs were very popular. They had this effect of showing voters in those hollowed-out manufacturing areas that Trump was on their team and that he was fighting for them. Even if they didn’t see the jobs coming back, they felt like he was standing up for them.

So the research suggests this was a savvy political move by Trump. And in the process, it sort of changes the political economic landscape in both parties in the United States.

Right. So Trump made these policies that seemed, for many, many years in the American political system, fringe, isolationist, economically bad, suddenly quite palatable and even desirable to mainstream policymakers.

Yeah. Suddenly getting tough on China is something everyone wants to do across both parties. And so from a political messaging standpoint, being tough on China is now where the mainstream is. But at the same time, there is still big disagreement over whether Trump is getting tough on China in the right way, whether he’s actually being effective at changing the trade relationship with China.

Remember that Trump was imposing these tariffs as a way to get leverage for a better deal with China. Well, he gets a deal of sorts, actually, with the Chinese government, which includes some things about tariffs, and also China agreeing to buy some products from the United States. Trump spins it as this huge win, but nobody else really, including Republicans, acts like Trump has solved the problem that Trump himself has identified. This deal is not enough to make everybody go, well, everything’s great with China now. We can move on to the next thing.

China remains this huge issue. And the question of what is the most effective way to deal with them is still an animating force in politics.

Got it. So politically, huge win, but policy-wise and economically, and fundamentally, the problem of China still very much unresolved.

Absolutely.

So then Biden comes in. What does Biden do? Does he keep the tariffs on?

Biden comes to office, and there remains this real pressure from economists to roll back what they consider to be the ineffective parts of Trump’s trade policy. That includes many of the tariffs. And it’s especially true at a time when almost immediately after Biden takes office, inflation spikes. And so Americans are paying a lot of money for products, and there’s this pressure on Biden, including from inside his administration, to roll back some of the China tariffs to give Americans some relief on prices.

And Biden considers this, but he doesn’t do it. He doesn’t reverse Trump’s tariff policy. In the end, he’s actually building on it.

We’ll be right back.

So Jim, you said that Biden is actually building on Trump’s anti-China policy. What exactly does that look like?

So Biden builds on the Trump China policy in three key ways, but he does it with a really specific goal that I just want you to keep in mind as we talk about all of this, which is that Biden isn’t just trying to beat China on everything. He’s not trying to cut a better deal. Biden is trying to beat China in a specific race to own the clean-energy future.

Clean energy.

Yeah. So keep that in mind, clean energy. And the animating force behind all of the things Biden does with China is that Biden wants to beat China on what he thinks are the jobs of the future, and that’s green technology.

Got it. OK. So what does he do first?

OK. Thing number one — let’s talk about the tariffs. He does not roll them back. And actually, he builds on them. For years, for the most part, he just lets the tariffs be. His administration reviews them. And it’s only now, this week, when his administration is going to actually act on the tariffs. And what they’re going to do is raise some of them. They’re going to raise them on strategic green tech things, like electric vehicles, in order to make them more expensive.

And I think it’s important to know the backdrop here, which is since Biden has taken office, China has started flooding global markets with really low-cost green technologies. Solar panels, electric vehicles are the two really big ones. And Biden’s aides are terrified that those imports are going to wash over the United States and basically wipe out American automakers, solar panel manufacturers, that essentially, if Americans can just buy super-cheap stuff from China, they’re not going to buy it from American factories. Those factories are going to go out of business.

So Biden’s goal of manufacturing jobs in clean energy, China is really threatening that by dumping all these products on the American market.

Exactly. And so what he wants to do is protect those factories with tariffs. And that means increasing the tariffs that Trump put on electric vehicles in hopes that American consumers will find them too expensive to buy.

But doesn’t that go against Biden’s goal of clean energy and things better for the environment? Lots of mass-market electric vehicles into the United States would seem to advance that goal. And here, he’s saying, no, you can’t come in.

Right, because Biden isn’t just trying to reduce emissions at all costs. He wants to reduce emissions while boosting American manufacturing jobs. He doesn’t want China to get a monopoly in these areas. And he’s also, in particular, worried about the politics of lost American manufacturing jobs. So Biden does not want to just let you buy cheaper Chinese technologies, even if that means reducing emissions.

He wants to boost American manufacturing of those things to compete with China, which brings us to our second thing that Biden has done to build on Trump’s China policy, which is that Biden has started to act like the Chinese government in particular areas by showering American manufacturers with subsidies.

I see. So dumping government money into American businesses.

Yes, tax incentives, direct grants. This is a way that China has, in the past decades, built its manufacturing dominance, is with state support for factories. Biden is trying to do that in particular targeted industries, including electric vehicles, solar power, wind power, semiconductors. Biden has passed a bunch of legislation that showers those sectors with incentives and government support in hopes of growing up much faster American industry.

Got it. So basically, Biden is trying to beat China at its own game.

Yeah, he’s essentially using tariffs to build a fortress around American industry so that he can train the troops to fight the clean energy battle with China.

And the troops being American companies.

Yes. It’s like, we’re going to give them protection — protectionist policy — in order to get up to size, get up to strength as an army in this battle for clean energy dominance against the Chinese.

Got it. So he’s trying to build up the fortress. What’s the third thing Biden does? You mentioned three things.

Biden does not want the United States going it alone against China. He’s trying to build an international coalition, wealthy countries and some other emerging countries that are going to take on China and try to stop the Chinese from using their trade playbook to take over all these new emerging industrial markets.

But, Jim, why? What does the US get from bringing our allies into this trade war? Why does the US want that?

Some of this really is about stopping China from gaining access to new markets. It’s like, if you put the low-cost Chinese exports on a boat, and it’s going around the world, looking for a dock to stop and offload the stuff and sell it, Biden wants barriers up at every possible port. And he wants factories in those places that are competing with the Chinese.

And a crucial fact to know here is that the United States and Europe, they are behind China when it comes to clean-energy technology. The Chinese government has invested a lot more than America and Europe in building up its industrial capacity for clean energy. So America and its allies want to deny China dominance of those markets and to build up their own access to them.

And they’re behind, so they’ve got to get going. It’s like they’re in a race, and they’re trailing.

Yeah, it’s an economic race to own these industries, and it’s that global emissions race. They also want to be bringing down fossil-fuel emissions faster than they currently are, and this is their plan.

So I guess, Jim, the question in my mind is, Trump effectively broke the seal, right? He started all of these tariffs. He started this trade war with China. But he did it in this kind of jackhammer, non-targeted way, and it didn’t really work economically. Now Biden is taking it a step further. But the question is, is his effort here going to work?

The answer to whether it’s going to work really depends on what your goals are. And Biden and Trump have very different goals. If Trump wins the White House back, he has made very clear that his goal is to try to rip the United States trade relationship with China even more than he already has. He just wants less trade with China and more stuff of all types made in the United States that used to be made in China. That’s a very difficult goal, but it’s not Biden’s goal.

Biden’s goal is that he wants America to make more stuff in these targeted industries. And there is real skepticism from free-market economists that his industrial policies will work on that, but there’s a lot of enthusiasm for it from a new strain of Democratic economists, in particular, who believe that the only chance Biden has to make that work is by pulling all of these levers, by doing the big subsidies and by putting up the tariffs, that you have to have both the troops training and the wall around them. And if it’s going to work, he has to build on the Trump policies. And so I guess you’re asking, will it work? It may be dependent upon just how far he’s willing to go on the subsidies and the barriers.

There’s a chance of it.

So, Jim, at the highest level, whatever the economic outcome here, it strikes me that these moves by Biden are pretty remarkably different from the policies of the Democratic Party over the decades, really going in the opposite direction. I’m thinking of Bill Clinton and NAFTA in the 1990s. Free trade was the real central mantra of the Democratic Party, really of both parties.

Yeah, and Biden is a real break from Clinton. And Clinton was the one who actually signed the law that really opened up trade with China, and Biden’s a break from that. He’s a break from even President Obama when he was vice president. Biden is doing something different. He’s breaking from that Democratic tradition, and he’s building on what Trump did, but with some throwback elements to it from the Roosevelt administration and the Eisenhower administration. This is this grand American tradition of industrial policy that gave us the space race and the interstate highway system. It’s the idea of using the power of the federal government to build up specific industrial capacities. It was in vogue for a time. It fell out of fashion and was replaced by this idea that the government should get out of the way, and you let the free market drive innovation. And now that industrial policy idea is back in vogue, and Biden is doing it.

So it isn’t just a shift or an evolution. It’s actually a return to big government spending of the ‘30s and the ‘40s and the ‘50s of American industrialism of that era. So what goes around comes around.

Yeah, and it’s a return to that older economic theory with new elements. And it’s in part because of the almost jealousy that American policymakers have of China and the success that it’s had building up its own industrial base. But it also has this political element to it. It’s, in part, animated by the success that Trump had making China an issue with working-class American voters.

You didn’t have to lose your job to China to feel like China was a stand-in for the forces that have taken away good-paying middle-class jobs from American workers who expected those jobs to be there. And so Trump tapped into that. And Biden is trying to tap into that. And the political incentives are pushing every future American president to do more of that. So I think we are going to see even more of this going forward, and that’s why we’re in such an interesting moment right now.

So we’re going to see more fortresses.

More fortresses, more troops, more money.

Jim, thank you.

You’re welcome.

Here’s what else you should know today. Intense fighting between Hamas fighters and Israeli troops raged in parts of Northern Gaza over the weekend, an area where Israel had declared Hamas defeated earlier in the war, only to see the group reconstitute in the power vacuum that was left behind. The persistent lawlessness raised concerns about the future of Gaza among American officials. Secretary of State Antony Blinken said on “Face the Nation” on Sunday that the return of Hamas to the North left him concerned that Israeli victories there would be, quote, “not sustainable,” and said that Israel had not presented the United States with any plan for when the war ends.

And the United Nations aid agency in Gaza said early on Sunday that about 300,000 people had fled from Rafah over the past week, the city in the enclave’s southernmost tip where more than a million displaced Gazans had sought shelter from Israeli bombardments elsewhere. The UN made the announcement hours after the Israeli government issued new evacuation orders in Rafah, deepening fears that the Israeli military was preparing to invade the city despite international warnings.

Today’s episode was produced by Nina Feldman, Carlos Prieto, Sidney Harper, and Luke Vander Ploeg. It was edited by M.J. Davis Lin, Brendan Klinkenberg, and Lisa Chow. Contains original music by Diane Wong, Marion Lozano, and Dan Powell, and was engineered by Alyssa Moxley. Our theme music is by Jim Brunberg and Ben Landsverk of Wonderly.

That’s it for “The Daily.” I’m Sabrina Tavernise. See you tomorrow.

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• May 14, 2024   •   35:20 Voters Want Change. In Our Poll, They See It in Trump.
• May 13, 2024   •   27:46 How Biden Adopted Trump’s Trade War With China
• May 10, 2024   •   27:42 Stormy Daniels Takes the Stand
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Hosted by Sabrina Tavernise

Produced by Nina Feldman ,  Carlos Prieto ,  Sydney Harper and Luke Vander Ploeg

Edited by M.J. Davis Lin ,  Brendan Klinkenberg and Lisa Chow

Original music by Diane Wong ,  Marion Lozano and Dan Powell

Engineered by Alyssa Moxley

Listen and follow The Daily Apple Podcasts | Spotify | Amazon Music | YouTube

Donald Trump upended decades of American policy when he started a trade war with China. Many thought that President Biden would reverse those policies. Instead, he’s stepping them up.

Jim Tankersley, who covers economic policy at the White House, explains.

On today’s episode

Jim Tankersley , who covers economic policy at the White House for The New York Times.

Background reading

Mr. Biden, competing with Mr. Trump to be tough on China , called for steel tariffs last month.

The Biden administration may raise tariffs on electric vehicles from China to 100 percent .

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