Just like any other business, hotels need money to keep ticking. In the stresses of promoting your new establishment and keeping your guests happy at whatever cost, you may begin to lose sight of the finances. It’s, therefore, essential to create an effective business plan for your hotel to ensure you’re hitting the right targets. Below, we’ve put together everything you need to know about starting a hotel business in 2017.

Conduct competitor research

Before you delve into the ins and outs of your new business venture, you should conduct competitor research and ensure that you’re going to be able to make a profit when you open your doors. If there are lots of hotels in your area, you may struggle to compete; if there aren’t many hotels in the area, then ask why – is it because there’s little demand?

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Price accordingly

In today’s cut-throat world where multinational hotel chains such as Travelodge, Premier Inn and Holiday Inn squeeze prices, it’s important that you price your rooms accordingly. Make sure that you look into the prices of other hotels in your area, but cost rooms conservatively so that you can make a healthy profit. You should also consider investing in some hotel management software to manage your hotel online – not only will doing so allow you access to booking sites such as Booking.com and Trip Advisor, but it means that you’ll be able to offer an online payment method so that customers can book on the go.

Think about the offseason

One of the biggest challenges of any hotelier is the offseason – especially when operating in a tourist destination where weather and seasonality play a big role in occupancy rates. When putting together your business plan, you should think about the offseason and how you’ll be able to stay afloat. It may be that you can use your reserves to power through the quiet period, or you may choose to offer discounted rates or group bookings. Alternatively, you could close your hotel during the quieter months of the year so that you don’t have to pay for its upkeep, but this could have a negative impact on your competitiveness.

Show investors how you can make money

If you’re hoping to secure finance for your new hotel or bed and breakfast – perhaps to renovate or purchase a property – then you need to show your investors how you are going to be making money. Alongside the standard room tariffs, you should look for alternative sources of income to increase your chances of being accepted for a loan. Perhaps you could rent out your function room for weddings and corporate events, or you could host themed nights to generate an income from food, drinks and ticket sales. The more ways you can show you’ll be making money, the more likely you are to be approved for finance – and the more money you’re likely to make when your hotel is up and running.