Back in 2017, it was published in Statista that the global accommodation industry was worth over 570 billion US dollars at that time. Although no official figures have come out since then, it isn’t that difficult to estimate that the value has only increased, and quite significantly at that. This conclusion is easy to draw on account of the fact that the size of the travel, tourism and hospitality business as a whole has grown with the astounding speed in the last 2 – 3 years.
What it all means is that right now, it’s truly a perfect time to tap into the accommodation business, and we are going to share three tips with you to help increase your chances of success in that venture.
Importance of Accurate Estimations
Hotels, hostels, motels and the like are all essentially real estate, and real estate in a tourist spot is not going to be cheap. Therefore, the importance of estimations is profound here. To understand the concept we are discussing, go through the following key estimations which must be on point:
- The budget: a minimum and a maximum possible figure for the venture
- The type: Is it going to work better as a hotel/motel/bed & breakfast/inn/hostel/apartment?
- Expected revenue generation and profit margins
- How long should it take roughly to break even?
- Resale value estimations of the property as a backup and future prospect
Most of these and more are also going to be key in forming and executing a proper business plan for your hospitality business, which leads us to the next point.
Finding Investors and a Good Business Plan are Closely Interlinked
A proper business plan is key in making a good impression on potential investors, and in most cases, starting an accommodation business does require a few investors.
After all, in order to put their faith and money in your vision, they must be able to see it as a profitable investment. A few key attributes of a good business plan for the accommodation business are as follows.
- Day-to-day operations structure
- Management structure and key personnel
- Key metrics identification for business funding, revenues, and profit
- Project planning, targets and goals across all sectors, both from micro and macro perspectives
- Customer identification, marketing plans, market analysis, location prospects, etc.
Don’t forget to support your estimations, citing, stats, etc. with graphical representations, wherever possible.
Nothing Beats Quality in the Service Industry
The hospitality business is based on the idea of providing people with a break from the mundaneness of regular life, therefore, it is extremely important that the quality of service in your place is top-notch.
Some of the factors which are key in determining that all-important quality of service in any accommodation business are as follows:
- High quality and easily available room service or concierge service
- A steady supply of hot water, proper room heating and cooling
- Quality food from the kitchen and variety in menus
- Restful, comfortable beds in every room; try using the best memory foam mattress after going through honest reviews
- Beautiful décor to match the overall theme of the place
- Helpful reception desk and reliable security
- Guidance and assistance in exploring the nearby locations
There might be other factors worth considering as well, as long as it stays true to the idea of improving the quality of services provided to the guests.
The experience they have in your place will be reflected back in the form of online reviews, word-of-mouth marketing and return business; all of which are crucial in generating revenue and for building a good reputation in the accommodation business quickly.