17 Tips For Starting And Managing A Hospitality Business Successfully

This post highlights some actionable tips and strategies for successfully starting and Managing a hospitality business.

Do you want to open a hotel or run your restaurant in a better way and trigger growth using the ideas of other award-winning managers?

This post outlines 10 tips for opening a hotel or restaurant successfully. Following these 10 tips are 7 hotel and restaurant management tips to help you succeed in your hospitality business.

Truth be said, good hotel and restaurant management tips aren’t so much a novelty as it’s often portrayed, albeit it requires utmost commitment, diligence, insight and understanding.

This article also includes a lot of hospitality business ideas for entrepreneurs and hotel managers.

So, let’s get started with some management strategies to start a successful hotel business.

 

Starting a Hotel Business? Check These Top Tips

 

 

Here in this section, we have compiled a few tips to help you starting your hotel business successfully to ensure continued profits.

If you are looking to start a hotel business, you are definitely not alone. 

The Hotel industry is expanding at a rapid pace. Hospitality & Tourism industry has been one of the fastest-growing sectors in almost all countries. 

So, hotels are set to grow and that is evident from the growing number of hotel rooms every year. 

 

It is lucrative and tempting but starting a hotel business is like fishing in deep water. 

You need to be extremely careful. Let’s get on with it then.

 

1. Brainstorm for some hospitality business ideas and do the background research

 

This section lists some of the many Business Ideas in the Hospitality sector.

 

Yes, you can look for different kinds of businesses in the hospitality industry.

We have listed a few of the ideas here just for the brainstorming to start.

And please make sure that you are absolutely clear and focused on your desired area of the hospitality business. These hospitality business ideas would certainly give you ample scope to expand your thought process for an entrepreneurial venture in the hospitality industry.

 

  • Start a Hotel business (Hotel or Resort)- Need to have a huge budget.
  • Looking for a trending hospitality business idea- Get into Ecotourism.
  • Car rental is an idea which is popular but is quite competitive now.
  • The boutique hospitality business is trending and appealing to a lot of startup founders.
  • SaaS for hospitality is another trending area to get into for entrepreneurs of hospitality.
  • Lease a food outlet and start a restaurant business- A very popular business ideas these days.
  • Open a Travel website or get into a Travel photography business
  • Start a Hospitality Events company.
  • Invest in a Quick service food outlet- It can cost less than $10,000 to open one in developing countries like India as displayed in the picture by POSist below (in Tier 2 Cities). In developed countries like the USA, the investment can well be in excess of $100,000 and even millions depending on the franchise, location, interiors, land and more.

 

Just to elaborate this further, opening a quick-service McDonald’s in the USA can be quite expensive as displayed by Balancesmb in the infographic below.  That’s over $550,000 of investment.

 

 

 

However, it can be quite a good business idea to experiment with a quick-service restaurant in developing countries.

The below image displays key expenses for opening a quick-service restaurant in India. Have a look!

 

 

You can become an event planner. That’s a business idea close to your heart beating for hospitality.

This option is also closely connected with your major at your hotel school. You must be knowing a bit about events and must have managed a few during your studies.

And that is when your skills come in handy.

You can organize and plan the time of your luxury clients.

 

 

Once you have zeroed in on a perfect and sustainable hospitality business idea it’s time to move on to some research.

It is crucial to start with the correct foundation to ensure the success of your hospitality business.

Proper background research is thus a must.

For your background research on the hospitality industry, it is important to have an in-depth knowledge of the hospitality industry.

If you are planning to open a hotel, do some research on the below key things:

  • How big is the Hotel Market in general?
  • What is the growth of the hotel industry?
  • Is there a demand in the area where you want to open up a hotel?
  • How much is the competition?
  • Which are the key segments of the hotel market and which segment you would target?
  • Are the barriers to entry high or low?
  • Are the other hospitality businesses in the area profitable?

and similar questions.

We have a resource article on Hotel Industry analysis, Segments, statistics and more. We have also done a blog post on the SWOT analysis of the hotel industry. Feel free to check them for any support on the background research.

 


 

 

2. Create a Business and Marketing Plan for your Hotel Business

 

 

Image by- Business Town

 

It is important to be ready with a sound and rounded business plan.

Consider this as one of the most important tips for starting and managing a hospitality business successfully.

Key points to consider in a sound business plan are:

  • Vision and Mission Statements
  • The idea and the Strategy for executing the idea
  • Human Resources
  • A Sound Hospitality Marketing Plan
  • Finances- Expenses and returns (proposed, estimates and projections)
  • Products and services on offer
  • Future projections
  • SWOT analysis

and more depending on the nature of your hospitality business.

There are various Business plan templates, both free and paid, at your disposal on the internet. Just search the desired template on Google and you will be spoilt for choices.

 

3. Check legalities and permits – Hire Hospitality consultants

Opening a hospitality organisation can be a legal nightmare.

Consider the below permit requirements and more for opening a hotel.

  • Fire safety permit
  • Wine and Bar License
  • Business Registrations
  • Tax registrations (VAT, Service Tax, GST etc)
  • Police and Security Licenses
  • Food Quality License
  • Environmental Regulations

and so on.

It would be in your best interest to take the advice of experts in the same.

From finding the right location to checking all regulations, there are hospitality consultants who can take care of everything.

One of our posts lists some of the best hospitality consulting firms in the world. Have a look at them and hire one based on your budget and requirements.

 

4. Financial Analysis and Capital Management

 

The hospitality business can be extremely seasonal and is dependent on a lot of external factors.

Thus, it is crucial to keep tight control of finances and the capital management of hotels.

It is important to have proper financial analysis or feasibility studies in order to start a hotel or restaurant business successfully.

The feasibility study can include but is not limited to the following:

  • Location analysis
  • Projected rates of products and services
  • Occupancy estimates
  • Investment and expenses projections
  • Sales projections
  • Return on Investment projections

 

Capital Management is again a crucial thing to consider to be able to open and run a hospitality business successfully.

Consider the factors below for successfully running a hospitality business.

  • Raw materials required
  • Money trapped in the process
  • Finished supplies
  • Debt collection / credit facilities
  • Cash supplies

 

and more.

 

5. Explore Best locations and Markets

 

This is crucial as you need to get to that sweet spot.

The location has to be decided on the basis of several parameters like competition, the existence of a suitable market, profitable demand of the product and services, cost and return on investment projections, legalities, timelines and more.

 

6. Create a Website and initiate the basic promotion

 

In the current technology era, a business doesn’t exist if it doesn’t have a website.

It is crucial to have a well designed and mobile-friendly website. If you are planning to open a hotel then consider this as the most important management tip to attain and retain competitive advantages.

Check out these stunning hotel website designs to get an idea on how your hospitality business website should look.

 

7. The hiring of Top Management

Once the above 6 steps are completed, it is crucial to have a great management team in place to run the show for you and hire more team members.

 

8. The Pre-opening phase is crucial for hospitality businesses

 

The pre-opening phase is a crucial phase especially in the case of opening of a hotel.

Did you know that a lot of projects fail during the pre-opening? A lot of loss-making ventures perform terribly in terms of executing this crucial phase.

Check out the major failure points in the below infographic (Courtesy- Rategain). This is crucial for all hotel businesses to ensure they don’t get into one of these failure points.

It is not very uncommon for hotel projects to get delayed due to the poor execution of this stage.

 

 

Key areas to focus during the pre-opening phase of a hospitality business are:

 

  • Smooth transition of power between owners and top management
  • Licensing and permits
  • Purchasing/procurement of pieces of equipment, furniture etc.
  • Repair, maintenance of fixtures
  • Recruiting and training of staff
  • Sales and reservation processes to be in place
  • Booking systems, information systems in place
  • Soft launch on the hotel (selected guests)
  • Feedback and advice

and more.

 

9. Press Release and Promotion

 

Once you have the establishment, plan and team sorted, it is important to do three crucial things. The three crucial things are promotion, promotion and promotion. Yes, a rather old analogy but works even today.

Press releases, launch parties, social media influences, advertisements, coupons, paid promotions and more. They are all crucial. It is important to create the right buzz in the market and that too a positive noise among the potential customers.

 

10. Technology in place before the Launch

 

This is again one of the most crucial tips of managing a hospitality business successfully.

Technology can lead a hotel business to make or break situation.

Check out our resource of Top hospitality technology insights for more pointers towards successfully using technology for success in the hospitality industry.

We have further explored in the next section about the support hotels and restaurants can get through technology and other things.

So, let’s move on from the opening phase to the successful running phase of the hospitality business.

 

7 Hotel & Restaurant Management Tips

 

Today’s Tips on Hotel and Restaurant Management 

The contemporary restaurant management tips revolve around managing the staff, the daily operation of the institution, handling complaints and using the web to promote the business.

Managing your hospitality business is effectively is one of the most daunting tasks for management.

The competition is huge and the margin of error is very less.

Thus a well-rounded effort is a key to the successful and effective hotel and restaurant management.

The image by Posist is a good place to start to provide food for thought to all the restaurant managers. Some other effective hotel management tips and strategies follow the image below.

 

 

 

11. Train and Trust your team – Technology holds the key

 

This is probably the most important hospitality management tip for a successful business.

Easy to understand but super difficult to implement, isn’t it?

As perhaps the cornerstone of your establishment, your staff is who will determine how fast your hotel or restaurant grows.

As such, train them regularly because proper training breeds an aura of trust and understanding amongst themselves as well as when interacting with clients.

Training makes them proud of the establishment, which invariably works even when you aren’t there to monitor their performance.

Also, it is not easy to monitor the performance while you engage yourself in daily chores.

Technology is the key here. If you have not embraced it yet, you are risking your venture.

Best tips on hospitality management emanate from technology. Try a few Free Hotel and Restaurant management software to get experience in working with technology.

There are a lot of excellent Apps for the hospitality industry that can get you closer to technology and save a lot of cost for your establishment.

While mutual respect and confidence are expected, it is the same trust that brings along the freedom and ingenuity amongst the staff.

 

 

Image by Water colour Newsletter 

 

You might have felt that you are a lone warrior in a crisis situation.

Trust others to have multiple hands working for you in the most effective manner.

When you show that you believe them, even petty issues that can warrant your attention will be solved swiftly.

However, ensure that you don’t grant them too much trust.

This topic about hiring and training is elaborated in our article on Attracting, hiring and retaining the hospitality talent.

 


 

12. Motivate others to stay motivated

 

Motivation is that extra gas required during extreme situations.

It brings out the best out of the team, especially when it is needed.

Therefore, it’s useful to keep your team happy and motivated, initiate team-building meetings, reward hard work and keep the habit of offering surprise perks.

Moreover, be a leader; sometimes, work as a chef, a secretary or a lobby boy.

This does not only help motivate others but keeps you motivated as well.

There a lot of  Free hotel management games which could help you train your staff as well as motivate them.

Another crucial management tip for a successful hospitality business is to ensure activities like away days, motivational sessions, camps and parties to ensure that everyone stays focused and motivated.

 

13. Check the inventory and Focus on procedure implementation

 

This again is one of the crucial management tips for successful hotel operation. This is even more important for any foodservice establishment.

Being the basis of running the hotel smoothly, all the fundamental aspects must be in unison at all times.

The short-term plans, as well as the long-term ones, will act as the points of reference.

Although flexibility and judiciousness are keys to procedure implementation, everything must be done within your office.

As a smart manager, always check the inventory to keep everything available. It can be for housekeeping, kitchen, landscape, engineering equipment or for the restaurant.

To ease the entire process, make it as simple as possible so that it doesn’t consume much of your time.

Ideally, a full inventory per week and someone who’s responsible for the day-to-day checks is perfect.

If you don’t have a flow chart as yet, have one for your hotel operation management.

The flow chart of the procedure should be made available to everyone in management and the team.

Look for the most visible place in the staff area- staff room ideally to place the chart.

Moreover, it also helps you to stick to rules and regulations.

An example of the flowchart for food administration can be the one recommended by the US Food and Drug site.

 

 

 

Make one around the business model of your hospitality business.

You must have a well-written business plan outlining long term and short term goals, methodology, budget, target market, branding, marketing plan etc.

If you don’t have a structured Business Plan yet, you might need one at the earliest.

As one of the tips on hospitality management, creating a blueprint for the current state of the business and perhaps how you are growing is essential.

The policies may include your management plan and strategic vision.

 

14. Monitor the food quality and the services

 

If your hotel is based in a busy locality, keeping clients satisfied at all times can be daunting.

As a manager, when you spot a problem, relax and work to rectify in the future.

Reacting to it immediately can create problems in the smooth running of the hospitality business.

Needless to add, always ensure that the health and food safety regulations are followed.

This is probably the most important restaurant management tip.

 

 

 

Along with that, employee decency is imperative.

Quality and service are two pillars that you should always concentrate on as a hotelier.

Hospitality is all about service.

Customer service holds the key in the hospitality industry and that must always reverberate within the system of your hotel or any other foodservice establishment.

 

15. Consider using the web for Answers

 

So simple yet one of the top tips for successful hospitality business management. It’s just how selective and effective you are using the world wide web.

We are in the digital age where solutions are found on the internet.

For better management, consider using management tools that are within your realms as well as on the internet.

If you are stuck somewhere just use the web.

Google your issues and you will have hundreds and thousands of solutions. All you need to do is to pick the one that suits you the most.

Best hotel and restaurant management Tips and tricks are available in abundance.

There is an interesting Infographic on POS Sector about restaurant management tips.

There are a lot of other valuable resources should this guide not suffice the need.

Also, use the web to stay ahead in the competition by keeping yourself aware of the latest trends and innovation in hospitality.

 

16. Handle complaints professionally and carefully

 

From being a smart, judicious judge to acting swiftly, always strive to create a harmonious working space for all.

This will help in lesser complaints and happy team.

However, complaints will still find its way to you and in a way is good for the growth of your hospitality business. That too at times there are strange guest complaints that you would need to tackle.

Hoteliers and hospitality professionals seem to have mastered complaint handling skills but following guidelines still help.

Here is a rock-solid restaurant management resource that might help you handle guest complaint better if you are running a food service establishment.

And, this tip comes from the National Restaurant Association that helps over 500,000 restaurant businesses from across the globe.

It wouldn’t be a bad idea to grab a cup of coffee and then going through a few articles of the National Restaurant Association to learn the art of handling guest complaints.

 

17. Don’t forget to create a workable Management Plan

 

This is last but not the least important tip of hospitality management.

It is actually one of the tips that hold the key to your hospitality organisation’s success.

In the spirit of togetherness, give every employee an extra role.

Let everyone be a part of the overall plan. Think about Yield Management, menu, pricing and devise both short-term as well as a long-term business plan.

Let everyone know what’s expected of them so that they are responsible at all times.

A workable management plan would ensure that everyone knows where they fit in the system and what is expected out of them.

 

Winding it all up

 

Effective management is crucial to ensure the continued profitability of your hospitality. We have thus provided top tips for management in this post to gain and retain competitive advantages of your organisation.

Effective Revenue management strategies and best marketing tactics for the hotel business would help ensure business success on a consistent basis.

Use these hospitality management tips to boost your business acumen to skyrocket your current or planned business.

If you find these tips useful, don’t forget to share the post with co-workers and friends of the hospitality industry. Sharing, after all, is caring!