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Hotel Business Plan Guide

Heres how you can write your hotel business plan by answering key questions. For the best
outcome, aim for a succinct, simple, tangible and realistic plan thats simple to read. Follow
these hotel business plan suggestions to build and finalize this documented plan.
Be sure to keep notes on your sources of information and financial assumptions analysis.

1. Executive Summary
Write this part of your hotel business plan last. It should be 1 page maximum and include:

Whats the hotels location, rating, room count, local market and overall feasibility?

Whats your hotel companys mission? This explains the underlying business plan

What hotel product and service offering will be utilized? Whats the concept USPs?

Who will your guests be? How is the market performing? What are the key trends?

What is the 3-5 year forecast (just headline profit and loss figures) and hotel metrics?

If requiring a loan and/or equity, what amount is needed and how will that be used?

What are the milestones and objectives? i.e. Achieve a GOP break-even by time X

2. Company Description
Here your hotel business plan provides further detail about the company and business.

Whats your 1 line mission statement? Explain the businesss guiding principle

Name the specific goals (milestones) and objectives (progress markers to goals)

What are your hotel companys major competitive strengths and competencies?

For operating hotels, whats the summary financial results over the past 5 years?

What background experience, skills and strengths do you bring to the business?

List shareholder breakdowns and legal form of ownership (and why that form?)

3. Concept & USPs


Give a snapshot of the hotel brand concept youre planning. Yes, you need a concept.

What is the hotel product? List the hotels tangible offering, rooms and facilities

What services will be provided? How will the guest service touches be delivered?

Define your Guest Journey Roadmap your hotels end-to-end guest experience

Why will your hotel brand concept be unique and appeal to target hotel guests?

Have you benchmarked competitor hotels? Or for hotel groups, other concepts?

Will you implement proprietary features you can protect by intellectual property?

4. Industry & Market


Analysis of your industry and market is critical for hotel business plan decision making.

How is the industry changing? Short or long term? How does that impact you?

What are the critical political, environment, social and technological influences?

Are there tax advantages, construction moratoriums, grants or benefits available?

For new hotels, what barriers to entry exist? (i.e. capital, awareness, local councils)

Whats the size of your locations tourism market? Annual visitors and room nights?

What is the current supply of hotel rooms? What about other local lodging options?

Breakdown the market. How much supply exists for various hotel star rating levels?

For new hotels, do local demand trends validate a need for the new room supply?

5. Competitive Set
Identify competitors and market segments to validate hotel business plan assumptions.

Who are your direct local or regional competitors? Are there indirect competitors?

What are their advantages, disadvantages, average prices, occupancy and markets?

Tip: Use tourism offices, STR, HotStats and internet research to obtain such details

Use a competitor analysis framework with variables like strengths, weaknesses etc.

Adding a competitor framework to the hotel business plan helps visualize opportunities.

6. Target Guests
Hotel business plans typically include a profile of current and targeted guests markets.

Who are your hotels target guests? Predominantly leisure, business or mixed use?

For each type, what are their demographic, psychographic and socio-economics?

i.e. Inbound, middle-class, leisure focused guests from Spain, Portugal and the UK

Why will they choose your hotel? What USP features and benefits appeal to them?

What other customers exist that you must market to? Distributors and Tour Ops?

7. Marketing
Now add a marketing strategy consistent to your hotel business plan. You need to think
about hotel marketing, your sales (distribution) plan and how you will manage revenue.

Marketing Strategy

Whats the hotel brand position? How will guests recognize and understand you?

For each guest segment, how will you promote, market and sell your hotels offer?

What free and low-cost tactics exist to minimize your hotels marketing expenses?

What media will you use, why and how often? Whats the forecast ROI per media?

What website, search marketing and search engine optimization will be required?

What public relations, events or other offline promotion tactics could be utilized?

Have you factored in extra marketing costs for launching or repositioning a hotel?

How does this compare to competitor hotels? Are you differentiating sufficiently?

Sales and Distribution

How will you sell your hotel rooms and extras? Online, offline, direct, indirect?

What third-party channels will you use and which online travel agents (OTAs)?

Will you build, operate and maintain your own website or phone booking lines?

How many website visits do you need to convert X% of traffic to room bookings?

Have you thought about profitability per channel? How can you maximize yield?

Will you distribute through tourism office bookings or other agent partnerships?

What technology do you need? Online booking engines? Channel Management?

How will you manage availability? You need real-time dynamic update systems.

Does your hotel require conferencing guests? Who will bid on conference RFPs?

Yield & Revenue Mngt

Does your pricing strategy account for research about local and direct competitors?

Are you pricing lower, higher or on-market? What are the pricing point strategies?

What bookings, deposits, cancellations and stay rules or restrictions will you use?

i.e. minimum stays, days closed to arrivals, seasonal shut-downs, closed channels

Will you use refundable or non-refundable price tiers to drive early room bookings?

8. Operations
Proactive operational planning (versus reactive response) helps your hotel business plan.
Explain the daily operation of the hotel, its location, facility, people, service and process.

How will you recruit, train, lead and measure performance of your hotels team?

What specific tasks will each employee action? What roles must you recruit for?

What quality measurement is needed? (Across F&B, Housekeeping, Front Desk,


etc.)

What F&B stores and inventory is needed? When? And where will you source this?

Do you have plans for ongoing and emergency maintenance or engineering work?

Are permits required? What workplace health and safety rules exist? Insurances?

What renovations are planned? Technical specifications? What about FF&E needs?

When is the hotel open? What are the operating hours for facilities and services?

Thats the basics. A thorough hotel business plan appendix might offer operational detail.

9. Management
Investors especially will require CVs and bios. Provide info about the management team.

What organizational structure exists? How will the key people achieve the results?

What background, qualifications or unique expertise do the key players contribute?

Who holds responsibility for specific achievements within the hotel business plan?

Which Directors or Managers are shareholders? Percentages? Are they committed?

10. Financials
Depending on the audience, financial data might appear earlier in hotel business plans.

What is your forecast for key hotel metrics? OCC, ADR, RevPar are important KPIs.

Have you graphed the cashflow? What about 10% up and down sensitivity analysis?

If your hotel business plan is for investors, how much do you need, when and why?

What is the anticipated asset or contract holding period, ROI, IRR and NPV data?

When will investors get equity and profits, or lenders get principal + interest back?

For hotel business plans, a hotel real estate model will help.

11. Project Planning


In the hotel business plan, give a project plan for the opening, turnaround or operation.

What are key milestones? Also subscribe for future posts on project checklists

Site selection? Legals? Development? FF & E installed? Opening event? PR results?

Team recruited? Marketing? Sales targets? Hotel project break-even point timings?

As project milestones are ticked, youre closer to ensuring sustainable hotel profitability.

12. Appendix Extras


Whether the target audience is yourself, hotel investors, banks, lenders or your team, keep
the readers interest by using simple sections. Use graphs, tables and bullet points, plus
avoid paragraphs (like this) wherever possible. Instead, use your hotel business plan
appendix to insert detailed data, sources and specs, and reference it when its required.
Before opening a hotel (and diving in the deep end) or pursuing that hotel repositioning
project, this critical thinking is imperative. You wont regret spending the time (and it
shouldnt take you too long) researching these aspects of hotel strategy, marketing,
technology, operations, financial and investment feasibility. So get started and good luck!