Hotel Business Plan: What it is and How to Write it

A hotel business plan is a detailed and structured document that identifies your hotel business goals, objectives and success strategies. It formulates your business idea and identifies the required investment to execute your vision.

The purpose of a hotel business plan is to be a blueprint guiding you on what you need to accomplish. Writing a hotel business plan requires you to be concise in all sections and do in depth research.

The steps of writing the plan include writing the executive summary, writing the hotel business description, conducting a market and competitive analysis. Business plan service companies offer hotel business plans online. A hotel business plan is 15 to 25 pages long and takes three to four weeks to be written.

What is a Hotel Business Plan?

A hotel business plan is a formal document that provides a roadmap for your hotel business startup project. It is a comprehensive blueprint for running your hotel business covering all the necessary details related to setting up and operating your business.

The business plan for a hotel provides guidance for your actions and decisions as you take the hotel business forward. It outlines your business goals, target market, the products and services that you will offer, marketing strategies and financial projections.

A business plan is a structured summary of your business idea giving you a clear understanding of what you need to do to make your business project a success.

The purpose of a hotel business plan

A hotel business plan helps you work out whether you want to go ahead with your business idea. Through market research and market analysis your plan validates your business idea.

A hotel business plan keeps you on track and accountable to your goals and objectives. It gives potential investors insights into your business idea hence building their confidence that your hotel business startup will be successful.

A structured plan helps you navigate each step from choosing the right location, identifying your market niche and defining the scale of your hotel business operations. A hotel business plan provides a roadmap on what you need to accomplish by identifying milestones for you to reach.

How to Write a Hotel Business Plan

Writing a small hotel business plan is a step by step process that entails including the components of a business plan. Components of a hotel business plan include an executive summary, business description, market analysis, product and service description as well as a competitive analysis.

The steps of writing a business plan inform how the business plan will look.When writing your hotel business plan you need to engage with experts who have the expertise in developing hotels, interior design and architecture. Be realistic and base everything on research and facts. The following are the steps followed when writing a hotel business plan.

Write the Executive Summary

Writing the executive summary entails giving a concise overview of your hotel business vision, mission and goals. The executive summary serves as an introduction to your hotel business plan hence should present a captivating image of your hotel business.

Your mission statement describes the essence of your business as well as the stay experience that your hotel offers. Explain why you are in business and the market needs for your services.Your vision conveys aspirations for the long term while your goals are the objectives that should be met within a certain timeframe.

Write the executive summary as the final stage of your hotel business plan writing process. It should be short, not exceeding two pages. You should write the executive summary in a persuasive and engaging manner.

Write the Hotel Business Description

Writing the business description entails giving information about your hotel concept, services and business structure. Explain the legal structure of your hotel business whether it’s a sole proprietorship, partnership or corporation.

Outline the physical structure in terms of how many rooms and room categories your hotel property will have. Dive into your hotel’s competitive advantage such as excellent pricing or superior customer service. Identifying the uniqueness of your hotel explains why guests would want to stay in your hotel instead of your competitors.

Illustrate your brand identity such as color, design or logo that distinguishes your hotel to consumers. Provide the name of your hotel, its location and a brief history of your business. Outline the goals and objectives of your business as well as the services that you offer making it clear what your hotel will bring to the hospitality industry.

Conduct Hotel Industry and Market Analysis

Conducting industry and market analysis is the process of looking at the  entire hospitality industry to identify trends that may impact your hotel business. Market analysis shows investors that you are prepared for external market  forces.

Hotel industry analysis views trends such as economic, environmental, political and technological and identifies how they will affect your business. For example, digital check in technology has increased across the hotel industry due to a rise in tech savvy guests. 

Consider what customer experience solution you will put for your guests at your hotel. Look at the hospitality industry’s history, its present size and how it is expected to grow both in the short and long term.

Conduct Competitive Analysis for the Hotel

Conducting competitive analysis for the hotel entails conducting thorough competitor  research to get a glimpse of how your hotel will compare. Identify five major competitors three of whom should be direct competitors while the other two should be indirect competitors.

Direct competitors have the same market niche as your hotel while indirect competitors target a different target market from you. Analyze their strengths that you will emulate as you grow your businesses. Identify their weaknesses that you will leverage to improve services for your market niche.

Being savvy about your competitors’ strengths and weaknesses leads you to identify your unique selling proposition. Outline what differentiates your hotel from your competitors to illustrate how your business will add value to the hotel industry. 

Describe Hotel’s Products and Services

Describing your hotel’s products and services entails summarizing the key services and amenities that will be offered. An elaborate products and service description builds a detailed picture of what it feels like staying at your hotel.

When building a list of your services, think about your hotel’s location, the dietary needs of your ideal guests, guests’ ideal budget as well as the physical characteristics and scope of your hotel. Providing a swimming pool is a good move for a hotel located in the tropics.

Describe the uniqueness of your services and amenities whether it is a unique charming decor or offering complimentary breakfast. The special features will make your hotel stand out from others. The ultimate goal of describing your hotel’s products and services to achieve sales and inspire potential customers.

Outline the Hotels Management and Organization Structure 

Outlining the management and organization structure entails providing an overview of your hotel’s management roles according to job responsibility and ranking.

Organizational structure ensures the proper functioning of your hotel as it establishes a chain of command and workflow. Choose your organizational structure such as hierarchical or divisional to structure your hotel business team. Your management hierarchy includes you as the business owner, a general manager, departmental managers and operations staff.

Highlight key staff and their backgrounds by attaching their resumes. The bio of your management team demonstrates that you have qualified staff to ensure quality services. An organization structure for your hotel business enhances productivity by enabling better coordination, quick decision making and employee communication.

Define Hotel’s Operations Plan

Defining your hotel’s operations plan entails revealing your plan to run your daily operations. It is about having the right people and putting the right processes in place. The operations plan outlines key responsibilities and tasks of your team.

When defining your hotel’s operations plan, consider your service standards, number of staff required, how you will manage stock as well as what hotel technology solutions you will require. Detail short and long term operational plans and the stakeholders involved for each area. Designating persons responsible for your hotel’s daily operations promotes accountability. 

Define Hotel’s Marketing Plan

Defining your marketing plan is the process of outlining the channels you will use to reach your target audience and drive bookings. A marketing plan outlines your marketing strategies which include channels such as advertising, digital marketing, email marketing and online reviews.

A marketing strategy helps you reach the right people, at the right time and with the right message. Creating an effective marketing strategy requires you to take a look at what your competitors are doing.

A marketing plan stands on the 5Ps pillars namely product, price, people, place and promotion. Outline the prices of your services and the reasoning for the pricing. Indicate the place where your hotel is found physically as well as your online presence.

Define Hotel’s Financial Plan

Defining your hotel’s financial plan involves including anything that impacts your finances such as startup costs, opportunities for fundraising and a return on investments timeline.

Include financial statements such as income statements, balance sheets and cash flow statements. Income statements show what your revenue, expenses and profit will be over the next three to five years.

A balance sheet identifies your assets, liabilities and equity while a cash flow statement shows how cash will flow in and out of your business.

Potential investors care most about your financial plan as it proves how your hotel business will generate a return on investments. Your financial plan should cover your business structure, business model, critical suppliers, budget as well as your accounting practices.

Your budget provides the startup costs that you require to set up your hotel business. Where you require funding, indicate how much funding you will need and when.

Write Hotel’s Financial Projections

Writing financial projections entails presenting your business’ estimates or forecasts of its future financial performance. Create financial projections for a span of between one and five years to be reviewed annually.

Start with a projection of sales to estimate how much your hotel business will make and consider external factors such as economic downtime.

Creating a sales forecast needs you to do more research on the hotel industry to gain insights into potential sales. You will then make an expenses projection which will result in you determining your profitability likelihood. Financial projections are used for internal planning, making strategic business decisions and attracting investors to secure funding. Your financial projections should be realistic, achievable and based on factual data.

Is a Hotel Business Plan Similar to a Restaurant Business plan?

No, a hotel business plan is not similar to a restaurant business plan. Both business plans have the same structure and contain the same elements of a business plan.

The process of writing both business plans entails similar steps such as writing an executive summary, describing your business, conducting a market analysis and describing your services. Both a restaurant and a hotel business are in the hospitality industry which means that their business models will be similar. Both business plans serve the same purpose of providing a roadmap for entrepreneurs to make their business visions a reality.

The only difference is that the hotel business plan may focus on more elements in terms of operations and management since it has more products and services like accommodation and conference facilities. 

Can Hotel Business Plans be offered by Business Plan Services Companies?

Yes, hotel business plans can be offered by business plan service companies. Business plan service companies understand that your  business is unique. They will take time to custom make  your hotel business plan reflecting your values and vision.

Business plan service companies have seasoned business plan writers with a track record of delivering high quality business plans. They have a team of experts who combine industry experience with market research to come up with insights that will set your business apart from competitors. Business plan service companies provide hotel business plan templates online and  are downloadable.

Who writes Hotel Business Plans?

A business plan writer or consultant writes hotel business plans. They help you free up your time so that you focus on other critical aspects of your hotel business. Having worked with a diverse range of clients and industries, hotel business plan writers bring experience and expertise tailoring your plan to investors’ needs.

Professional business plan consultants have access to resources such as industry databases and financial modeling tools. The resources enrich your hotel business plan as the consultants are able to gather reliable data to ground your plan on reality.

How much is a hotel business plan? 

A hotel business plan costs between $2000 and $ 25000. However,the cost of the plan varies due to factors such as the length of the document, size of the business, turnaround time and quality required. A lengthy business plan costs more because it will contain a lot of details.

A business plan for a large hotel business is expensive because of the complexity of the plan as compared to that of a small hotel business that will cost the least. A business plan delivered within a shorter period will cost more.

How long is a hotel business plan?

A hotel business plan is between 15 to 25 pages long. The length of the business plan varies due to factors such as the size of the hotel business, purpose of the plan as well as the nature of the plan. A hotel business plan for a big hotel will be longer than that of a small hotel.

A plan created for investors or lenders will be longer because of the large volume of information that is required to be presented. A hotel business plan for internal use will be shorter because it will contain few details.

How long does it take to write a hotel business plan?

It takes three to four weeks to write a hotel business plan. The time taken to write the plan depends on factors such as the experience of the business plan writer, the size of the hotel business as well as the purpose of the plan.

A highly experienced business plan writer will take a shorter time than a less experienced one. It will take longer to write a business plan for a big hotel as compared to that of a small hotel. A hotel business plan created for external use takes longer to write than the one created for internal use.

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