How to Start a Hotel Business

Start a hotel business by following these 10 steps:

1. Plan your Hotel Business
2. Form your Hotel Business into a Legal Entity
3. Register your Hotel Business for Taxes
4. Open a Business Bank Account & Credit Card
5. Set up Accounting for your Hotel Business
6. Get the Necessary Permits & Licenses for your Hotel Business
7. Get Hotel Business Insurance
8. Define your Hotel Business Brand
9. Create your Hotel Business Website
10. Set up your Business Phone System

We have put together this simple guide to starting your hotel business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out othersmall business ideas.

圣EP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

• What will you name your business?
• What are the startup and ongoing costs?
• Who is your target market?
• How much can you charge customers?

Luckily we have done a lot of this research for you.

What will you name your business?

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit ourHow to Name a Business指南或得到帮助与我们头脑风暴一个名称Hotel Business Name Generator

If you operate asole proprietorship, you might want to operate under a business name other than your own name. Visit ourDBAguide to learn more.

Whenregistering a business name, we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability.

It's very important to secure your domain name before someone else does.

What are the costs involved in opening a hotel business?

Regardless of whether you’re opening a boutique hotel with five rooms or a mega hotel with hundreds of rooms, the costs to get started can be substantial. Between the land, the equipment, the furniture, and the licensing requirements, owners typically need a lot of capital to get started. Even a Super 8 hotel can cost up to $4.5 million to open. However, there is no industry average because the costs range widely based on the value of the property and the building materials used.

What are the ongoing expenses for a hotel business?

Ongoing expenses include facility upkeep, employee wages/salaries, advertising, insurance, replacing beds and furniture, office supplies, utilities and high-speed internet. Plan to spend at least a couple hundred dollars per month on replacing room mattresses, shower curtains, carpet, dressers, etc. The exact figure will hinge on the number of rooms your facility has and the age of the beds, furniture etc. Low-level employees who check in guests and clean the hotel will earn between $8 and $15 per hour. A hotel manager, marketing professional, and accountant will make between $30,000 and $60,000 per year. Budget at least a couple hundred dollars per month for facility upkeep. A maintenance person will earn between $12 and $25 an hour. Budget $50 to $100 per month for office supplies. Utilities including high-speed internet for the entire hotel will likely cost $150 to $300 or more per month. Dedicate at least $200 to $500 or more for monthly advertising. The exact cost of marketing hinges on the economics of your local market.

Who is the target market?

The target market can be anyone looking for a room for the night — whether a traveler is coming from across the world or across the street. However, all hotel owners will develop their own target demographic based on their amenities and location. Luxury travelers will not want to stay at the same hotel as a mid-level executive who is in town for a conference.

How does a hotel business make money?

Hotel owners make money based on the profits of the hotel, meaning they'll need to work out how much they want to make a year before setting their room rates to account for their salary. They usually pay themselves a standard amount per year and then invest the rest of their profits into the property.

How much can you charge customers?

The average cost for a hotel room is $137 a night, but there are some luxury hotel suites that cost $80,000 a night to stay. Hotel owners need to be careful about how they're pricing their rooms based on demand. A holiday weekend can potentially kick up prices by triple their normal cost or more, so it's important to set prices based on what people will pay.

How much profit can a hotel business make?

A hotel has enormous profit-making potential. Some hotels make six figures per year. Others rake in millions per year. Unfortunately, some hotels fail to make a profit. The level of profitability depends on a number of different factors. Grow the business, expand to a second location and you will likely exceed the six figure mark. Continue to add locations and your hotel business will approach the million dollar profit range.

How can you make your business more profitable?

成功的酒店业主可以考虑特许经营their business or opening up more locations in an area. They can even give educational courses to other hopeful hotel owners about how to succeed in a competitive industry.

圣EP 2: Form a legal entity

The most commonbusiness structuretypes are thesole proprietorship,partnership,118bet金博宝 ,corporation.

Establishing a legal business entity such as anLLCorcorporationprotects you from being held personally liable if your hotel business is sued.

You can金宝搏188是什么公司yourself and pay only the minimal stateLLC costsor hire one of the118金宝app for a small, additional fee.

圣EP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

There are specific state taxes that might apply to your business. Learn more aboutstate sales taxand franchise taxes in our state sales tax guides.

圣EP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to aspiercing your corporate veil.

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Get a business credit card

Getting abusiness credit cardhelps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• 建立你的公司的信用组织ry, which can be useful to raise money later on.

圣EP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with ourLLC Expenses Cheat Sheet.

圣EP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a hotel. Learn more about licensing requirements in your state by visitingSBA’s reference to state licenses and permits.

Certificate of Occupancy

A hotel is generally run out of a large building. Businesses operating out of a physical location typically require aCertificate of Occupancy(CO). A CO confirms that all building codes, zoning laws and government regulations have been met.

• If you plan to lease a location:
• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a hotel business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening,it is recommendedto include language in your lease agreement stating that lease payments will not commence until a valid CO is issued

• If you plan to purchase or build a location:
• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your hotel business will be in compliance and able to obtain a CO.

圣EP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully.Business Insuranceprotects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face,begin withGeneral Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need isWorkers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

Is this Business Right For You?

This business is good for someone who enjoys the hospitality business. Those who run hotels have to be adept at catering to a number of different needs, so an owner will need to be flexible when it comes to how they respond to different travelers and consistent when it comes to delivering unparalleled customer service. From business travelers to young families, each guest will have their own priorities when it comes to where they stay.

What happens during a typical day at a hotel business?

Hotel owners may have to deal with a range of responsibilities in their day-to-day job, including the following tasks:

• Hiring/scheduling/managing staff
• Negotiating room rates for different days
• Completing paperwork and administration duties
• Handling financial obligations/investors
• Completing ongoing education regarding the hotel market

What are some skills and experiences that will help you build a successful hotel business?

People who have experience in the hospitality industry will have a head-start because they will have already seen many of the hiccups that come with running a hotel or a restaurant. Those with an MBA or formal hospitality training can also use their education to help them make smarter, more cost-effective decisions.

What is the growth potential for a hotel business?

There has been a lot of talk about how the hotel business is being hurt by websites like Airbnb. The amenities and service tend to be more intimate at private homes or property, which can be appealing for people who who are sick of the corporate structure or lack of empathy on the part of hotel employees. However, the growth potential for hotels can still be substantial for a number of reason.

There are still plenty of travelers out there who would prefer to stay at a hotel, especially considering that there is a certain level of hesitation for many people when it comes to staying with strangers. In addition, websites like Airbnb are likely to become more heavily regulated in the next few years which may make it more difficult for travelers to take advantage of the lower rates.