How to Run a Hotel Business Successfully? – Expert Guide

How to run a hotel business successfully? It is no easy feat. From preparing for hotel launch to managing day-to-day operations, you will face many unexpected challenges and chances. To achieve a successful hotel business, you need to grasp the opportunities and handle the challenges.

In this article, we will explore a range of topics related to hotel business management, from preparing for a business start to boosting your business. Read this article and navigate these tips to help your hotel for long-term success.

Getting Ready

Understand Hotel Business Basics

• Hotel Room Services: This is an essential service provided by hotels. It mainly includes room rental, hot and cold water supply, laundry, room drinks, wake-up services, and more.

• Hotel Reception Services: This mainly involves providing reception services to every guest, which includes not only parking and luggage transportation services, but sometimes also providing graphic and text transmission services.

• Food and Beverage Services: Different types of hotels provide different types of catering services, such as Chinese food, Western food, and buffet. Some hotels also provide coffee shops and bar services.

• Merchandise Business Services: Some hotel companies open shopping malls or self-service vending machines selling items that consumers need in the hotel to meet their various needs, broaden their business, and increase revenue.

• Hotel Entertainment Services: Entertainment services are one of the many services that hotels offer, aimed at increasing customer stay time and enriching their accommodation experience. This includes fitness rooms, sauna rooms, swimming pools, and various sports project services like tennis/table tennis.

• Service-Oriented Business Services: Generally refers to using a certain venue, equipment, and tools to provide additional services for the hotel, such as beauty, hairdressing, manicures, laundry, photography, etc.

Choose Hotel Type and Target Customer Group

There are various types of hotels in this modern life, the most we can see are as follows:

• Business Hotels: Target customer group: guests who are engaged in business activities. These guests have high requirements for the hotel’s location, requiring the hotel to be close to the city center or commercial district. Their customer flow is generally not affected by the season. Business hotels have complete facilities and relatively perfect service functions.

• Resort Hotels: Target customer group: guests who are on vacation. These kinds of hotels are mostly built near the seaside, hot springs, and scenic areas. They have strong seasonality in their operations. Resort hotels require relatively complete entertainment equipment. The hotel industry is one of the three pillars of the tourism industry, and resort hotels are a hotel form closely related to tourism.

• Long-stay Hotels: Target customer group: guests who need a long-time staying. These type of hotel rooms mostly adopts a family-style structure, with suites as the mainstay. Larger rooms for a family, and smaller single rooms for a single person. It not only provides general hotel services but also provides general household services.

• Conference Hotels: Target customer group: conference travelers. These kinds of hotels provide services in addition to food and accommodation such as transfer service, conference material printing service, video recording service, and tourism.

• They require relatively complete conference service facilities (meeting rooms of different sizes, multi-functional halls, simultaneous interpretation equipment, projectors, etc.) and fully functional entertainment facilities.

• Sightseeing Hotels: Target customer group: sightseeing tourists. These types of hotels not only meet the needs of tourists for food and accommodation but also require public service facilities to meet tourists’ comprehensive needs for rest, entertainment, and shopping, making their tourism life rich, colorful, and spiritually and materially enjoyable.

• Economy Hotels: Target customer group: tourists and business travellers. These types of hotels have low prices, convenient and fast services, and simplified functions. Their characteristics can be described as fast check-in and check-out, realizing a mutual benefit model between residents and merchants. Examples include various budget hotels and chain hotels.

• Apartment-style Hotels: Target customer group: lazy and busy people. In hotel-style apartments, residents can enjoy the hotel’s attentive services and the happiness of home living. They have independent bedrooms, living rooms, bathrooms, dressing rooms, etc., and they can also cook delicious home-cooked meals in the kitchen.

• Boutique Hotels: Target customer group: for certain special consumer groups. These hotels are mostly designed with bold decoration and novel techniques, such as various theme hotels, art hotels, and design hotels.

Analyze Competitors and Market Demand

• Competitor Analysis

Competitors refer to hotels that are geographically close and provide products and services that are similar or the same in content and level, and have the same target customer group. There are many ways to determine hotel competitors, either by identifying competitors based on target markets or by determining them based on hotel star ratings or levels.

The analysis mainly consists of two aspects: facilities and services, and marketing strategy analysis. Facilities and services: understanding the advantages and disadvantages of competitors in terms of facilities and services. This mainly includes surrounding transportation, location, hotel room prices, surrounding environment, building features, hotel services, parking, etc. Marketing strategy analysis: understanding the marketing activities carried out by the hotel and competitors and the effectiveness of various activities, in order to grasp the competitive situation.

• Market Demand Analysis

Different city positioning will have different hotel market demands, correct analysis can help you determine the positioning of your hotel, and then help you achieve success. The specific contents you need to analyze include customer needs, customer groups, customer flow, average consumption level, etc.

Business Strategy

Create a Hotel Business Plan

Creating a hotel business plan is a detailed process that involves several steps. Here are some general steps that can help you create a solid business plan:

• Conduct market research: Before you start developing your business plan, you should conduct market research to assess the demand for hotels in the area where you plan to open your hotel. You can look at factors such as population growth, tourism trends, and competition.

• Define your target market: After conducting market research, you need to define your target market. Identify the type of guests you want to attract, such as business travelers, families, or luxury travelers.

• Develop your hotel concept: Your hotel concept determine your hotel market positioning directly. You need to determine the following contents: 1. Hotel size; 2. Product level; (Mid-end, high-end, or luxury) 3. Style type; (Traditional or classic, Business or vacation) 4. Operation mode; 5. Customer structure. 

• Create a financial plan: Your financial plan should include the projected startup costs, operating costs, building costs, and revenue projections. Identify potential funding sources, such as investors or loans, and create a budget.

• Develop a marketing plan: Your hotel marketing plan should outline how you plan to reach your target market and promote your hotel. Determine your marketing budget, and create a marketing strategy that includes digital marketing, social media, and traditional marketing tactics.

• Determine your management structure: Your management structure should outline who will manage your hotel, including the general manager, front desk staff, and other employees.

• Create an operational plan: Your operational plan should outline how your hotel will run day-to-day. This includes everything from the check-in process to room service to housekeeping.

• Revise and finalize your plan: Review and revise your business plan to ensure that it accurately reflects your goals and objectives. Once you’re satisfied with your plan, finalize it.

Remember that a hotel business plan is a living document that should be updated regularly to reflect changes in your business, the market, and your target audience.

Select a Hotel Management System

The hotel management system connects the front desk, housekeeping, and finance departments of the hotel to achieve standardized management operations for check-in, check-out, room status control, and financial management. It makes hotel management more digital, scientific, and convenient. All in all, hotel management system software enhances hotel work efficiency and reduces hotel operational costs.

So, selecting the right hotel management system is vital, here are some selection tips for your reference:

• If you plan to purchase a certain brand of hotel management software, it is recommended to conduct on-site investigations of the company’s qualifications, strengths, and development.
• Hotel management software has many functions, but more functions do not necessarily mean better. You should determine whether the software is suitable for your hotel. Understand whether the hotel system is easy to operate, whether the function structure is clear, whether it is stable, whether employees need training, and more.
• Emphasize easy operation and strong management. The software should have a clear and intuitive operating interface so that hotel managers can quickly learn how to use it. The powerful management functions should allow for scientific and modernized management of daily operations, report statistics, decision analysis, and other routine business processes, which can effectively improve hotel management efficiency.
• Choose hotel management software with appropriate prices. Do not choose products that are too cheap because products with low prices may have lower service quality.
• Pay attention to whether the hotel management system has permanent and free automatic upgrades. Maintaining software upgrades can help hotel management keep up with trends and improve efficiency.

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Design Your Hotel

Hotel design is also crucial to the hospitality business. Hotel design includes many aspects such as hotel reception area design, guest room design, lounge area design, hotel key card design, hotel door lock design, and so on. These designs run through the entire guest stay and affect the hotel guest experience. Below are several essential elements of hotel design for your reference:

• Spatial element: In interior decoration, the use of space should be reasonable. The distribution of indoor space generally includes three major parts: the rest area, the activity area, and the living area. The rest area should be relatively quiet, concealed, and have good air circulation; the activity area requires relatively spacious, clean, and beautiful; the living area is for dining and cleaning areas, requiring ventilation, safety, and cleanliness.
• Color element: Indoor color design includes the selection of wall and floor colors, furniture colors, and ornaments. In addition to visual effects, colors also directly affect people’s emotions and psychology.
• Lighting element: The use of lighting effects in indoor space is one of the characteristics of modern interior design. Sunlight is an important factor in nature. When designing, designers should make good use of different lighting to create different styles of environmental atmosphere.
• Decoration element: The role of wall decoration is not only to protect the wall but also to provide a beautiful, clean living environment. The choice of floor and ceiling decoration materials should be based on functional needs and coordinated with the overall effect of interior decoration.

Different types of hotels should have their design themes. No matter what kind of design, its core positioning should be to provide people with a comfortable resting place, which is the most basic, necessary, and cutting-edge design requirement of hotel design.

Hire the Right Staff

The hotel industry is a service-oriented industry, where the quality of service directly determines the guest repurchase rate.  Therefore, to ensure a successful hotel business, hotel staff selection is crucial.

An excellent hotel staff member should possess the following skills:

1. A good personal image, behave in a dignified and elegant manner;
2. Enthusiastic and patient;
3. Have expertise and be proficient in its application;
4. It is preferable to know multiple languages.

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Additionally, different positions in the hotel require different recruitment requirements. For example, the hotel front desk requires a certain level of experience, emergency handling ability, and a good personal image. The hotel housekeeping staff can have more relaxed requirements, such as being clean and able to follow the instructions of the supervisor. Suitable employees can improve your hotel’s service quality, enhance customer satisfaction, and effectively reduce hotel management costs, among others.

Boost Your Business

Provide Excellent Customer Service

Customer service is crucial in the hotel industry, providing excellent service can help you build loyalty and positive reputation. This may involve training staff to be friendly and helpful, responding quickly to customer needs, and going above and beyond to make guests feel at home.

Promote Online

The internet is a powerful tool for promoting hotel businesses, using online social channels can help you reach a wider audience. This includes online promotions, working with online travel agencies (OTAs), search engine marketing, etc.

• Working with online travel agencies (OTAs): Travel marketing websites are specialized websites on the internet that offer travel services, including hotel bookings, flight bookings, tourist attractions, etc., such as Ctrip, eLong, etc. Their main advantage is the convenience of customer search.
• On this specialized sales website, customers only need to enter the name of the tourist destination and the level of hotel information they need, and a series of hotel websites related to this information will appear on the screen, so customers can quickly check hotel information and book hotel rooms and services.

• Search engine marketing: With the development of the internet, information on the web is growing exponentially, search engines have become the preferred tool for netizens to find information on the web. Hotels can purchase keywords related to their services according to their situations, so that potential customers can find the hotel’s marketing website through search engines, which can increase website traffic and therefore increase hotel room and service bookings.

• Online promotion activities: Star-rated hotel websites need to attract customers to visit and consume at the hotel, taking different promotional measures at different times can effectively attract customers’ attention. Through website content promotion strategies, customer trust and favor can be won.
• In addition, increasing website content can not only meet customers’ needs for hotel information, but high-quality content may also be reproduced by other websites or newspapers, which can expand the value of hotel promotion.

Manage Pricing and Reservations

Properly managing pricing and reservations can help you maximize hotel revenue and avoid overbooking. This may involve analyzing market demand and adjusting prices accordingly. Many factors affect hotel demand, including peak and off-peak seasons, room occupancy rates, and other influencing factors.

To maximize hotel profits, you need to update your room prices promptly, such as offering promotions and discounts during the off-season to attract customers; during the peak season, analyze competitor prices and adjust prices dynamically based on occupancy rates, find the balance point, and maximize revenue.

Keep Your Business Up-to-date

Keeping your hotel business updated is conducive to the continuous growth of your hotel’s profit. The following aspects are very important:

• Monitor business performance and finances: Tracking your business performance and finances is essential to identifying areas for improvement and making informed decisions. This may involve analyzing financial statements, monitoring occupancy rates and customer reviews, and using key performance indicators (KPIs) to track progress over time.

• Continuously improve and innovate: To stay competitive in the hospitality industry, it’s important to continuously improve and innovate your hotel business. In this rapidly changing era, we need to timely understand the needs of users, and the needs of the times, to carry out innovation for the hotel. This may involve updating your hotel’s amenities and decor, adopting new technologies to enhance the customer experience, and investing in staff training and development.

• Build strong customer relations: Building strong relationships with customers can help you increase customer loyalty and repeat business. This may involve engaging with customers through social media or email marketing, responding quickly and effectively to customer complaints, and offering personalized services and incentives to loyal customers.

Handling Challenges

Hotels are an industry with high mobility, which means that the likelihood of emergencies and guest complaints is higher than in most other industries. Handling these emergencies is therefore one of the biggest challenges in running a hotel. Properly handling these situations can help minimize their impact on the hotel’s business and sometimes even increase guest satisfaction.

This involves regularly hotel maintenance, developing emergency response plans, training employees to handle various situations, and implementing a system for tracking and resolving customer complaints.

All in all, by proactively preparing for potential challenges and maintaining adaptability in the face of change, you can help ensure the long-term success of your hotel business.