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How To Write A Hotel Business Plan

How To Write A Hotel Business Plan

Writing a hotel business plan is a necessary process not only to solidify concrete ideas but also present a well-thought-out strategy if you are seeking investment from venture capital. A business plan outlines a complete analysis of operating expenses as well as long-term profitability. A hotel business plan will consist of four areas which entail a market summary, financials, operational plan and the executive summary.

Market Summary

The market summary is an environmental analysis which takes into account many economic factors such as location and occupancy rates. Doing research on existing hotels within a reasonably close radius to the property in question will help provide a basis for labor costs as well as what to charge for lodging. It also help provide insight into what extra amenities might be required to help lure both business and casual travelers.

If you're targeting a budget conscious traveler it may have a significant impact on how the hotel is conducted as opposed to targeting business travelers. The target clientele will not only impact certain services such as Wi-Fi or continental breakfast but also determine the overall look and feel of the establishment. Once you understand your target market you will then be able to appropriately market to this client base. Will marketing consist of primarily online advertisements or a billboard off of the freeway? All these factors are part of the market summary which is the basis of increasing foot traffic and being a long-term viable option for a business.


Once you understand who your clientele will be then you can determine what costs will be associated with maintaining the hotel. High-volume business travelers may not be interested in the types of accoutrements which appeal to tourists. They may only be interested in high-speed Wi-Fi and a laundry service. Tourists on the other hand may find it more important to have access to an exercise facility and a pool. Regardless of which group you target there are still general expenses which must be considered when writing a hotel business plan.

Common to all businesses are standard expenses such as labor costs and utilities. How much will be spent on maid service and room service? Will you have a janitorial service or higher janitors on staff? There will also be costs related to Worker's Compensation and employer contributed taxes. Accurate figures will also need to be provided regarding maintenance and insurance which are required to maintain a hotel. Detailed financials provide a good understanding of what the operational expenses will be and will determine how much capital is required to successfully fund the hotel for a specific period of time, usually 3 to 5 years.

Operational Plan

The operational plan consolidates the financials and market plan to provide a working guideline of how the hotel will be run. You may determine after completing the operational plan that the financials will need to be reevaluated to accurately reflect additional consideration outside of marketing and basic operating expenses such as utilities. The operational plan provides the big picture overview of how the hotel will function. It might be difficult to fully flesh out an operational plan if you're unfamiliar with hotel management and various legal requirements. Obviously starting a hotel is a large endeavor so it might be best to obtain hands-on experience in the hotel industry otherwise the operational plan may have holes resulting in missed expenses.

Executive Summary

The executive summary is the sales pitch when seeking venture capital. It is the dream made reality that helps bring the reader into your vision of the future. A business plan coalesces all aspects of how you plan to bring your ambition to fruition. By the time prospective investors get to the executive summary they will already have a good idea of whether or not what you propose is feasible. If after looking at the numbers the operation seems realistic then the executive summary will be that final summation which inspires investors to believe in you and your dream.


When writing a hotel business plan it is always best to have trusted friends or colleagues check it for both grammar and punctuation but also overall presentation. Much like submitting a resume for a position in a company, people or organizations being pitched will look for any excuse to move on. Don't let typos and bad grammar sink your idea. Take the time and effort to present your hotel business plan in the best light possible. Your hotel business plan will be a direct reflection of your professionalism and attention to detail.

Image by: Rafael Tovar