How to Start a Hotel


At present India is one of the top tourist hotspots of the world and one of the up and coming economies. These factors make it one of the leading options when it comes to the hospitality business. India has great diversity in terms of its regions and cultures and there are plenty of man-made and natural resources.

Its cities, towns and hill stations are well connected in terms of transportation options and thus attract tourists from all over the world. This means that there are plenty of opportunities to achieve success as far as new hotels in India are concerned.

Starting a hotel – deciding the type and location of hotel

As in other businesses, the first step in starting a hotel is deciding what sort of an enterprise it is going to be. It could be a business hotel or one catering primarily to tourists. The owners also need to determine which location will work best for their hotel.

In India, the hill stations are among the most favorite tourist destinations along with locations such as Delhi, Mumbai, Rajasthan, Goa, and south India, especially Kerala. Mumbai is a remarkable location for any hotel as it is a tourist hub as well as commercial center.

Starting a hotel – logistics

Good logistics are an integral part of starting and operating a hotel properly. It is important that the hotel site is near important transit points such as railway stations and airports. Close proximity to entertainment destinations such as shopping malls and multiplexes is also desirable. If the hotel owner decides to opt for a location outside the city, then he or she should make sure that it is properly connected to the main city.

Starting a hotel – the area required

Before opening a hotel, the owners need to determine the area they will require for setting it up properly. Normally a facility with 70-120 rooms needs an approximate area ranging from 10 thousand to 60 thousand square feet. The area needed is also determined by the quality of the hotel.

In case it is a 5 star hotel with 100 rooms, the owner should acquire a maximum of 100,000 square feet, which means that every room will have an average of 220 to 280 square feet area.

Starting a hotel – planning the hotel layout

The owners need to get professional assistance for planning the hotel’s layout. They can also consult interior designers for getting guidance regarding the various intricate details of hotel décor and the ways of drawing guests. They can also go for a local builder who will be capable of designing and executing the planning layouts, interior decoration, and designs. The entrepreneurs can look up online websites and media advertisements for getting in touch with these professionals.

Starting a hotel – financials

Before starting the hotel, the owners should make sure that the financial requirements are well satisfied. Ideally, they should be self-equipped to start the operations but otherwise, bank loans are a good option to get things going. In India, business loans can be availed from both nationalized and private banks. Normally, the owners have to arrange 30 percent of the necessary capital on their own while the rest can be taken from the banks.

Starting a hotel – market surveys

The owners should hire professional agencies to do a survey for finding out the business potential in a particular area. Ideally the whole exercise should be done in a radius of 2 to 10 kms. The agents can be asked to analyze the general market share in the specified area as well as the social lifestyle and overall trends prevalent in the expected customer group.

They should also focus on finding out the rates of their possible competitors in the immediate area. Ideally, the owners should look at lower rates with the same quality of services and facilities being offered by the other hotels. They can also do this survey on their own instead of relying on agencies.

Starting a hotel – getting licenses

The licenses also need to be obtained before starting a hotel. Majority of these have to be renewed on a yearly basis and the most important among these are applicable for lodging, liquor, water and sewage, and food. The owners also need to procure licenses from the Pollution Control Board.

Separate licenses are required if the owners are planning to have live shows and events at their premises. They also need to get proper verification done by concerned officials regarding areas such as fire codes and operation of elevators.

Starting a hotel – recruitment

While starting the hotel, the owners should also look to recruit with an emphasis on the following positions:

  • Customer care executives
  • Sweepers
  • Managers
  • Cleaners
  • Housekeepers
  • Washers
  • Waiters

The owners can look up sites such as indiaedu.com for getting the latest information on the leading management schools in India for recruiting professionals in such positions.

Most of the top level staff like the hotel managers, customer care officials, and senior chefs is trained at the b-schools. The lower level employees such as housekeepers, waiters, and sweepers can be hired through job placement organizations or using local media for advertisements.

Starting a hotel – ratings and promotions

An important step while starting a hotel is getting is rated from the Indian Tourism Board. The ratings normally vary within 1-, 4-, 2-, 5-, 3-, and 5 deluxe star systems. The owners should also look at every possible way to promote their product – the promotion can be done locally, in India, and even outside the country. Word of mouth publicity can be done as well.



Last Updated on 29 March 2012