The hospitality sector is a vital element of the modern economy, yet few entrepreneurs have easy access to the critical information needed to kickstart the hotel development process. Figuring out which key mistakes to avoid from the start is an imperative part of developing a successful hotel that attracts visitors from around the world.
How long does it take to build a hotel? How much should you be prepared to spend? This breakdown of the hotel development process explains everything you need to know from start to finish.
The Hotel Development Process
We are going to outline the hotel development process from beginning to end. Read on to learn about everything you should know before investing in hotel development.
The First Stage: Location & Financing
The hotel development process begins with determining the ideal location for your future hotel. Only then can you move onto financing, which will ensure you have the financial flexibility to see this project through to the end.
Begin by assessing various locales and determining their profitability; areas already saturated with hotels are rife with competition, but this is also a sign of established consumer demand that you could tap into. On the other hand, breaking new ground as the first hotel in a budding new region may entail extra work, but with great risk comes the opportunity for great reward.
How long does it take to build a hotel?
The answer will largely depend on your financing and location. If the conceptual planning and land acquisition take longer than expected –– or run over budget –– it could spiral out of control. Some estimates note that at least $27 million is an average figure when developing hotels.
That’s why securing the help of financial backers like AVANA Capital is an essential part of keeping things on schedule. Once your finances are secure, the project is feasible and pre-construction leads to actual groundbreaking. Slowly but surely, your actual hotel begins to materialize.
The Second Stage: Construction & Operations
Now the actual groundbreaking begins. This stage of the hotel development process is perhaps the most difficult –– construction is notoriously expensive and prone to take longer than is often expected, especially if supply chain difficulties continue to persist. While the construction gurus ensure your building stays standing, you need to assemble a team.
The hotel development process doesn’t just relate to physical construction, but also the assembly of a talented crew. With the help of financial backers like AVANA Capital, you’ll have the funds needed to recruit the best in the business. Staffing will be difficult during a labor shortage, so ensure competitive wages and fair benefits packages are on display to lure in talented workers.
Staffing and management are critical. Nobody wants to stay at a hotel with lackluster service. Your brand operator, daily managers, and hardworking hotel staff are the literal lifeblood of your business –– without them, everything else won’t simply falter, but rather fail.
The Final Stage: Branding & Long-Term Growth
There are already over 84,000 hotels & motels in the United States alone. To stand apart, you’ll need a mighty theme that attracts tourists from around the world. Alternatively, you may choose to market yourself as a local-getaway for nearby residents to enjoy as a luxury when they need a break from the monotony of their own homes or apartments.
Financial experts like AVANA Capital can help business owners secure the money they need to brand and market with style. With a marketing team established, you can cultivate a niche audience of travelers who return year after year to fill your company coffers. It will also convince lenders that you’re a viable investment if you need money in the future to expand.
Additionally, investors and entrepreneurs across the hospitality sector have been learning hard lessons about flexibility and the continuity of operations. The global pandemic not only cratered global travel for some time, but led to serious stress for many hotel operators. Ensuring financial flexibility and operational continuity can be maintained despite future pandemics should be a major priority going forward.
The price of land, furniture, and even utilities can be estimated with some serious accuracy, but certain things which have the ability to upend the hospitality industry may continue to be undetectable until a crisis suddenly develops. Adequate pricing models and a robust staff of workers who are substantially supported (and thus don’t contribute to sudden labor shortages) will be needed in perpetuity.
Start Building Today With AVANA Capital
Ready to start the hotel development process and break ground at your dream site? You’ll need the help of financial experts at AVANA Capital before you hope to cut any ribbons.
Our talented financiers provide simple loan forms, fair deals, and reliable financing during tough economic times. We provide timely closings and direct lending. The entire hotel development process is substantially easier when owners don’t have to worry about easily overspending and breaking their budget.
Contact AVANA Capital today to develop your hotel with confidence and competency on your side. Before long, your new hotel will be the target destination for travelers from around the world.
This article was originally published on avanacapital.com by AVANA Capital. Read the original post here. Accessed on February 4, 2022.
