Complete guide to the Hotel Business Plan: tips, examples and a ready-made template

Imagine you wanted to cook a gourmet recipe for the first time. You could open the refrigerator and start mixing random ingredients, hoping for a flavorful result.

Or, you could follow a detailed recipe that guides you step by step, telling you what ingredients to use, in what amounts, and in what order to add and mix them.

A business plan is exactly that: your recipe for success!

A business plan is not only necessary if you are preparing to open a new hospitality business; it is a detailed technical document that helps you establish:

• your hotel's goals: e.g., improve customer service, achieve a certain occupancy rate, increase turnover over the previous year, etc.

So a business plan is both a roadmap to help you stay organized and focused, as well as a key tool for engaging externalstakeholders (such as investors, banks, finance companies, shareholders, public administration) and internalstakeholders (such as owners, general manager or management).

Preparing a recipe without following instructions can be a fun experiment, but when it comes to your hotel and your investment, it's best not to improvise.

Technically it is possible to run a hotel without a business plan, everything might go well and you might achieve your goal. But it will be much more difficult, take longer, and you will run the risk of making mistakes more often.

Analyzing and understanding internal and external factors to your hotel is critical to writing an effective business plan, especially in the increasingly competitive and changing hospitality industry. But what do these terms mean?

It means understanding your hotel's strengths and weaknesses on all levels: from staff skills, to service quality, to financial capacity. Knowing them will help you leverage what is working well and improve areas where you are lacking.

It means understanding the opportunities and challenges present in your target market. In the hospitality industry, new trends, new customer preferences, changes in technology or competitor behavior can emerge quickly. These elements can be opportunities or threats: for example, the rise of eco-tourism could be a plus for a hotel already committed to the "green" transition, but a critical issue for a hotel that has never pursued sustainability.

Strengths and weaknesses are related to the hotel's internal analysis. For example, a strength might be a highly qualified and motivated team, while a weakness might be the absence of a restaurant within the hotel.

Opportunities and threats are derived from the external analysis. An opportunity could be increased demand due to a special event, while a threat could be the construction of a new competing hotel nearby.

Demand forecasting is a crucial component of a hotel business plan: it helps you manage resources and finances, plan marketing strategies, and provide excellent customer service.

The best way to forecast demand is to do a market study, as a means to retrieve key information on trends, consumer behavior, competition, and all factors that may influence demand for your hotel's services.

You can divide the market study into two phases:

Here you will consider the external forces that influence the hospitality industry as a whole. For example:

• Political-legislative context: tourism laws, hospitality regulations, health and safety regulations, etc.
• Target market: size and trends of the hotel's target market and competitors.
• Technology evolution: technology trends relevant to the hospitality industry such as home automation, chatbots, artificial intelligence, etc.

Here you will focus on the specific aspects of your hotel's immediate environment to better understand how to differentiate and personalize your services. For example:

• Clientele: defines age, gender, income, nationality, travel preferences and other demographics of your target customers.
• Revenue through Operators and Channels: details the hotel's supply chain
• Competition: explores the hotel's direct and indirect competitors with their strengths and weaknesses, products and services, marketing strategies, etc).

To do this kind of analysis you can use externaltools such as books and trade journals, conference proceedings, trade association reports or Eurostat data, but also internaltools such as data from your management software, business intelligence, OTA channels and benchmarking.

The Marketing Plan is a key section of the business plan that focuses exclusively on the marketing, revenue and financial strategy related to the hotel's products and services. It is used to set goals and implement concrete actions to achieve them.

It is a document that is primarily intended for an internal audience (general management, reception staff, revenue manager, etc.) and is drafted annually, although it is good to remember to update it regularly to adapt to market developments and any internal changes in the hotel.

Sections that typically make up a Marketing Plan include:

• Business Mix for analysis of the hotel's market segmentation.
• Business Strategy: revenue management, sales and marketing activities aimed at achieving the planned budget.
• Qualitative Strategy: operational and marketing activities for optimizing procedures and improving review scores.
• Financial Strategy: activities related to the costs incurred by the hotel.

Competitive advantage, or what is called a "USP" (Unique Selling Proposition) in marketing terms, is what distinguishes your business, products or services from those of your competitors. In essence, it is the reason why customers should choose you over others.

But how do you go about defining your advantage over your competitors? Here are some steps to follow:

• Analyze the market: you need to understand what your competitors are offering and identify current market trends.
• Identify potential risks/opportunities: think about how you could differentiate yourself and outperform competitors using the SWOT analysis you have already performed.
• Consider customer needs: what are your guests looking for? The best way to do this is to ask them directly, avoiding making assumptions.

After gathering all this information, you can list your strengths using the acronym USP:

• U (Unique): the features that make your hotel unique. It can be something that only you offer and no one else.
• S (Selling): having a product or service that is in line with market expectations or that is not met by competitors.
• P (Points): the points that differentiate your hotel from the competition.

Once you have performed all the analyses and collected the necessary data, you can proceed to include them in your business plan, which will become a key document for directing and growing your hospitality business.

You will need to break it down into two main sections: a descriptive one and a quantitative one. Here's how to compose both parts:

Descriptive part:

• company presentation
• project summary
• description of products and services
• target market
• business strategies
• SWOT analysis
• events calendar

Quantitative part:

• Market and facility KPIs
• Budget of revenues and costs
• Earnings from top accounts and channels
• Business mix
• Analysis in terms of quality

In this article you learned about all the steps involved in creating a complete business plan for your hotel or lodging facility.

Starting from scratch, however, can be difficult, especially if this is the first time you find yourself writing one. That's why we have prepared a sample business plan template for you to download for free!
Inside you will also find a matching Excel template: together they will provide you with a solid structure and guide you step by step in drafting your plan. Not only will you savetimeandeffort, but you will also be sure not to make mistakes. Startwriting your hotel's recipe for success now!