The Hotel Business Plan - Market Analysis 101
Suppose you have got a brilliant new concept for a hotel or similar hospitality industry establishment.
It is not enough to just run away with that idea and head on to the drawing board.
There is another important thing to do before planning how many suites the hotel has or how large the restaurant will be.
That thing is something called market analysis.
Market analysis is, plainly and simply put, an examination of the different factors involved in your particular business.
This helps a potential business sort out the current market conditions in the area where it plans to set up shop, addressing all sorts of needs, identifying strength of demand, and ultimately getting a feel for the projected success of the establishment.
Location, location, location-when it comes to starting up a new hotel, one of the first things to be identified is the location.
This does not have to do with just whether you are putting your hotel in a "good spot".
It is also a good practice to determine the proximity of the space to vital establishments, identify competition within the vicinity, mark the level of people traffic, and find out upcoming developments within the area, among other things.
There are also many other factors involved in analyzing the location, not the least of which are social concerns, environmental condition, and any political factors in the area.
These factors are to be considered on top of the basic factors like size and potential growth, transportation, and other tourist activity in the area.
Also among the first and most important things to identify are industry trends, which will go a long way towards determining what approach you take with regards to business decisions.
Profitability hinges greatly on the hotel's ability to project and follow trends in order to keep occupancy up throughout the year and onward.
Identifying industry trends is also important to foster growth in terms of the services the hotel provides.
Determining the demand for the kind of lodging you are offering is also an important part of the market analysis.
Suppose you are planning on building a high-caliber 5-star property, but the market only has the capacity to support a 3-star or lower kind of hotel.
There is going to be some adjustments on your business plan, depending on the projected demand.
Going hand and hand with identifying the level of demand is your market segmentation, allowing you to target particular groups of people in order to delineate the kind of accommodations and services your establishment will offer.
This helps the business become more focused to cater to particular kinds of needs, preferably needs of people who are located within the area you are building the establishment in.
After taking the necessary steps in the market analysis, proprietors can then go to the next step of projecting various variables.
These include projections such as the market's occupancy over a year, sales, and the hotel's own room occupancy.
With a definitive market analysis in tow, the business plan for the new hotel can then proceed more smoothly and with fewer complications.
The market analysis is designed to help new businesses analyze the market's potential as well as determine valuable factors that can make or break the hotel's performance.
It is not enough to just run away with that idea and head on to the drawing board.
There is another important thing to do before planning how many suites the hotel has or how large the restaurant will be.
That thing is something called market analysis.
Market analysis is, plainly and simply put, an examination of the different factors involved in your particular business.
This helps a potential business sort out the current market conditions in the area where it plans to set up shop, addressing all sorts of needs, identifying strength of demand, and ultimately getting a feel for the projected success of the establishment.
Location, location, location-when it comes to starting up a new hotel, one of the first things to be identified is the location.
This does not have to do with just whether you are putting your hotel in a "good spot".
It is also a good practice to determine the proximity of the space to vital establishments, identify competition within the vicinity, mark the level of people traffic, and find out upcoming developments within the area, among other things.
There are also many other factors involved in analyzing the location, not the least of which are social concerns, environmental condition, and any political factors in the area.
These factors are to be considered on top of the basic factors like size and potential growth, transportation, and other tourist activity in the area.
Also among the first and most important things to identify are industry trends, which will go a long way towards determining what approach you take with regards to business decisions.
Profitability hinges greatly on the hotel's ability to project and follow trends in order to keep occupancy up throughout the year and onward.
Identifying industry trends is also important to foster growth in terms of the services the hotel provides.
Determining the demand for the kind of lodging you are offering is also an important part of the market analysis.
Suppose you are planning on building a high-caliber 5-star property, but the market only has the capacity to support a 3-star or lower kind of hotel.
There is going to be some adjustments on your business plan, depending on the projected demand.
Going hand and hand with identifying the level of demand is your market segmentation, allowing you to target particular groups of people in order to delineate the kind of accommodations and services your establishment will offer.
This helps the business become more focused to cater to particular kinds of needs, preferably needs of people who are located within the area you are building the establishment in.
After taking the necessary steps in the market analysis, proprietors can then go to the next step of projecting various variables.
These include projections such as the market's occupancy over a year, sales, and the hotel's own room occupancy.
With a definitive market analysis in tow, the business plan for the new hotel can then proceed more smoothly and with fewer complications.
The market analysis is designed to help new businesses analyze the market's potential as well as determine valuable factors that can make or break the hotel's performance.
