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Startup

5 Tips for Startups to Grow a New Hospitality Business

Updated: February 14, 2023

Out of every crisis comes opportunity. Starting a business won't be an easy task especially in this pandemic. But with careful planning, and strategic decision-making, there's no reason why your vision can't succeed. Know how to successfully start a hospitality business

The hospitality industry has always had a huge potential. The past year has been harsh on hoteliers due to the pandemic, but the industry is swiftly getting back on its feet.

In the United States, the occupancy rate in the hospitality industry was only 40.3% as of November 2020, which shows a 304.5% decline compared to the year before.

But, the numbers are getting back up – and fast. This is one of those industries that never cease to surprise with numbers. Right now, people are more eager to travel than ever. They need to get out of their homes after a long quarantine, which makes this the perfect time for you to start a new hospitality business.

Starting a New Hospitality Business in 2021

With over 4 million hotel rooms in the world, the travel industry is worth around $1.6 trillion. This makes for one-tenth of the GDP on a worldwide level.

Whether you’re seeing yourself launching a small bed and breakfast business in your hometown, or opening a big hotel business to welcome hundreds of guests, the hospitality industry can become highly profitable – and fast.

With the economy reshaping itself after a crisis, now is the perfect time to start this business. You’re instantly tapping into pent-up demand, so the potential is huge. However, if you want this to work, you need to do it right.

Leading a business in the busy hospitality industry is hard work. You need to know exactly what to offer, how – and to who. With that in mind, here are five essential tips you need for your new hotel business.

1. Do your due diligence first

Deciding on what path you’ll pursue, how much you’ll invest, where you’ll be based – and crafting your business plan should always come first. This step determines any of the following steps in this list, and any action you’ll take from this moment forward. Hence, Customer due diligence should be your first step.

Do you know what kind of business you will pursue? Are you planning to start a hotel or resort business? If yes, do you have the money for it?

Are you planning on starting small? Do you have a spot for your bed and breakfast idea? Is the location desirable and often visited?

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Having a dream of leading a hospitality business is much different from reality. When you decide to act on your dream, you're looking at many important decisions and investments. It's best to tackle them as soon as possible. Based on all this, you need a business plan – one that will outline your plans, needs, opportunities, options, and abilities.

Based on the business plan you create at first, you can focus on finding the right tools and software, hiring proper talent, creating a smart digital marketing strategy, etc.

2. Find the perfect software for your hospitality business

No matter how big your new business is, you’ll have plenty to do to keep it up and running. You need a quality website where people can make direct bookings, amazing content that reels them in, support that’s available at all times, an organized schedule for housekeeping and reservations, etc.

All of this can be hard to tackle – and it often results in human error. Thankfully, the technology world has brought hoteliers an amazing solution – versatile features embedded into bed and breakfast software. By deciding on the software you’ll use, you’ll cover some of the most important things for your business.

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Lodgify, the top-rated B&B software right now offers a complete set of solutions that will allow you to organize your business affairs. Their solutions include:

Website builder to help you create an amazing site for your new business

Accurate reservation system that integrates with top renting platforms like Airbnb and Booking

Property management software that allows you to automate communication, simplify your accounting, assign tasks and monitor employees, etc.

Cloud-based calendar that allows you to keep track of all reservations and bookings from any place, at any time

Handling these things poorly on your own can be the cause of many issues – and the ruin of your business. If you mess up reservations, keep poor track of your employees, or offer bad support service, you won’t survive long on the market. Thanks to marketing automation and other features available in such software solutions, these important tasks are not only simplified – but optimized for hoteliers.

3. Focus on market segmentation

To define marketing segmentation plainly:

“When you’re targeting everyone, you’re selling to nobody.”

This is vital for businesses with a specific target audience such as the ones in the hospitality business. Not all people will be interested in visiting your location, in your services and features, or your type of business.

Understanding who will be willing to visit your business is essential for everything you do from this point forward. This will help you decide what to offer and what to invest in, how to market your business, and who to target with your strategies.

Targeting the right customers is not simple, but it’s the foundation stone of your business. It’s a work-in-progress, which means that you cannot stop analyzing who your guests are – and what they expect of you. Based on customer research, you can keep your business running – and growing.

A study performed by Harvard Business indicates that 85% of 30,000 new products and services launched in the US failed because of poor market segmentation. This means that, unless you know who you’re offering your services to and how to do this, you’ll be shooting blanks i.e. selling to nobody.

Targeting your market includes everything from knowing their demographic, needs, desires, habits, as well as the current trends they are following. For example, the past few years have been all about visualization. The digital world is filled with images, live stories and streams, videos, and graphs.

People seem to respond well to visual elements, which means that, for your business to get noticed, you need to visualize the important information. This is why so many hotel businesses in the hospitality sector use Piktochart these days – to turn plain and dull content into engaging material. By using their line graph maker, you can ‘turn boring data into compelling stories’.

4. Optimize the customer experience

Customer experience is crucial for the success of a hospitality business. In this industry, word-of-mouth can either make you or break you. This is why it’s important to keep every potential and existing guest happy. In a busy and competitive industry like this one, creating a good impact on people is essential for survival.

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People have very high expectations when they’re traveling these days. It’s not just personalization that matters – it’s also how the business is handling their requests and communicates with them. According to the Harvard Review, customers who had good experiences in the past spend 140% more than those who had poor experiences. It is happy guests that keep the hotel business revenues healthy. It is also happy guests that come back to your business next year – or spread the word around.

From trained staff to automated messages to a great live chat feature – there’s a lot you can do to optimize this part of the hospitality sector.

5. Leverage the powers of digital marketing

In the travel industry, digital marketing is an indispensable part. Statistics show that 700 million people will be booking rooms when they travel online by 2023.

Even today, the Internet is the most frequent place where people make their reservations. Seventy percent of travelers are already researching hotels and travel on their phones, and 83% of US adults book their travel entirely online.

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What does this mean for you?

It means that, if you want to succeed and attract people to your hospitality business, you need digital marketing – and you need it to be as amazing as possible. Right now, almost every hospitality business is investing in digital marketing. This is what gives you a competitive advantage and helps you reach your target audience.

From marketing automation to personalized services, you need to focus a lot of your efforts – and money on digital marketing. Make SEO optimization your priority – that’s how you get people to find and notice your business. And of course, optimize for mobile users since smartphones are the most frequent place where people book their accommodation.

The journey of your guests starts by finding your facility on engines or social channels. It can begin by word-of-mouth, but this is a slow and limited way to reach your target audience. Being visible on channels like Google, Yahoo, as well as booking platforms like Airbnb and Booking is essential today. And you can't just be present – you need to look amazing, too.

Think quality imaging, amazing content, and presence wherever you can reach. Don’t be afraid to spend some money on advertising, hire digital marketing experts, and freshen up your online presence every now and then.

Wrapping up

Hospitality business is a lot of work, but they also have huge potential. Now when people are more eager than ever to travel, you have a unique opportunity to make a new business a popular travel destination. Invest yourself into this – that’s the best way to succeed. Good luck!