opening a hotel
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Opening a hotel is a large-scale project that requires a lot of preparation. If your dream is to open your own hotel establishment to welcome travelers, discover all our advice to achieve it.

Step 1: define your project

The choice of operating mode (independence or franchise) of your hotel is essential.

Opt for independence if you want to manage your hotel as you wish without external constraints. Independent hotels are in the majority and represent approximately 80% of the sector .

Conversely, franchising is aimed more at entrepreneurs seeking to reduce their risk and secure their investment. Despite a larger starting sum to invest, the franchise confers advantages such as access to effective management tools, well-honed commercial strategies, group notoriety, etc.

Moreover, if the hotel chains (Accor Hotels, Louvre Hotels Group, etc.) only represent 20% of the market, they are the ones with the largest accommodation capacity (they have more than one hotel room out of two ).

Step 2: Conduct market research

But 2020 was arguably one of the worst years for the hospitality industry due to the health crisis. The turnover of the sector fell by 45 to 70%, according to a study by KPMG .

The clientele of the hotels is made up of French and foreigners . Since the COVID-19 crisis, the tourism sector has been sluggish due to uncertainty related to the virus and travel limitations. However, there is no doubt that tourists will come back! Here, the important thing is to identify the requirements and expectations of your ideal client in order to offer him tailor-made services.

Market research also looks at your direct and indirect competitors. Of course, we are thinking of other hotels located in your geographical area, but also of rentals between individuals (Airbnb, etc.) and the development of lodges and bed and breakfasts. The various reservation platforms (Booking, Expedia, etc.) also eat away at the income generated by hoteliers because of the commissions they must pay to be referenced on these platforms.

Step 3: specify your hotel business

Here are some of the points to clarify to clarify your activity:

The price for one night: first price, inexpensive youth hostel, luxurious palace, family hotel…;

The hotel facilities: bar, spa, sauna, swimming pool, restaurant, gym…;

Opening up to more diverse audiences: room rental for conferences, business seminars, coworking space, etc.

The decoration and the atmosphere of the hotel : classic, arty, cozy, romantic, thematic…;

The comfort offered by the rooms: XXL rooms, balcony, hairdryer…;

A unique experience promised to customers: eco-friendly accommodation, hotel in the woods among the animals…

The choice of these elements must be consistent with the results of your market research. Do not hesitate to differentiate yourself with a strong concept that will ensure better profitability.

Step 4: plan the necessary investments to open a hotel

The investments needed to open a hotel are huge! We recense :

The construction, purchase, takeover or rental of the hotel by means of a commercial lease ;

To ensure the profitability of the hotel, the indicator to be monitored carefully is the room occupancy rate . The higher it is, the better!

The average cost of building a hotel room varies between €40,000 and €200,000 (to be multiplied by the number of rooms envisaged).

Step 5: choose the legal status of your hotel

In the overwhelming majority of cases, the choice of the legal status of a hotel is determined between the SAS (simplified joint-stock company) and the SARL (limited liability company).

Let’s see the main differences between these two legal structures:

President natural or legal person

Natural person manager

Responsibility

Limited to contributions

Limited to contributions

Manager’s social plan

Assimilated-employee

Assimilated-employee if the manager is a minority or egalitarian, self-employed if the manager is a majority

Taxation

Corporation tax (possible but temporary option for income tax)

Corporation tax (possible but temporary option for income tax)

Status of collaborating spouse

Secure and fixed legal framework

Step 6: write the hotel business plan

The business plan is absolutely essential if you want to open a hotel. It secures your project and allows you to build a solid project. A seriously written business plan will help you obtain the necessary financing for the opening of your hotel.

The business plan includes an editorial part explaining your project and a financial part. The latter is the most important for a hotel. It contains :

The provisional income statement which deducts your turnover according to your expenses and your income. Clearly, it gives an estimate of your profitability;

The provisional balance sheet which provides a photograph of your assets. It helps to ensure that the hotel does not have too much debt;

The table of investments which provides for the resources necessary to finance the investments. It smoothes the expenses to be made year after year;

Cash flow to manage cash inflows and outflows. He avoids finding himself without cash to pay his staff.

Make your business plan for free

Step 7: find out about the regulations for opening a hotel in France

To open a hotel, training is not an obligation but it will prove to be very useful for acquiring the basics of the trade. You can train in hotel management (BTS, DUT, etc.) or go through a school specializing in the hotel industry or a business school.

The “tourist hotel” classification ranging from 1 to 5 stars is completely optional for the hotelier, even if many hotels use it because it is known and appreciated by customers. This classification depends on various criteria (surface of the rooms, available equipment, etc.). If you wish to be assessed and ranked, you must register on the Atout France website .

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