You will have to do a thorough market research and perform a feasibility study. Having opened various hotels we have noticed that many entrepreneurs make decisions based on assumptions when it comes to their new hotel concept.
Business Sources What creates the demand in your market? But also go on the website of nearby airports, it will provide you with interesting statistics in terms of passenger data. However in reality, as hotel markets are driven mostly by dynamic rates which fluctuate with demand a bit like the stock marketyou will find your hotel out-priced by competitors in low season So, how to prepare and avoid these kind of situations?
They are specialized in collecting hotel market performance statistics and trends. These are all questions that need to be answered. We differentiate competitors in 2 groups. Based on our hotel management experience we have put some pointers on paper Why do travelers come to your destination?
Especially if you have raised capital investment from banks or other lenders, this put you in a difficult predicament, as it might not be possible to pay off loans in the time frames agreed, or ROI will not reach the expected levels. What is the motive of their trip? You need to understand your sources of business and market segments to be able to make a Hotel research marketing plan.
HotelScienz by Xotels Get a Demo!! The assumption to simplify operations and include breakfast in the room price in order to save on operational cost is understandable. And second, there are proximity competitors that are in your immediate surroundings and this will be your local competition.
You need to obtain statistics on occupancy, average rate, revenues of the surrounding area of your hotel. However we stud the market we uncover that all competitors offer room only rates, especially in city destinations.
Offering room only prices does not fit in their cost structure and PnL forecast, as staffing numbers need to be kept low.
First we look at conceptual competitors that have a concept which is similar or comparable to yours in essence. Competitive Analysis Next step, you need to make a detailed overview of your competition. Pressure will subsequently mount to make other changes to your concept to recuperate and offset the additional costs.
Especially if you require outside investment you will need to demonstrate you have done a feasibility study for your new hotel concept.
But you have to ensure that it is sustainable from a commercial perspective as well and benchmark your idea against the market. If you get data for the last few years of similar hotels in your market you will get a good idea of how the market is evolving, giving you a rough perspective of what kind of overall results would be possible.
Another classic example is hotel companies that want to enter the market with a flat rate structure. Start with building a summary outlining in detail: It will also be helpful for yourself to put your ideas on paper and benchmark them against the market to determine the chance of success.
You will attract a lot of consumer attention offering such transparency. This would put a hotel a significant disadvantage, and make the hotel less competitive as price among the key selection factors by consumers.
Such changes might even affect the uniqueness of your original concept, but you will have no choice but to compromise and please investors.
A typical example we face is that operators would like to save on staffing cost by selling rooms at rates including breakfast. You local tourist organization or visitors bureau will have probably be able to provide you with valuable market statistics.
In essence from a positioning perspective it sounds great. Where are they coming from, or rather, what are you feeder markets?
You can obtain data like this from researching the internet as many data is published in press releases. This could be very dangerous as any unforeseen change you might have to implement at a later stage due to a false assumption could bring with it additional costs that will have a negative impact on your bottom line.The School of Hotel Administration Center for Hospitality Research works with businesses in the industry to gather and share important information.
Reserve a stay at our Sheraton Imperial Hotel Raleigh-Durham Airport at Research Triangle Park with free Wi-Fi in Durham to help you /5(23). Hotel data benchmarking for + million hotel rooms worldwide with the STAR Report from STR Global.
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We have written thousands of articles about all aspects of hospitality, including hotel valuations, investing, lending, operations, asset management, and. To validate your new hotel concept or idea, you must do thorough market research and perform a feasibility study and analysis/5().
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