How to start the hotel business in India

Post by : Mr. Maneesh Post on : 27/10/2020

The hotel business is one of the most lucrative business options in India. The reason behind it is the constant increase in the influx of tourists from different parts of the world. India, which is the country know for its ecstatic diversity, enthralling culture, and enticing tourist attractions, has been able to magnetize people around the globe. At the same time, a huge inclination of people towards travel and tourism has been reported in the recent past. All this has made hotel business a wonderful option in India to exploit.

If you are giving it a serious thought, we are here to guide you in all the ways possible. So let’s get started!

What is hotel business? 

Hotel business is set up with the aim to provide boarding and lodging facilities to the travelers. A commercial building with at fifteen letting rooms that charge money from the visitors to stay is a hotel. It can be a standard multi-unit building or stand-alone luxury villas.

Apart from knowing what a hotel is, there’s a lot more to understand if you want to do hotel business in India. Below is a simple guide that will help you to learn how to plan out your hotel business, perform its registration, and execute legal compliance, and lastly advertise and promote for its smooth run.

Learn how to start hotel business in India with these six steps.

Step 1- Conduct market research

Some areas of the country are a potential hub for a successful hotel business. Since India is one of those countries that comprise cultural heritages and tourist attractions in almost every city, opening a hotel will never be an unprofitable deal. However, selecting the business potential regions and the regions that are the hub of tourists will help you draw more profit. It is advised to conduct a market survey within 10 km of the hotel location. At the same time, know the rivals of the area and their mode of operations.

Step 2- Planning and Strategizing 

If you want to be a successful entrepreneur, there has to be a clear plan. A right plan helps you to strategize perfectly that will rule out the possibilities of risks and uncertainties of business failure. Here are a few points that you must take into consideration-

  • Cost of the startup– A substantial cost comes in the initial phase when you start a hotel business, whether it’s a small, six-room homestay or a mega hotel with hundreds of rooms. Capital is required for land acquisition, purchase of furniture, equipment, etc., salaries of employees, and fulfillment of licenses, permits and registrations. In a nutshell, a good sum will be required for starting the hotel business. However, the cost may vary depending upon the quality of products and materials you are using. At the same time, insurance, advertising, website development, and services like internet facilities will add to the total cost.
  • Target Market– The target could be a person looking for a room overnight or a traveler coming from the other part of the world and want to stay for a week. You should keep in mind the local travelers and people coming to the city for business or meetings as well. At the same time, there could be people coming with family, in a couple or single. Based on your target market, you have to plan and strategize your hotel business.
  • Break-even time– How much money you will make rely on the profits you are making from your business. In general, the hotel owners pay themselves a standard amount, and the rest is used in the maintenance of the amenity. The amount you will be charging from your visitors depends upon certain factors like-
  • Where the hotel is located- tourist hub, commercial location or hill station.
  • What type of hotel it is, typically based on star category
  • Which room the visitor is choosing- standard, luxury or suites
  • What are the standard rates of hotels in your city

Apart from these, there are times when you can shoot up the prices of your rooms, especially when there is a weekend around the corner, holidays, festivals, or preferable season to visit your city. Long weekends, for example, are the best time to hike the rate. Sometimes increasing the price by the triple of their normal has been seen giving a huge profit.

  • Naming– For strategizing the promotion of business, advertising, and marketing, it is important to choose the right name. Before coming to a name, you must check its domain availability. Since this is the digital era when most of the bookings are made online, a powerful web presence can do wonders in promoting your hotel business and get more visitors. If the domain is available, register it as soon as possible and create social media accounts as well. Additionally, create a professional email account which will be like

Step 3- License and registration 

Getting a license and doing the entire registration formalities is one of the important steps while starting a new hotel business. Most of the licenses and registration processes are categorized based on the type of hotel you are willing to open. For instance, if you want to have a bar in your hotel, you need to have a specific license for that.

Furthermore, there are specific rules and regulations that differ in every state for obtaining the license for the hotel business. There are certain licenses that are required before starting the hotel, and some need to be renewed every year.

Along with these, you need to verify the services like fire safety permit, building permit, elevator, etc. from the officials of the concerned department. Absence of these essential licenses, registrations, and permits may result in a hefty fine and, in stern cases, may even shut down your business.

With us, you can get detailed information about the different licenses and registration needed to start and operate a new hotel business. We provide the new entrepreneurs a complete guideline for the smooth functioning of a hotel business.

Step 4: Define your brand

Branding your business is an essential step. It shows how our business is perceived by the public and how much they satisfy with your brand. Hotel business experiences high competition, especially if you are establishing it in a tourist hub area. Therefore, it is important to have a strong brand that will help your business to stand out from the competitors.

Step 5: Make your presence in the web

Today, in the world of the internet, it is vital to have a strong web presence. People know about your hotel majorly through the internet only if you have an appealing business website. It helps the visitors know the products and services you offer them.

Along with a business website, it is equally important to use different social media platforms and enlarge your reach. Exploit your social media accounts to attract new clients and customers. It makes a significant effect on making profits from the business.

Step 6: Promoting, advertising and marketing the hotel business 

Promoting your business is very important, especially online, which can be done through advertising. Travelers around the world look for the best hotels that suit their areas of interest as well as budget. Gone are the days when it was done through newspapers, radio, and television. In this era of the internet, you have to boost your business either by paid ads or organic content to get ranked in the search engine.

Along with this, you can allure the customers by offering lucrative discounts and offers and promote them through social media. You have to make a good investment in the marketing of your hotel business so that it becomes the center of attraction for visitors around the world.

Final Words

The profit-making potential of the hotel business is huge. However, at the same time, this profit depends upon a number of factors. With time, you need to grow your business and expand it to the second and third locations. Another way of increasing profits and getting more success is franchising the business. Later, you may also provide educational courses to other hopeful hotel owners and teach them how to succeed in the competitive hotel industry.


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