How To Start/Open A Hotel Business In India

Introduction

Setting out to establish or develop a hotel business in India is an exciting undertaking with countless opportunities and the prospect of becoming a paradise for hospitality. India, one of the world’s most popular tourist destinations, offers a rich environment for business people looking to make a lasting impact on the vibrant hospitality sector. 

Establishing a hotel requires meticulous preparation and intelligent execution, from envisioning the goal to navigating regulatory environments and creating an unmatched guest experience. To illuminate the path for prospective hoteliers, this guide provides insights, helpful advice, and a road map for navigating the complexities of starting a profitable hotel business in India’s varied and dynamic landscape. There are many essential things that one must consider when starting a hotel business in India. You will find all the necessary details in this article. 

How to Start Hotel Business in India?

Lay down a concrete plan to start your hotel business in India. You would need to do a few things before your hotel is up and running.

1. Building Permit

Before opening a hotel and starting construction, you need land. To build a hotel on that land, you need a building permit. The Bureau of Indian Standards issues the National Building Code in India, offering a unique identity nationwide. All Municipal bodies, government departments, and construction agencies take the code as the building permit proof. Hence, it is a compulsory document to obtain before starting with hotel construction.

2. Establish a Market Need

Your next step for the hotel business should be understanding the market need, especially in your locality. You must be aware of what is happening in the hospitality sector in your area. You should also engage in market research and understand the competition. Look for answers to questions such as what your target audience is looking for. Is the demand outpacing supply? If yes, where? What is missing in the existing hotels in your locality?

Here are some more things to include in your hotel startup business plan market research:

• Type of property – Decide what kind of hotel you wish to open. You can choose between a five-star hotel, airport hotel, resort, or villa as your hotel.
• Size of hotel – Next, you must decide how many rooms you plan to build.
• Star rating – It depends on the amenities and services you plan to offer your guests.
• Location – Into the broader area, you must choose a specific area where you plan to open a hotel.
• Brand affiliation – Do you wish to be part of a bigger brand or start with your small venture? Going with a brand will save you with marketing, audience targeting, pricing, and other factors.
• Additional amenities – What facilities do you wish to include besides meals and rooms? These include pools, WiFi, wedding places, meeting rooms, etc.
• Guest demographics – Determine information about the type of guests that will come and stay. What are their reasons for visiting, and what services may they need? These answers will help create an effective marketing strategy for guests, such as families, couples, solo travellers, etc.

The above pointers will help you determine the competitors and your target audience. Once you have these, you can focus on other things that are closely related, such as budget, financing term loans, daily operations, and marketing. Hence, spending time researching is critical.

3. Creating a Strategy

This step is very crucial and will decide a lot of factors. You should create a hotel business plan or strategy showcasing your goals within five years of starting this hotel. It should include all information, such as goals, obstacles, challenges, SWOT analysis, and your plans to meet these goals. 

This hotel business plan should be short and crisp yet interesting for people to read and study. You will need this to present to your lender when you apply for a business loan. Most investors or lenders will decide only by looking at the initial information on whether or not to offer an MSME business loan to you.

4. Choose the Best Architect

In the development phase, your first step should be to decide on the architect of your hotel. It will be the first thing people will notice and admire if it is good. Your ideal approach should be working with experts or professionals with experience designing hotel architecture. A better idea would be to go with someone who has local knowledge as well; it can benefit you in many ways.

5. Get Legally Registered

Once you have the plan and your hotel is in development, it is time to get legally registered. You must declare whether your business is a sole proprietorship, limited liability company (LLC), partnership, or corporation. If you form it under an LLC or corporation, you will not be personally held liable for any court and legal matters. Moreover, you can also gain different tax advantages.

6. Apply for a Hotel Loan

To start your hotel, you need financing, which you can get by applying for a hotel business loan. These loans are tailored for hoteliers, and operators to meet specific needs. Its primary purpose is to provide a working capital loan to help you manage your day-to-day expenses.  

These expenses include buying new properties, renovating the existing ones, purchasing equipment, hiring staff, and daily operational costs. These loans often differ from the various commercial loans available in the market. 

7. Complete Your Paperwork

Starting a hotel business will require you to complete a lot of paperwork. These will be insurance, regulatory, and legal paperwork that must be filled and in order. For this, you must consult with your legal, accounting, insurance, and operations team to determine what you may need specific to your area and locality.

You may have to take many other permits before you can start your hotel operations. In addition, there can be various licences, such as for serving alcohol and food. You will also need a certificate from the health and security department confirming the safety of your guests. All these documents are necessary and required for all businesses including hotels.

How Much Investment Needed to Start a Hotel in India?

The cost of opening a hotel in India will depend on many factors, such as the area, size, services offered, and quality. Besides these, there will be the cost of acquiring land, construction charges, legal fees, furnishing prices, and much more.

Depending on what kind of hotel you wish to open and where, you can apply for a business loan in India with different nbfc, such as Flexiloans. 

Benefits of Applying Quick Business Loans with Fintech Companies

Although you can always approach a bank for your business loan needs, Fintech companies, such as Flexiloans, can also offer you a loan that can meet all your requirements. Here are some advantages:

• Personalised credit solutions
• Quick processing of your loan
• Business loans without collateral
• No hidden charges
• Easy repayment options
• Good liquidity flow
• Fast and easy application process

Are Hotels Profitable in India?

As of today’s date, the hotel business is the most eye-catching and profitable business in India. You will indeed need a lot of investment for the hotel business, but if you plan everything properly, such as arranging a loan for the business, you will not face many problems. However, remember there is much hard work before you see the profits.

Moreover, you need the right expertise, knowledge, and money (which you can get from taking a business loan) to start a hotel in India. To be profitable, you must hire the best staff and management team, choose the best location, offer the best services, and display the best behaviour. After all, besides the area, it is how you treat your people that will make all the difference.

Final Thoughts

Now wrapping up the tutorial on launching or operating a hotel business in India, remember one critical component of success: funding. As you embark on this thrilling adventure, consider FlexiLoans’ creative ideas for effectively securing the required funds. With its customised finance solutions, FlexiLoans is aware of the particular opportunities and problems the hospitality industry faces. When financing startup costs, growth, or unforeseen difficulties, taking advantage of their flexibility can be wise. In India’s varied and dynamic landscape, you may make your dreams of a successful hotel business come true with a solid plan, a dedication to excellence, and the appropriate financial partner.