While Nik Bhakta was young, her parents were running a restaurant. Together with his siblings, he worked every day to care for guests, maintain the building and manage the paperwork. Since then, Nik has learned much about the hotel industry. He gained extensive experience, which secured him a position at Chalak Mitra Group of Companies. However, his focus shifted from working in the hotel to acquiring acquisitions and portfolio management.
Are you planning to set up or buy a hotel? Nik Bhakta shares things you need to consider before making a step.
- Market segments
The hotel industry is generally divided into different criteria. Here are the classification criteria you need to consider concerning market segments;
The first segment is whether they provide full or limited services to guests.
The state, city, or whether the hotel is in a metropolitan area
Also consider factors such as average room rates and several rooms, whether independently owned or part of a chain. Understanding these segments and carefully considering which best suits your goals is wise.
Hotel location is everything. Avoid making decisions based on emotions—you may like a particular spot, but it may not fit the hotel step up. You must consider the average room rates. If they’re relatively low, it time a bit longer to recoup your investment; higher average speeds, on the other hand, will likely produce higher revenue streams.
- To build or acquire
Hotel construction may not be for the faint-hearted soul. It may get difficult if you have little to no experience in construction or real estate development. Therefore the most appropriate option for you will be to acquire. You’ll make little capital investment and start recovering your investment in a shorter time, unlike construction, which may take time to complete and will most likely have your budget stretched if not broken.
- Understand the market
Another essential thing to taking the plunge into hotel ownership is researching the market. Are the hotels in the area running at high occupancy rates, or are they struggling? What’s the best price for a night’s stay. Are more guests booking rooms in luxury hotels? Are they more apt to book at a budget hotel? Don’t forget to consider the average volume of tourists and business travelers and the average length of stay.
According to Nik Bhakta, the above tips can make you good in the hotel industry. Do not fumble or go blindly, do your due diligence and ensure you’re willing to take the risk. Eventually, there are great rewards for you to reap, both financially and personally. Go for it and have fun exploring the hotel industry.