You are currently viewing How To Start A Hotel In India

How To Start A Hotel In India


How To Start A Hotel Business In India

Hotel in India is one of the lucrative and best business ideas In India, as in India travelers inflows are expanding step by step because of the prime attractions here and assorted culture. Henceforth, lodging business can be one of the gainful organizations to begin.
A business foundation giving lodging, dinners, and other visitor services is a Hotel business In India. All in all, to be known as a Hotel in India, a foundation must have at least six letting rooms, no less than three of which more likely than not joined private washroom offices. In spite of the fact that lodgings are grouped into ‘Star’ classifications (1-Star to 5-Star), there is no standard strategy for doling out these appraisals, and consistence with standard necessities is deliberate.

Step 1: Find a market need.

The first and most important step when learning how to start a hotel business is to gain a thorough understanding of the hospitality industry worldwide, as well as in your location. To get started, find your favorite hotel news sources, then set aside time each day or week to stay informed. Once you have some familiarity with the industry, it’s time to dive into the market research for your hotel.

It is a great place to start business registration in India. It’s where you can read the latest news, thought leadership, and best practices from a wide variety of industry experts. The goal of your industry research is to get a clear idea of whether you can be competitive in your market. Also, what characteristics your hotel will need in order to succeed.

Rather than starting with an idea and making the research fit, try to find an area of need in your market. What audiences are underserved? Where is demand outpacing supply? What does your location need in terms of hospitality and accommodation?

To give you a good understanding of where you’ll fit in, your market research should include:

  • Property type: All hotels are not built the same. The industry is made up of resorts, spas, airport hotels, all-inclusives, hostels, boutiques, and many other property types. Determine what property type you plan to offer and what other options in that category exist in your location.
  • Hotel size: Closely related to your property type is the hotel size. How many guest rooms will you offer, and how does that compare to your competitors?
  • Star rating: What level of service and hotel amenities do you plan to offer?
  • Location: What region will you operate in? Is demand increasing in the area? What location amenities, like airports, beaches, or event venues, will you be in close proximity to?
  • Brand affiliation: Will you be a part of a larger brand’s umbrella? Being affiliated with a brand can help with marketing, business intelligence, pricing, and audience targeting.
  • Extra amenities: What services or amenities are important for hotels of your type and star rating in your location? Things like free Wi-Fi, meeting space, a pool, or wedding services are all important, depending on your target audience.
  • Guest demographics: How would you define the types of guests who may frequent your location? What is the purpose of travel, and what are some common characteristics of these travelers? Knowing whether you are targeting business travelers, families, couples, solo travelers, retirees, or other demographic groups will help you to craft your marketing plan and hotel concept.

[Also check our Article: How to Start a Rice Business in India ?]

Step 2: Craft your hotel’s strategic goals.

Once you have an understanding of market needs, you’ll need to create a smart solution to fill that gap. Your unique combination of amenities, concept, decor, marketing, location, and services can help you stand out from the crowd and capture market share if you approach it strategically.

  • Measuring and increasing customer satisfaction.
  • Creating a solid revenue management system.
  • Building a strong online reputation.
  • Attending at least one hotel industry conference.
  • Considering working with a consulting firm to bypass the common roadblocks new hotel owners face.

Make sure the needs of the market and your target audience, along with your business needs, help determine your goals. This will ensure that everything you do helps your customers, as well as your bottom line.

Step 3: Run the numbers

With your goals and plan in place, it’s time to run the numbers to make sure you’ll be profitable. A basic overview of hotel finances will help you hire the right revenue manager and sales team later on. The two key areas to focus on are profitability and any external factors that may affect your hotel business. You’ll also need to estimate initial costs for your hotel business. This includes startup and hiring costs, licensing, permits, construction, renovations, and your first year of operations.

Set up a few scenarios in your forecasting to see how key decisions affect the potential profitability of your business. For instance, do you want to buy or build? Buying into a franchise or taking over an existing hotel building has lower startup costs, unless you have to renovate extensively. But it also requires you to establish your new hotel identity, which can be a challenge depending on the current state of the business. On the other hand, building a hotel, while usually considerably more expensive upfront, can provide a solution to a lack of available buildings and can be more lucrative in the long run.

[Also check our Article: Start a Jewellery Business in India]

Step 4: Review financing options for your hotel business

Once you decide on the right financial plan for your business, you’re ready to fund it. There are a number of available options for financing your hotel business.

With traditional credit lines, you receive financing based on long-term assets. These are things like real estate owned by your hotel as well as cash flow projections and calculations submitted during underwriting. Lenders review these assets before awarding your loan.

With specialty credit, you’ll receive financing or credit lines based on near-term assets. This might be hotel equipment or invoices from accounts receivable. The idea is these backings are more liquid than what’s needed in traditional lending.

Step 5: Do your paperwork

There are many important legal, regulatory, and insurance requirements to fulfill in order to establish any new business. Your hotel business is no different.

Consult with your legal, insurance, accounting, and operations teams to determine the requirements for your location. At a minimum, you’ll need to set up a business structure and get business insurance. You will also likely need building or renovation permits, hotel licensing, and licensing for serving food and alcoholic beverages. There will also be a number of health and safety requirements as you complete your building or renovation process.

Contact us Now for

FSSAI State License | Central FSSAI License

FSSAI Registration | FSSAI License Renewal

Step 6: Hire and train your hotel team

A business is only as good as the team members that contribute to its success. By hiring great employees at all levels, you’ll set yourself up to deliver value to your guests and become a market leader.

Many hotels opt to hire for executive and departmental positions first, setting the tone and direction. These leaders can then identify what they want to see within their teams and how many staff members they need. Each team should identify the roles and skills they’re looking for, as well as developing a plan to reach and source great new hires.

Make sure that your application and interview processes are easy for candidates so that you don’t introduce needless friction. Find ways to communicate your core mission, values, and approach to this new business throughout the hiring process. This will help you attract candidates who share your vision. [Also check our Article: Setting up an E-commerce business in India]

Step 7: Draft a marketing plan

You’re now ready to share your hotel concept with the world. Well in advance of opening, you’ll need to spread the word and set yourself up for a profitable launch.

Your hotel marketing plan is an important part of your overall business strategy. It guides your decision-making on decor, daily operations, communications, customer service, and more.

Step 8: Launch your hotel business

At this point, you’ve put in the work to open a profitable and high-quality hotel business for your market. You’ve got the plan and the team to make your vision a reality. Now it’s time to launch.

The goal of your launch is of course to introduce your hotel to guests. But it’s also a great opportunity to introduce yourself to the local community, key stakeholders, influences, and potential partners. Put your best foot forward with these audiences by planning a grand opening event that reflects your mission and values.

[Also check our Article: How do I start a spice export business in India?]


Kanakkupillai is your reliable partner for every step of your business journey in India. We offer reasonable and expert assistance to ensure legal compliance, covering business registration, tax compliance, accounting and bookkeeping, and intellectual property protection. Let us help you navigate the complex legal and regulatory requirements so you can focus on growing your business. Contact us today to learn more.