| Starting even the simplest hotel or inn is a venture that | | | | must check with the zoning authority yourself and see |
| carries with it a high amount of risk. Here are four top | | | | the zoning in writing. Your plans can be doomed from |
| mistakes to avoid when opening a hotel business. | | | | the start if you are not zoned correctly. |
| Mistake 1: Not Raising Enough Capital | | | | Mistake 3: Failing to Seek Professional Help |
| A hotel owner generally purchases the property of the | | | | Hotel entrepreneurs should consider using the services |
| hotel, and the down payment alone may be substantial. | | | | of an expediter - an experienced professional who |
| Factor in all of the additional costs before you can | | | | knows the local government's ins and outs and will |
| invite a guest inside - renovation, HVAC, electrical, | | | | pursue attaining all of the proper licenses and permits |
| plumbing, computer systems, initial marketing, and | | | | on your behalf. Consider the references and |
| supplies. Then, without good, conservative projections | | | | experience of such a person carefully. Only if you plan |
| of your costs and revenues over the first year, hotel | | | | to open multiple hotels do you have a good reason to |
| owners can still fail to have enough cash on hand to | | | | learn permitting yourself and forgo an expediter. In |
| see them through the early growing pangs before | | | | those cases you may quickly move up the learning |
| room occupancy rises enough to cover costs. Don't let | | | | curve after your first hotel or two, saving money in the |
| this happen to you. Asking your investors for more | | | | long run. |
| help a few months after opening shows them that you | | | | Mistake 4: Getting the Insurance Wrong |
| didn't understand the business to begin with. They will | | | | People sometimes get injured in hotels. As such, you |
| likely make you pay for the mistake by taking a | | | | need to make sure you get the appropriate insurance |
| greater percentage of the business, saddling you with | | | | for your hotel. You need to make sure you insure the |
| much higher interest rates, or even replacing you with | | | | hotel itself and any additional property owned by the |
| a new manager. | | | | hotel. In addition to property insurance, you will need |
| Mistake 2: Failing To Check The Zoning | | | | liability insurance for customer and workers |
| Before any work begins you must know that the | | | | compensation insurance for employees. Since |
| location you desire is properly zoned for a hotel. Don't | | | | insurance expenses for hotels can be significant, be |
| simply follow the word of the owner who wants to sell | | | | sure to shop around for the best rate. |
| you the land or lease you the building. To be sure, you | | | | |