hotel business plan in south africa

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Hotel Business Plan

OK, so you have decided to realize your dream and become a hotel entrepreneur, so now you need to start writing your hotel business plan . You have thought out an amazing concept delivering unparalleled guest service. The next step would be to write a hotel business plan. It’s like a road map to the opening. However, as a seasoned hotel revenue management consulting and hotel management company , we have seen that this is where most entrepreneurs get stuck.

Why? Many do not have the time and don’t know what to write or how to do the financials. But until you finish your business plan, you will not be able to get the financing either. So you end up with ideas sitting in your head not realizing your dream.

Really it is not that difficult to make a good hotel business plan. It is merely a structured summary of your idea. Most people try to include everything about their hotel concept in the plan. This leads to an indigestible super novel-like bookwork, aka a mess.

The key is, knowing what to include, and what not to include in your hotel business plan. Create a clear road map for success. Excite investors rather than bore them to death like most business plans full of redundant information do. And you need to lead readers down the exact path you want.

One of the main challenges for example is that after reading the first page most businesses often don’t fully understand what the hotel is all about. For investors and lenders, it is crucial they can quickly comprehend your plan, without reading the whole document.

Hotels 101: The Basics of Business Planning

We have put together a hotel business plan template to help you on your way. Check out our approach based on 10 critical points, being:

• Executive Summary
• Company Analysis
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Strategic Plan
• Operations Plan
• Management Team
• Financial Plan
• Key Milestones

Steps of your Hotel Business Plan

Let’s dive into the step-by-step checklist of what your hotel business plan should look like.

Infographic by Xotels

1. Executive Summary

This first part should consist of two main parts, being:

• Mission Statement (Introduction): a 1 line company description only the essence of your hotel (not 2 lines or a paragraph). It explains why you are in business or which huge need you are solving, that currently is not being met. For example in the case of Qbic Hotels “Moving modular hotels into under-utilized real-estate to reduce build-out cost and time.” 
• Objectives : What do you hope to accomplish (i.e. “Reach an annual occupancy of 90%”).

 2. Company Analysis

More detailed information on the USPs (unique selling points) of your hotel concept.

3. Industry Analysis

Information on the current industry trends and the current state of the market and how this will impact your hotel. This is needed as investors want to be sure you really understand the hotel industry. This acts as the foundation on which decisions such as trends and developments to follow will be based.  

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4. Customer Analysis

In-depth information on your target market, including geographic, demographic, socioeconomic, psychographic, and behavioural segmentation details. It can also help you to keep up to date with the latest hotel marketing trends to understand which are the types of guests who will be staying at your hotel. Explain which features will be meeting the needs and wants of these main segments when thinking of:

Basically, how will consumers answer this question ‘Why my hotel?’

Aim to break it up to the point value can be easily communicated (do not make it too overcomplicated). Think of the following examples:

• Psychographics: interests, lifestyles, personality, values, opinions, and attitudes
• Behavioural segmentation: purchasing behaviour, level of engagement, customer loyalty
• Demographics: gender, age, marital status and education
• Geographics: location (country, state, region, city)
• Socio-economics

Any of the above examples of hotel segmentation can, if described well, be of great value to your business plan. An example of this could be a hotel located in a beach town, where you should be able to describe how demographics and psychographics differ from summer to winter time. Especially, since this example is typically known for lower demand in winter which you could be compensating for with the right hotel marketing strategies on hand.

5. Competitive Analysis

A study of your local competition or global concept competitors, with each of their strengths, weaknesses, occupancy rates and market share ( SWOT analysis ). And don’t forget the most important part; what differentiates you from them. What makes you stand out?

Ask yourself: “can I add value to a specific area”, especially when it comes to hotel-dense areas like city centres or major destinations.

6. Strategic Plan

This exists of 3 parts:

• Marketing : How exactly will you attract customers/guests? How will you position yourself? What will your message be to the different segments of your business mix? How will your direct marketing work? What will be the plan for your hotel website, SEO, SEM and SMM? Will you do offline promotion? In short, your hotel marketing strategy should cover everything there is to know about how to market your hotel.
• Distribution : Which 3rd party channels will you use and how will you manage availability? What technology will you need?
• Revenue management : What pricing and yield techniques will you use? What will your payment and cancellation policies be? Which room types will you be selling, and how will they be individually marketed? How many revenue scenarios will I create? Where can I compensate income/demand streams when necessary?

Make sure you have the capabilities to plan out a strong marketing, distribution and revenue management strategy. 

Things get complicated rather fast, and choosing to outsource hotel and revenue management is likely to give you a strategic advantage, during the planning phase, and the execution of your business plans.

7. Operations Plan

How will you run your hotel? Think of the following elements:

• How many staff and supervisors will you need? 
• What are their job descriptions/responsibilities? 
• What background and experience should they have? 
• When should they start? 
• What are your service standards?
• Will you develop manuals?
• Which supplier will you use?
• How will you manage inventory?

8. Management Team

Include the bios of your team. Focus on what uniquely qualifies you to make your hotel such a success. Having a great team is the key to success , and stakeholders will be impressed with a thorough explanation of the added value everyone brings to the table.

9. Financial Plan

Provide the start-up costs of the hotel (capital investment), the ongoing business costs, operational expenses and revenue projections for the next five years. These figures should be always based on your Hotel Feasibility Study . The KPIs to look at include expected occupancy, ADR (Average Daily Rate) and RevPAR (Revenue per Available Room).

If you are raising money , outline how much funding will be needed and when. Explain how you will generate a return on investment for investors, or when lenders will be paid back.

10. Key Milestones

These are the most important achievements which once they have been completed, will make your hotel more likely to succeed. Think off:

• Location selection
• Permits & Licenses
• Build-out / Construction of the Hotel
• Staffing and Training
• GOP Break-even
• NOI Break-even

Each time one of the key milestones is achieved, the risk of lenders or investors decreases . And once your last key milestone is reached, the chance of success is more or less guaranteed.

11. Appendix

Provide any other relevant information here. Don’t clutter the main sections of your hotel business plan with too many details. Rather support them with attachments in this part.

Putting Your Plan into Action

Many people have great business ideas. But that really doesn’t matter. The difference between dreamers and entrepreneurs is the action mindset. Are you ready to ship your idea to the market? 

The first step is to put your ideas on paper. I hope this free sample will help you write a persuasive hotel business plan. Because no investor or lender will be interested if you cannot present a clear plan.

Follow your dreams and go for it!

Maximize Your Hotel Revenue

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Need help to Develop and Manage your Hotel Concept?

Our revenue management consulting experts at XOTELS have helped hundreds of hotels to develop and optimize their businesses.

With cost-effective implementations and best practices developed over years of experience, successful business for your boutique hotel, resort, B&B, aparthotel, hostel, or any other lodging concept for that matter.

Hope this template has helped you get inspired to start your own hotel business .

Best of luck in your endeavours!

Patrick Landman

PS. Get in touch with us if you need help developing and managing your hotel concept, and help bring your hotel to the next level with our hotel consulting services.

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From idea to execution: 10 sections to include in your hotel business plan

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By Lana Cook

Do you love connecting with people from all over the world who share your passion for travel? Don’t want to work a typical 9-5 job and instead want to build a business where every day is different, and you own your schedule?

Starting a hotel business is a dream many entrepreneurs have, but it can be a daunting venture to start. A hotel business plan is a critical first step for business owners to turn their dreams into reality. A strategic plan allows one to study the hotel industry, identify their hotel’s unique point of view, and outline how exactly they will reach their goals.

Read on to learn more about the ten sections to include in your hotel business plan, tips for creating an effective plan, and key things you need to start your new hotel business.

Ready to get started creating your plan? Download our hotel business plan template.

What is a hotel business plan?

A hotel business plan is a detailed document that identifies your business’s goals, objectives, and strategies for success. It includes market research and a roadmap for building and operating your business.

Why do you need a hotel business plan?

Studies show that entrepreneurs who finished their business plan were twice as likely to succeed in growing their business than those with no plan. A hotel business plan:

• Helps you identify whether you have a viable business idea
• Provides a detailed roadmap on what you need to accomplish and why
• Gives potential investors insight into your business idea and confidence that you can be successful
• Keeps you on track as you start to execute the different tactics outlined in your plan
• Identifies critical milestones for you and your team to reach

Your plan does not have to be static and should change over time as your business grows and evolves. Your first draft is a starting point to help guide your strategy and instill confidence in potential investors.

10 sections to include in your hotel business plan

Whether you’re starting a small boutique hotel, a cozy B&B, or a 5-star resort, you will need to address the following sections in your hotel business plan.

1. Executive summary

An executive summary is the most essential part of your business plan. It should concisely explain the purpose of your business and why it will be a success.

Include your mission statement explaining why your hotel exists and its overall goal. For example, Capella Hotels & Resorts ’ mission is to combine tradition, discovery, individuality, and twist of the unexpected to create the perfect stay for each guest.

You should also include your vision statement that clearly describes your hotel’s purpose for being in a single sentence. For Capella Hotels, its vision is to embody excellence in the craft of hospitality.

We recommend writing your executive summary as the final stage, as it should summarize the goals and objectives laid out in your plan.

2. Company analysis

Your company analysis is where you can dive into your hotel’s competitive advantage. Ask yourself what makes your hotel unique . Why would guests want to stay with you instead of your competitors?

In this section, identify your brand’s identity and the goals and objectives you want to accomplish. Outline how many rooms and room categories your property will have. For example, will you offer a hybrid hospitality model with dorms, single rooms, and suites? Explain what ancillary revenue sources you’ll offer, like in-room food and beverage options, welcome drinks, or airport shuttles.

Use storytelling to communicate your excitement and passion and make it clear what your hotel will bring to the hospitality industry that hasn’t been done before.

3. Industry analysis

As a business owner, you must be prepared for forces outside your control. You will need to conduct a market analysis that looks at the hospitality industry to identify micro and macro trends that may impact your business. Look at:

• Economic trends
• Environmental trends
• Political trends
• Global health trends
• Technology trends

For each trend, identify how it will impact your business and ways to mitigate risk or take advantage of opportunities.

For example, digital check-in technology has increased across the hotel industry with the rise of tech-savvy guests, new innovative software providers, and labor challenges. Therefore, consider what guest experience solution you’ll include at your hotel.

In addition to trends, look at the history of the hospitality industry, its current size, and how it’s expected to grow in the short and long term. This research will impact the rest of your plan, especially your marketing and financials.

4. Customer analysis

What type of hotel guests do you want to attract? It’s impossible to please every kind of guest, which is why it’s important to identify your target market . Once you know who you want to stay at your property, you can develop amenities, services, and marketing materials to attract these guests and deliver exceptional experiences .

Ask yourself:

• What type of guests do I want? Business or leisure travelers? Retirees or Gen-Z?
• What demographics? Age, gender, marital status, etc.
• What are my target market’s interests? Water sports, hiking, relaxation, museums, etc.
• What does my target market value? Sustainability, contactless technology, personalized service, localized experiences, etc.

This section will help you formulate the guest experience to ensure that expectations meet reality .

5. Competitive analysis

The competition you face will vary depending on where your hotel is located. In this section, you should conduct in-depth competitor research to understand how your hotel will compare. Identify your five major competitors — ideally, three direct competitors you will be competing with upon opening and two aspirational competitors you can emulate as you grow your business.

Conduct a SWOT analysis based on your competitors to look at:

• Strengths . Where does your property excel in comparison to competitors? Why would travelers pick you? Price, amenities, location, technology, etc.
• Weaknesses . Where does your property fall short in comparison to competitors? Price, amenities, location, technology, etc.
• Opportunities . What industry trends can you take advantage of? What local events or partnerships can you capitalize on?
• Threats . What are the biggest threats facing your property? War, travel restrictions, recession, etc.

A thorough analysis can help solidify your competitive advantage and develop a contingency plan for how you will deal with your weaknesses and threats.

6. Marketing plan

Without demand, there is no business. A hotel marketing plan outlines the channels you’ll use to reach your target audience to drive bookings. Your marketing strategy should include three key channels:

1) Paid media . Paid advertising to promote your property and drive bookings. This includes online travel agencies (OTAs) , search engine marketing (SEM), retargeting, and metasearch advertising.

2) Owned media. The content  you create, like your hotel website , social media channels, blog posts, and SEO.

3) Earned media. User-generated content created by third parties like media coverage or online reviews.

7. Operations plan

How do you plan to run your day-to-day operations? This section of your plan will outline all of the key tasks and responsibilities of your team and what exactly your hotel will offer. Consider:

• The number of staff and supervisors required
• Job descriptions and responsibilities
• Your service standards (check out our downloadable SOPs for some inspiration)
• How you’ll manage your inventory
• What hotel technology solutions will you need? PMS, channel manager, booking engine, payment terminal, revenue management tools, guest engagement software, etc.
• What services and amenities do you want to offer? Room service, bar, restaurant, pool, spa, wellness center, etc. 

Detail your short and long-term operational plans and the stakeholders involved for each area.

8. Management team

Whether or not you’ve hired your team yet, this is one of the most important sections potential investors will look at. Make sure to outline the key personnel you will require and their roles. 

In general, these are the following roles you’ll want to outline:

• Hotel management (general manager, front office manager, housekeeping manager, maintenance manager, revenue manager)
• Hotel sales team
• Housekeeping staff
• Front office staff
• Maintenance

Depending on the size of your hotel, your team will vary. Identify the team members you need to open and your hiring plans over the next five years.

9. Strategic plan

Hoteliers must be strategic in optimizing occupancy rates across seasons to maintain revenue. As part of your strategic plan, identify how you will manage:

• Pricing – what room types will you offer, and how will the pricing vary?
• How will you maintain consistent occupancy throughout the high and low seasons? Will you adapt your pricing and marketing strategies?
• How will you conduct revenue management ? What type of rules/alerts will you use to adjust rates? Will you use technology to help with revenue management?
• What will your online reputation management strategy be? How will you collect and respond to online reviews?
• What will your distribution mix look like? How will you drive reservations across a variety of channels?

10. Financial plan

Your financial projections are the most challenging but arguably the most crucial part of your hotel business plan. In this section, you should include the following:

• Start-up costs. How much money will you need from lenders to operate your hotel? Consider business licenses, furniture, down payments, etc.
• Operating costs . How much money will you need to keep your business running? Consider staffing costs, guest acquisition costs, mortgage payments, utilities, SaaS payments, etc.
• Income statement . What will your revenue, expenses, and profit be over the first 3-5 years of business?
• Cash flow projections . How will cash flow in and out of your business? Show what capital investment you’ll need to start.
• Balance sheet . Identify your assets, liabilities, and equity.

If you’re looking for a potential investor, your financial plan will be the section they care about most. Here, you must prove how your business will provide a return on investment. Don’t forget to include an Appendix that shows more detailed reporting and financial figures.

8 tips for creating an effective plan

1. Start with the section that excites you the most! Covering all the topics outlined above can feel overwhelming, so don’t feel pressured to go in order.

2. Reach out to a business owner you admire. No matter what type of business you’re starting, getting advice from another business owner is always helpful. Reach out to a successful local business owner to see if they’d be willing to share some insights they learned along the way.

3. Be concise. While there’s a lot to cover, you must be concise in each section of your plan. Include any additional research or documentation in the appendix to keep your business plan clean.

4. Try to avoid industry jargon. Depending on what type of investor is reading your plan, they may find jargon irrelevant and distracting.

5. Ensure you have a clear competitive advantage. You should be able to state in one sentence what makes your property unique. This unique selling point (USP) will be prominent in all of your marketing materials.

6. Set SMART goals. Setting specific, measurable, achievable, relevant, and time-bound goals is important to stay organized and on track to reach milestones.

7. Don’t forget about your plan. You will have spent hours developing your plan, so make sure you use it! Reference your plan as you build and grow your business , and remember that it’s ok if things change.

8. Illustrate your passion. Communicate why you want to be a part of the hospitality industry. Passion is contagious and gives investors more confidence that you will work hard to achieve your dreams.

What do you need to start a hotel business?

Ok, so you’ve read through this article and are now wondering — what’s next? Ensure you have the following items on your radar to start your business.

• A vision. Know exactly what kind of business you want to build (a quaint bed and breakfast is very different from a large-scale resort).
• A business plan. Stay on track with a well-developed business plan.
• A location. Decide if you want to build a new property or renovate an existing hotel.
• Capital. Do you need to raise an upfront capital investment? Remember that new businesses usually aren’t profitable for the first few years and will need cash flow to pay for expenses.
• Business licenses & permits. Depending on the type of property and its services, you’ll need an occupancy permit, alcohol license, food service license, sales tax license, etc.
• Technology. Choose technology to help streamline operations and earn more revenue.
• Furniture & equipment. You must furnish your property with the proper furniture, electronics, appliances, etc.
• Staff. Take time hiring staff you can trust and who understand your hotel’s brand and vision.

Final thoughts

Your business plan provides the foundation for your new business and outlines the next steps in the journey. Ensure you fully understand the market and competitive landscape to enter the industry prepared for the future. Start slow and invest in the right people and technology to support the growth of your business.

Looking to start a hotel? Download the technology guide. Download now

About Lana Cook

Lana Cook is a Content Writer at Cloudbeds where she is able to combine her love of writing and passion for travel. She has spent the last few years writing about all things technology and the ways in which it can be used to help businesses thrive. When she’s not busy writing, you can find her checking out the latest movie or searching for a new TV show to binge.

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How To Start A Hotel Business In South Africa

The hotel dream is still alive and well in today’s world where anyone can open a hotel by listing their property on Airbnb, but because of the global pandemic, it is now more crucial than ever for aspiring hoteliers to be careful and methodical when beginning their business ventures. It’s never been easier to make that dream of opening a new hotel business a reality, despite the difficulties we are currently facing due to the pandemic!

Decide on property acquisition

Your first choice is whether to purchase an existing hotel or build a new one from scratch. We asked our hotel owners if they would rather build a new hotel or purchase an existing one for their next property 72% of respondents said they would rather construct a new one. We were surprised by this as construction is generally riskier and more expensive.

Analyze the information to establish feasibility

Checking the numbers comes next after deciding whether to buy or build. The statistics will show you how much money you’ll require, how much that capital will cost, when it will become profitable, and what the potential benefits are for you as the operator, owner, or investor.

Make a business plan for a hotel.

Making a hotel business plan is now necessary since you have a handle on your financial forecasts. This is the strategy you’ll use to introduce, market, and run your new company. Without Even with a compelling strategy, getting financing will be extremely difficult, especially if you approach established institutions like banks, which have stricter standards.

Create a distribution strategy and online presence for yourself.

When you reach this point, it signifies you’ve obtained money and are advancing toward developing your own line strategy for expanding your enterprise. both exciting and scary.

Pre-Opening Techniques

Differentiating on experience becomes increasingly important as more establishments and brands enter an already crowded market. Delivering an exceptional guest experience will ensure that your new property stands out in a crowded market and will earn great reviews.

Throw A Fantastic Opening Party.

It’s finally time to celebrate your accomplishments with an opening party! With friends, family, coworkers, investors, and influencers who can help your hotel open, this is undoubtedly a moment worth celebrating.

Having a small, private “soft opening” party for friends and family is one way to debut. This gives you the chance to explore the area and acquire a sense for doing events there. Then, once the wrinkles are worked out, you throw a “official” launch party with influencers, VIPs, and locals in attendance.

What qualification is most essential for a hotelier?

To successfully manage a diverse hotel crew, you must possess the common touch. Working well with individuals from diverse backgrounds is necessary for hotel owners from  all walks of life. You won’t only work with people who are like you on your teams. even of individuals who are somewhat on your wavelength. In actuality, uniformed teams would be useless! Therefore, the ability to act as a connector between various groups of people, to comprehend their needs, and to be open-minded is the most crucial trait a hotel owner must possess. Ultimately, diverse teams produce the best outcomes!

Are hotels profitable in South Africa? In 2018, South Africa’s hotel room revenue totaled about 16.71 billion South African rand. Is operating a hotel expensive? The hotel industry is not a cheap one. Maintenance charges another significant category of recurring costs for hotels. After all, hotels are substantial structures that need ongoing maintenance to stay in good condition.

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How to Start a Lodge Business in South Africa

In this article, we detail how to start a lodge business in South Africa. The hospitality business is one that many wish to get into. If you have the entrepreneurial spirit and a passion for hospitality, opening a lodge can be a great venture. We will now explain how to go about that and everything that is required to start a lodge.

First thing to consider what type of lodge to start. Let’s start with the different types of lodges that you can open.

Table of Contents

Different types of lodges

There are several different types of lodge businesses, each with its own unique features, target market, and business model. Some of the most common types of lodges include:

• Wilderness lodges: These lodges are located in remote or wilderness areas and offer guests a chance to experience nature and adventure.
• Eco-lodges: These lodges prioritize sustainability and environmental protection, and often offer unique and eco-friendly accommodations.
• Boutique lodges: These lodges offer a small number of rooms or suites and cater to a high-end market, with a focus on luxury and personalized service.
• Adventure lodges: These lodges cater to adventurous travelers and offer activities such as hiking, rock climbing, and white-water rafting.
• Wildlife lodges: These lodges are located in areas with abundant wildlife, and offer guests the opportunity to see animals and participate in wildlife-watching activities.
• Cultural lodges: These lodges offer guests the opportunity to immerse themselves in local culture, with a focus on local customs, traditions, and experiences.
• Family-friendly lodges: These lodges cater to families with children and offer a range of family-friendly activities, facilities, and services.

These are just a few examples of the different types of lodge businesses. The type of lodge business you choose will depend on several factors, including your target market, location, and resources. It’s important to choose a lodge business that fits with your skills, interests, and goals, and to research the market and competition to ensure that there is a demand for your type of lodge.

How to start a lodge business in South Africa

To start a lodge business in South Africa, consider the following steps:

• Conduct market research: Before starting any business, it is important to conduct market research to determine the demand for your product or service. In the case of a lodge business, you need to determine the market demand for lodges in your area and the target audience. This will help you understand the competition and the demand for the type of lodge you plan to open.
• Create a business plan: A business plan is a roadmap for your business, outlining your vision, goals, marketing strategies, operational plan, and financial projections. It should also detail the start-up costs, marketing and advertising strategies, and any additional funding requirements. A well-written business plan will help you secure funding from banks or investors and ensure the success of your business.
• Register your business: Once you have a business plan, you need to register your business with the Companies and Intellectual Property Commission (CIPC) and obtain all necessary licenses and permits. This will ensure that your business is legally recognized and operating within the law.
• Secure funding: To start a lodge business, you may need to obtain financing from banks or investors. You will need to provide a business plan and financial projections to secure funding. You can also consider alternative funding options, such as crowdfunding or grants.
• Choose a location: Select a suitable location for your lodge based on your target audience and the availability of resources like water, electricity, and transport. Ensure that the location is accessible and has good visibility to attract customers.
• Build or renovate the lodge: Construct or renovate the lodge to meet the required standards and ensure that it is equipped with all the necessary facilities, such as a kitchen, dining area, bedrooms, bathrooms, and recreational facilities. Consider the environmental impact of your business and ensure that it is sustainable.
• Hire staff: Hire experienced and skilled staff to help you run your business, including managers, cleaners, and security personnel. Provide adequate training to your staff to ensure that they are equipped to provide excellent customer service.
• Market your business: Develop a marketing strategy to attract customers and create awareness about your business. Consider online and offline marketing options, such as social media, brochures, and local advertising. Offer promotions and discounts to attract customers and build a loyal customer base.
• Start operations: Once all preparations are complete, you can start operating your lodge business. Ensure that you have systems in place to manage bookings, payments, and customer service. Continuously monitor and evaluate your business to identify areas for improvement.

Note: The specific requirements for starting a lodge business in South Africa may vary based on the location and type of lodge.

Benefits of starting a lodge business

There are several benefits of starting a lodge business in South Africa, including:

• High demand: The tourism industry in South Africa is growing, and there is a high demand for lodges and other accommodation options. This creates opportunities for entrepreneurs to start a profitable business in the industry.
• Flexibility: Running a lodge business allows for flexibility in terms of operating hours and the type of services offered. You can choose to run your business as a full-time or part-time operation and offer a range of services to meet the needs of your customers.
• Potential for growth: The tourism industry is continuously growing, and with the right marketing and operational strategies, your lodge business can grow along with it. This creates opportunities for expansion and the potential for increased revenue.
• Independence: Running your own lodge business gives you the independence and flexibility to make decisions and create a business that aligns with your values and goals.
• Job creation: By starting a lodge business, you have the opportunity to create jobs in your community, supporting economic growth and development.
• Potential for passive income: If you manage your lodge business well, you can generate a passive income, allowing you to enjoy financial stability and freedom.
• Opportunities for personal growth: Running a lodge business can be a challenging but rewarding experience, providing opportunities for personal growth and development.

Overall, starting a lodge business in South Africa can be a profitable and fulfilling venture, providing opportunities for economic growth and personal development. However, it is important to have a solid business plan, access to funding, and a thorough understanding of the industry to ensure success.

Risks of starting a lodge business

Starting a lodge business in South Africa, like any other business, involves some level of risk. Some of the key risks include:

• Competition: The tourism industry in South Africa is highly competitive, and there may be established lodges in your area that have a loyal customer base. You will need to find ways to differentiate your business and attract customers.
• Seasonal fluctuations: The demand for lodges can be affected by seasonal fluctuations, with some periods experiencing low demand. You will need to have a plan in place to manage these fluctuations and maintain a steady income.
• High start-up costs: Starting a lodge business can be expensive, requiring significant investment in building or renovating the lodge, purchasing equipment, and marketing the business.
• Regulatory requirements: There are several regulatory requirements that must be met when starting a lodge business in South Africa, such as obtaining licenses and permits, complying with health and safety regulations, and meeting environmental standards. Non-compliance can result in penalties and reputational damage.
• Staffing challenges: Hiring and managing staff can be a challenge, particularly in remote areas. You will need to find reliable and experienced staff and provide adequate training and support to ensure that they are equipped to provide excellent customer service.
• Dependence on tourism: The success of your lodge business will be heavily dependent on the tourism industry, and changes in the industry, such as economic downturns or changes in consumer behavior, can impact your business.
• Natural disasters and other external factors: Natural disasters, such as floods or fires, or other external factors, such as crime or political instability, can impact your business. You will need to have a contingency plan in place to manage these risks.

In conclusion, starting a lodge business in South Africa involves some level of risk, and it is important to be aware of these risks and to have a plan in place to manage them. It is also important to seek legal and financial advice to ensure that you are fully compliant with all the relevant laws and regulations.

What makes a building a lodge?

A building can become a lodge if it meets certain criteria, such as offering accommodation and providing services that cater to the needs of travelers. Some of the key elements that make a building a lodge include:

• Accommodation: A lodge typically provides rooms or suites for guests to stay in, with basic amenities such as beds, linens, towels, and toiletries.
• Dining facilities: A lodge may have a restaurant or dining area where guests can enjoy meals, and may offer a range of dining options, from full-service meals to self-catering facilities.
• Recreational facilities: A lodge may offer a range of recreational facilities, such as a swimming pool, fitness center, or games room, to cater to the needs of guests.
• Guest services: A lodge typically provides a range of guest services, such as concierge services, tour and activity bookings, and transportation services.
• Location: A lodge is typically located in a tourist-friendly area, such as a national park, beach, or other natural attraction, and may be located in a remote or secluded area.
• Design and aesthetics: A lodge should have an attractive design that complements its surroundings and creates a welcoming atmosphere for guests.

In summation, a building can become a lodge if it offers accommodation, dining facilities, recreational facilities, guest services, and is located in a tourist-friendly area, with an attractive design and welcoming atmosphere.

How much does it cost to build a lodge in South Africa?

The cost of building a lodge in South Africa can vary greatly depending on several factors, including the location, size, and complexity of the lodge, as well as the materials and fixtures used.

On average, a simple lodge can cost between ZAR 2 million to ZAR 5 million, while a larger and more luxurious lodge can cost between ZAR 5 million to ZAR 10 million or more.

It’s important to note that these estimates are rough averages and do not include other costs such as land acquisition, licensing, marketing, and operating expenses. Additionally, the cost of building a lodge can vary significantly depending on the region, with building costs in urban areas being higher than in rural areas.

It’s also important to seek professional advice and obtain accurate quotes from contractors to get a more accurate estimate of the cost of building a lodge in South Africa. Having a detailed budget and a clear understanding of the costs involved can help you make informed decisions and ensure that your lodge business is financially viable.

Is owning a lodge profitable?

Owning a lodge can be a profitable business if it is managed well. The profitability of a lodge depends on several factors, including the location, the type of lodge, the level of demand for lodges in the area, and the level of competition.

A well-located lodge that offers high-quality services and appeals to a broad range of customers is more likely to be profitable. To maximize profitability, it is important to have a well-designed and well-executed business plan, an effective marketing strategy, and an efficient operation that provides excellent customer service.

Additionally, it is important to understand the local tourism market, the costs involved in running a lodge, and the financial requirements of the business. By having a clear understanding of these factors, you can make informed decisions and manage your business effectively to ensure that it is profitable.

Overall, owning a lodge can be a profitable business, but it is important to have a solid plan in place and to be prepared to invest time and resources into the business to ensure its success.

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How To Start A Hotel Business In South Africa

South Africa has the top tourist destinations on African soil, and that is convincing enough to make a profit out of the hospitality industry, so in today’s guide, we are going to provide our readers with the necessary information on how to start a hotel business in South Africa.

Therefore, we strongly recommend you to keep reading because the next chapters of this guide contain a discussion of how to start your hotel business.

South Africa sees a rise in the hospitality industry every year, and as tourist keeps trooping in and out of the country, there have to be enough hotels to host tourist.

So, it’s never a wrong decision to make to venture into the hotel business because it has a higher demand when it meets the standard to welcome and host guests around the world.

It’s time to start our hotel business journey in South Africa.

Table of Contents

What You Need To Start A Hotel Business In South Africa

To start preparation on commencing your hotel business plans, the following are some requirements:

1. Business Plan: your business plan is the basic foundation that determines your success and your failure, therefore building a good business plan that meets your financial capabilities is important

2. Location: your hotel location is key to your business success. Guests love a more central location, with easy access to transportation and other facilities

3. Business Registration: there’s the need to consult your local government to be briefed about zoning permits and building codes for hospitality

4. Target Market: try to understand what is making the successful hotel business players thrive high in the hospitality industry, get to know what customers want, and meet their satisfaction

5. Market Research: make intense market research by visiting successful hotel businesses around you, study what they are doing different, don’t copy what they do, try to formulate a new service out of theirs to be unique

6. Hotel Structure: think about your startup capital. After realizing your financial capability, go on to imagine the types of structure you can afford from the start.

Always think about starting small and growing big. It doesn’t take you to build a luxury hotel to be successful. Learning from your small hotel business can help you break into the luxury side of the business.

The number of rooms and its affordability are key in choosing a building structure for your hotel business.

7. Find an Architect: a good architect can give you a structured plan which is affordable but looks luxurious.

Let your architect know your financial capability to provide a building plan that you are capable of putting into existence.

8. Branding: build good branding. Your brand will sell your business whenever the word hotel pops up in mind because your brand is well known to the public with the kind of offers and services you provide

9. Staff Hiring: hire staff with good hospitality skill and knowledge to make your guests feel at home, even away from home

10. Staff Training: provide quality training for your staff, ensure that they can satisfy your guests at all costs. This is because your staff holds the key to determine whether your guests will keep coming for your services or recommend your business to friends and families

11. Pricing: strategize your pricing well. A high or low booking rate will affect business and can shut down your hotel for running at a loss and finding it difficult to manage the hotel.

It is advisable to visit other hotels that fall within the range of your service, get to know their pricing differences, and you’ll understand where to place your price to gain more customers and profit.

12. Unique Value Preparation (UVP): create a good UVP that speaks about why your prospective customers much choose your business in 10 – 20 words

13. Advertisement: draw a good advertising strategy for your hotel business, choose effective advertising platforms such as building a hotel website, social media handles, local newspaper advertising space, and many others

How Much Does It Cost To Start A Hotel Business In South Africa

The cost of establishing a hotel business differs depending on the kind of hotel structure and services you choose to offer, but the hotel business startup cost can range from R1.5 – 10M.

Is The Hotel Business Profitable In South Africa

South Africa has the top tourist destination on the African continent, attracting millions of tourists into the country annually. Therefore choosing the right location, good staffing, quality services, and good management can make your business a profitable venture.

In 2018 the revenue generated from the hotel business in South Africa was approximately R16.71 billion, and this figure is a prove of how profitable the business is, and there’s no turning back for choosing to go on the hotel business journey.

Best Places To Set Up A Hotel Business In South Africa

Below are some of the best places to set up your hotel business in South Africa:

1. Communities with tourist sites

2. In cities

3. Near business centers

4. Industrial areas

5. Near regional airports

How To Make A Hotel Business Successful In South Africa

Below are some of the factors to consider to help make your hotel business a successful venture:

1. A good UVP is required to attract customers

2. Create playspaces

3. Create an activity that involves the whole family

4. Plan for holiday programs that will keep kids entertained with their stay at your hotel

5. Include kids menu to make them feel involved in the hotel services

6. Cleanliness is vital

7. Hire helpful staff

8. Quality staff and customer relationship

9. Affordable pricing

10. The desire to serve guests to their maximum satisfaction

11. Quality and effective hotel services

Challenges In The Hotel Business In South Africa

The following are some of the challenges in the hotel business in South Africa:

1. Cost of maintenance

2. Rude guests

3. Capital intensive to establish

4. Bad hotel service

5. Wrong staffing

Benefits Of Setting Up Hotel Business In South Africa

Below are some of the benefits of setting up a hotel business in South Africa:

1. The business comes with an overwhelming profit to investors and employees

2. Job creation

3. Generates revenue for the government

4. Serves as a home when away from home

5. Improved the hospitality industry

That is the information we can provide on how to start a hotel business in South Africa.

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How to Start a Hotel Business: Complete Guide

According to Statista, the tourism industry grows steadily each year.

Inbound tourism growth by area; as per Statista

What this means, is that although the hospitality industry is saturated, there is still a need for hotels, guesthouses and B&Bs, all over the world.

Armed with the knowledge that the industry is growing, if you follow the steps in this article, you’ll have all the arsenal you need to become a successful hotel business owner and generate a profit fast.

Table of Contents

• 1 What type of person should you be to thrive in the hotel business?
• 2 What makes a successful hotel?
• 3 How to start a hotel business on a budget:
• 4.1 Step 1: Make a plan
• 4.2 Step 2: Create your Unique Value Proposition (UVP)
• 4.3 Step 3: Develop your marketing plan
• 4.4 Step 4: Form a Legal Entity
• 4.5 Step 5: Enquire about permits and zoning
• 4.6 Step 6: Raise startup capital
• 4.7 Step 7: Find hotel premises, build and furnish
• 4.8 Step 8: Recruit staff
• 4.9 Step 9: Put systems in place
• 4.10 Step 10: Train your team
• 4.11 Step 11: Open your hotel

What type of person should you be to thrive in the hotel business?

It goes without saying that hotel ownersneed to have the mindset of an entrepreneur, but to be successful, hotel owners require something extra: a desire to serve.

This is because the hospitality industry is known as the industry that most understands customer service, and for your hotel to thrive, you need to be someone who relishes serving others naturally.

While you may not directly interact with your guests, your attitude filters down through your top management, right to the ground staff.

A successful hotel is always born from the culture of its top management, and the culture of top management is always born from the hotel owner.

What specific qualities do owners of successful small hotels usually possess?

• A desire to serve
• A need to delight guests
• Good leadership abilities
• Hard-working
• Physically fit and healthy
• Ability to juggle jobs, especially in the early years when you may not be able to afford all the staff you need

What makes a successful hotel?

Image Credit: Marriott

Marriott International group of hotels are some of the most profitable hotel businesses in the world.

What makes a successful hotel depends on its target audience and what appeals to them, but overall, it’s all about the experience.

If your hotel caters to families, then you have to make sure that all family members can be kept satisfied and happy.

TripAdvisor says that the top 10 characteristics of top-ranking family hotels include:

• Activities for the whole family, and holiday programmes to keep kids entertained
• A feeling of “home away from home”
• Complimentary services to make things easier for families
• Including a kids menu so that uneaten food is not paid for
• Cleanliness
• Helpful staff

On the other hand, the world’s most luxurious hotels may boast ornate furnishings like the hotels listed in the Forbes Travel Guide , and their guests, often from pampered backgrounds and used to the very best, will demand high calibre services that the more average hotel wouldn’t usually consider.

From room service to complimentary breakfast, their staff are highly trained and authorised to do whatever it takes to satisfy a guest because the reputation of the hotel depends on it.

In addition, through exceptional service, staff have been known to create scenarios that have so delighted guests, the hotel has enjoyed positive publicity.

Some of the most luxurious amenities offered by some luxury hotels include:

• A tanning butler at the Ritz Carlton South Beach Miami . The tanning butler’s duty is to patrol the pool deck area to help guests apply sun lotions.
• The luxurious Hotel deLuxe in Portland caters to people who consider their pets family; not only is the hotel pet friendly, but they also offer everything guests need for their pets to stay with them, and boast a pet psychologist. The Lowell in New York City takes it a step further by offering room service for pets which includes doggy ice cream.

Image Credit: FidoFriendly

Hotel deLuxe’s Afternoon Tea for Pets

St. Regis in New York City offers a free Bentley car service to guests needing transport in a 10 block radius of the hotel.

Image Credit: TripAdvisor

The Bentley fleet of St. Regis

• Ballyfin provides a costume department and photo shoots pre-dinner.

Image Credit: DavidLansing

Guests at Ballyfin dress up for dinner

Now, these are examples from some of the world’s most luxurious hotels, but what if you don’t have the money to start at that kind of level?

In the hotel industry, it’s best to start small and grow. This brings us to our next section…

How to start a hotel business on a budget:

• As a prospective hotel owner,start by booking out a room in your own home. The key to making this work is to either make students your primary market so that affordability attracts them, or to offer a unique experience. For example, if you live in a rural area that has been in the news, like Soweto in South Africa, then you can offer a room in a house there, with a Unique Value Proposition(UVP) of something like, “experience Soweto first hand”. Once you begin making money by booking out a part of your home, you can begin to grow, offering more services as you expand, and eventually, setting up a full-fledged hotel.
• Try the AirBnB way of instant hotelliering. Hire out your home or other property you own; when it gets booked, move yourself to cheaper accommodation so that you still make a profit. Make sure the pictures of your home are appealing. Once you start making money from regular bookings, you can work out an alternative solution. The key is just to get started.
• Hire a business capital broker who has networks of contacts and investors.
• If you have some money, find cheap land in a good location, like 19 and 21-year-old brothers Lucas & Travis Boychuk did in 2008 in order to build an action sports resort in 2014. Today, Surf Ranch is a 19 condo action sports resort, with a restaurant, swimming pool plus island and swim-up bar, and is known as the largest skateboard park in Nicaragua.

The story of how two young brothers started a resort with limited funds

How to start a hotel business: 

Step 1: make a plan.

Although it’s possibly the longest step in starting a hotel, a detailed business plan is your foundation. Not only does it determine the success of your hotel and its launch, but it also eliminates wasting time.

If you don’t have a hotel business plan, you won’t know where you are going, and you’ll find yourself constantly on the back foot, taking one step forwards and two back.

In addition, without a hotel business plan, no one will fund your idea, or invest in it.

So firstly: what is your hotel dream?

Take time to visualise what your dream looks like. Use all your senses to imagine how your hotel looks, feels and smells.

You’ll know in your gut when you’ve hit the sweet spot of what you want to achieve, and when that happens, planning can commence.

Here are the steps of how to play out your plan of starting a hotel and what it should include:

Conduct market research

The first phase of starting your own hotel is market research. It also forms the bulk of the work to be done before you can start thinking of the fun stuff, like the actual hotel and operations.

However, the research is what will determine your hotel launch and marketing success and must not be avoided.

Target market

It is essential to intimately understand your primary target market.

You can not start a new hotel without first knowing what your market wants, and you cannot go into creating a great guest experience if you plan to simply cater to all and sundry, because each target market’s needs vary.

Take EVEN Hotels as an example. Their accommodation and services are focused on health and wellness, and they use four focus points:

• Keep Active
• Accomplish More

As such, all their staff are trained in health and wellness and their facilities wholeheartedly centre around health.

This hotel will only attract people who are into health and fitness, while people who prefer eating McDonald’s to green smoothies are not likely guests.

It’s a great way to separate their brand from other hotels that are not focused on health.

With that said, will you target families, business travellers, or the wealthy? Each of those groups will have different needs and if you don’t know what they are, your hotel will not appeal to them.

People who want to enjoy romantic activities together will not appreciate being in an environment where kids are running amok. Guests who enjoy a healthy lifestyle may need vegetarian meal options.

Your marketing plans will also require a very good understanding of who your audience is because you can’t begin to market to the right people if you don’t know what’s going to get their attention.

Tips to get started

• There are three ways of finding your ideal target market. The first is to base your hotel on the type of people you already know best, the second is to find out the types of people that would most be attracted to the kinds of things your hotel plans to offer, and the third depends on location and what types of people are drawn to what’s on offer in the area.
• It would be helpful to have already established your UVP by this stage.
• Gather information about your ideal audience by having conversations with competitor guest-facing staff, or creating surveys aimed at the hotel staff of competitors, social media channels (analyze competitor information on their social media accounts), surveying people you would consider your target audience and checking out competitor reviews on sites like TripAdvisor. What you want to find out is what motivates your audience to choose specific accommodation.
• Create a detailed guest persona.

Image Credit: Otium Boutique

Example of a guest persona

“Location, location, location!”

Location plays a huge role in the success of your new hotel. Probably the two most important elements to generating revenue are location and marketing.

The JW Marriott Las Vegas Resort & Casino is close to some of the top golf courses in Las Vegas, so it would attract golf players. In addition, it is fancier than many surrounding hotels, which also adds to its appeal for its target market.

In Barcelona, hotels situated in the city centre attract people who want convenience. There are major sights to see, the airport is right there, and public transport is easy to find. In the area, Durlet Beach Apartments is a great option for families because it has everything. It’s close to the beach, includes a kitchen and because of its location, it’s easy to get transport for entertainment that is not within walking distance.

Image Credit: Durlet Beach Apartments

Firstly, get the town right. Forbes offers a unique take on the first step to finding out if your ideal town is going to be a good fit. By using the model of hotels like Hampton Inn, Holiday Inn Express, Courtyard by Marriott and Fairfield by Marriott, find out first if those hotels in the local market are charging at least $110 per night as their best available rate. If not, that town will probably not be profitable for your hotel business.

The next most basic thing to analyze is whether you can offer something in that town that’s missing from other hotels in the area, especially the franchised ones like Holiday Inn and so on.

Lastly, the street you choose as your premises must cater to the needs of your target market. Does your hotel need to be close to a train station? Is there entertainment within walking distance? What does the town offer your guests and how will guests get to where they want to go?

In this step of your research, you’ll need to determine the type of hotel business you would like to start, and you should have an idea of what you envisage from the visualization exercise you already did in an earlier section of this article.

Now you need to jot down your visualization on paper to make it real. For example:

• How many rooms would you like?
• Will it be considered a boutique hotel?
• Will it focus on affordability or location?

Image credit: Francesca Saraco/Unsplash.

• If you’re strapped for cash, refer to the section that discusses ideas to start a hotel on a limited budget. Also, try these brainstorming tips to find ways to start a hotel business using the resources you already have.
• Determine the ideal location for your hotel. Location is of extreme importance when starting a hotel, because people will book when the location is right. And of course, location depends on the audience you will want to attract. Business people need a location that is more central, or where it’s easy to get transport. Families will want things they can do together which are not too far from their accommodation. Couples may want to rekindle the romance with beach walks, horse rides and fun things like bungee jumping. Get the location right and you’ve won half the battle for getting booked out.
• Determine whether to build your hotel business from scratch, buy an existing hotel and renovate, or buy a franchise hotel. To get an idea of the average cost, speak with architects and others who will be involved in building/renovating your hotel.

Now that you know your target market and how to attract guests with your new hotel business, you can begin researching your competitors.

You’ll want to find out more about their financial model to give you an idea of what you should be charging (as long as you provide similar services.)

Pricing too low or too high can be lethal for hotel owners. Little Hotelier offers 5 smart pricing strategies for smaller hotels.

• Start with competitor research.

Competitors and industry

Get a feel for what other businesses in the hospitality industry are doing and what’s working for them.

Visit them and simply observe and make notes.

While you certainly want to make your own hotel business unique, your aim of visiting the competition is not to copy them.

There is no better way to understand the authenticity of the hospitality industry than from checking out your competition, not in a competitive way, but rather for the purposes of understanding.

• Find similar types of accommodation to what you would like to build. The easiest way to do this is by doing an internet search with the formula phrase “[accommodation type] + [location]”. I.e., “guest house Rotherham”. Refine your search as you go. Make a list that includes establishment name, rates, services and special notes. Bear in mind that just because they have a website does not mean they are doing well, so don’t copy, just get ideas and observe.
• Add your name to competitor subscriber lists so that you get the emails they send.
• Network with other hotel owners at exhibitions and groups they attend. Listen more than talk so you can take it all in.
• Pay for data that will give you answers.

Step 2: Create your Unique Value Proposition (UVP)

Your target market will determine your UVP.

But what exactly is a UVP?

ConversionXL clarifies it like this: “ A value proposition is a promise of value to be delivered. It’s the primary reason a prospect should buy from you. ”

Essentially, what a UVP does is tell prospective guests why they should pick your hotel, and does so with the least amount of words, providing an understanding of what your hotel business offers, in 10 – 20 seconds of reading it.

When creating your hotel’s UVP, here are some points to remember:

• Think of it as an executive summary that can be understood within 10 – 20 seconds.
• Be clear about what makes your hotel identity stand out.
• Do not include redundant words and promises, like, “Customer satisfaction guaranteed”.
• Clearly state the benefits of selecting your hotel business.

Now, most businesses boast fancy UVPs, but they are meaningless. An effective UVP will drive every decision and behaviour of the organization. Most of all, within seconds it will convey what you offer that is different to your competitors.

Let’s take a look at two mediocre examples of hotel UVPs:

• “Co s y stays at affordable rates.”
• “Stay close to the action in Hallandale Beach.”

Here are examples that get it right:

• “8 -m inute walk to Disneyland Park.”
• “For the bike and biker.”
• “Lounge in a luxury loft near Wrigley Field.”

Remembering that your guests will book into your hotel as a solution to either avoiding pain or to enhance feelings of pleasure, why will your guests want to book with your hotel? What will it offer that your competitors in the hotel industry won’t?

Blue Magnetic Interactive provides help with how to build a meaningful UVP.

Step 3: Develop your marketing plan

You’ve raised the capital you wanted and built your dream hotel. And yes, it’s a masterpiece. But if nobody knows about its existence, you won’t get guests.

Marketing is key to generating revenue.

What should a hotel marketing plan contain?

Well, firstly, Otium Boutique says, “To optimise your messaging and effectively engage potential guests, you need to understand the intent of their behaviours and the goals they are trying to meet. The head of an HR consultancy firm may be browsing your hotel’s website to find accommodation for an upcoming business trip, but what she really wants is a home-away-from-home, a seamless transition to all the creature comforts and modern technologies that allow her to carry on with business as though she never left the office. Promoting your popular cocktail bar may not be of interest, but letting her know that high-speed WiFi, printing facilities, or same-day professional laundry services are all complimentary offerings demonstrates that you can meet the needs of travelling professionals. ”

Keep your primary audience in mind when developing your hotel marketing plan.

With that said, flesh out your plan under these headings:

• Vision statement
• Mission statement
• Planned services and amenities and income from them
• Marketing budget
• Target persona
• Opportunities
• Main competitors
• Sales forecast
• Key differentiating factors
• Brand identity and internal culture
• Joint ventures
• Guest retention strategies
• Support and guest care
• Offline advertising
• Online advertising
• Offline marketing
• Online marketing

Get inspired! Here’s one example of a great marketing campaign: Four Seasons provides an online luxury travel magazine with high-quality articles and good resources. It includes subtle but effective marketing to encourage readers to take action like making a booking.

The launch of your new hotel requires a separate marketing plan wired to get people excited. You can offer special discounts, or think up other exciting promotional ideas. Leverage social media platforms like Instagram to build social proof for your business through likes and comments. Boost your profile by getting IG likes from reliable sources. Dana Communications discusses pre-opening marketing ideas for new hotels .

Step 4: Form a Legal Entity

The sole proprietorship, partnership, limited liability company (LLC), and corporation are the four main types of business structures.

Forming a legal business entity, such as an LLC or corporation, saves you from being held personally responsible if your hotel business is sued for some unwanted reasons. Additionally, your hotel can gain from tax advantages and increased credibility as well.

You can choose the best state to form an LLC and create an LLC yourself while simply paying the minimal state LLC costs. The cost of setting up an LLC differs from state to state. For instance, if you wish to form an LLC in Florida , you will have to check and consider the Florida state taxes to set up your LLC business.

Step 5: Enquire about permits and zoning

As a new hotel owner, you will need to consult with the local government to understand zoning, permits and building codes for hospitality, and to get an idea of what it will cost for your financial plan.

Step 6: Raise startup capital

If your circumstances allow it,and you have a rock-solid business plan, it would be a good idea to raise startup capital for your new hotel business.

There are various ways of doing that; you need to find the best solution for your needs:

• Take out a small business loan . Get expert tips for improving your chances of getting a loan.
• For big ideas that are sure to make a lot of money, find angel investors who would be keen to get a share of your hotel business. Geekwire offers advice for pitching to angel investors.
• Look for venture capitalists who can also offer valuable advice. Find out how to find funding with this method.
• Another idea is to set up a crowdfunding campaign to get small amounts from a lot of different people. Get tips to do it well.
• Enquire about incubators to help introduce you to potential investors. Entrepreneurmag offers guidance on what incubators are.
• Yet another avenue is friends and family – you never know who will believe in your idea. Be sure to treat them as an investor; avoid the temptation to be sloppy in presenting to them just because they’re friends or family.

When asking anyonefor money, either as an investment or loan, make sure you are prepared and clear about the numbers. This is important because it’s the first clue as to whether you will make a good business founder they can trust.

Create a strong, well thought out plan and then present it to investors and lenders to raise the required funding. It is vital to show confidence and that you’ve given your new business idea enough thought.

Remember that people are only going to help you if they believe your hotel will make money and if they trust that you and the management team will be able to lead your hotel to profit. 

Step 7: Find hotel premises, build and furnish

Depending on which option you’ve chosen, whether to buy land and build, or purchase an existing property and renovate, you need to find the right premises.

In this step, you’ll prepare the premises for guests, and then furnish it to attract the type of people you aim to target.

Start by finding out what room amenities most hotel guests really want .

Step 8: Recruit staff

Recruiting the right hotel employees to help you achieve your vision is one of the most crucial steps to making your entire hotel business run by design.

Using your UVP, it is now time to consider the kind of organizational culture you want in your hotel, because you must not recruit staff until you are clear about what type of people you want running it.

You can always train, but you can’t always find people with the right characteristics to build a profitable business with the right culture.

Image credit: Chuttersnap via Unsplash.

Just as you created a guest persona, so you should create a staff persona, so you know exactly what to look for.

To find the people who possess the characteristics most important to you, get help from a professional to create personality tests. If you’ve never hired hospitality staff before, do some homework about the essentials .

The first staff member to hire will depend on the vision of your hotel, as well as the most pressing, urgent tasks. Ideally, you’ll start with a marketing manager and sales team to help grow the hotel fast, and a project manager who can assist you in getting everything going.

Step 9: Put systems in place

Taking your hotel business plan into account, you’ll now consider which systems need to be put into place to boost operational efficiency.

At the top of the list will probably be your reservation system, and then other software such as:

• Accounting for operational expenses and revenue management
• Marketing automation to give you a competitive advantage

Our best suggestion is to think up wish-list processes, and then find the software to fit those best-case processes and sales efforts.

For example, you may have thought about how to make it easy for people to book with you, and one such way is to use a hotel app builder. Similarly, to send follow up messages and other information through SMS you need an SMS service. There are various bulk SMS providers to choose from.

A good idea is to bring a professional process management consultant on board to help.

Alternatively, Greenice gives an overview of how to develop customised hotel management systems.

Step 10: Train your team

Be sure to train your hotel manager and staff to follow processes, and empower them to deal with guests, and handle complaints. Equip them to do whatever it takes to satisfy the people who stay in your hotel.

Hotelogix provides guidance on how to train guest-facing staff .

Step 11: Open your hotel

Voila! D-Day! Here’s to a grand opening and being flooded with guests.

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Southern African Experience

Below is a list of some of our most recent and current projects conducted directly by us or in conjunction with strategic partners:

South Africa

• Business plan, market assessment and financial projections for a hotel development in Cape Town, South Africa (2016);
• Update of a market and financial feasibility for a midscale business hotel in Menlyn, Pretoria (2016);
• Debt finance raising for an 80 key midscale hotel development in Cape Town (2016);
• Management contract negotiation assistance for a 400 roomed internationally branded hotel in the Cape Town CBD (2016);
• Hospitality opportunity assessment of the 3, 4 and 5-star sector in the Cape Town CBD in order to identify options for, and the feasibility of, a hotel and serviced apartments (2016);
• Assessment of the opportunity to rebrand a five star hotel in Cape Town to a luxury branded property (2016);
• Market and financial assessment for an internationally branded upper midscale hotel development in the Waterfront/Foreshore area of Cape Town (2016);
• Market and Financial Feasibility study for a green hotel development as part of a mixed-use development in Pretoria (2016);
• Expert witness assistance relating to the future sustainability of an internationally branded hotel under the current model in the Garden Route, Western Cape (2016);
• Market and Financial Feasibility study for a hotel in the Rosebank/Illovo area (2015);
• Market and Financial Feasibility study for a hotel in the Johannesburg CBD area (2015);
• Market and Financial Feasibility study for an international standard midscale hotel with conference centre in the Hillcrest Area, Pretoria (2015);
• Market and Financial Feasibility study for a hotel at the OR Tambo International Airport (2015);
• Single asset valuation upon completion of an office building to be converted into a 4-star internationally branded hotel in Cape Town (2015);
• Market and Financial Feasibility for an international standard midscale hotel in the Durbanville/Tyger Valley Area (2015);
• Operator selection for a 186-room economy branded hotel on the foreshore in Cape Town (2015);
• Market and Financial Feasibility Study for a 238-key upscale select service hotel at the V&A Waterfront (2015);
• Market and Financial Feasibility for a large luxury mixed-use development in Sandton including: hotel, private residences, residential and office (2015);
• Market and financial feasibility study for a 100-150 room midscale hotel development in Pretoria (2015);
• Feasibility study review and analysis for a small locally branded midscale hotel in Kathu (2015);
• Portfolio valuation of 4 internationally branded hotels around South Africa (2015);
• Debt finance raising for the refurbishment of a midscale 110-room hotel into a 147 room 4-star hotel in Cape Town (2015);
• Buy-side advisory for the purchase of a 230-room 4-star hotel in JHB (2015);
• Operator Selection and management contract negotiation on a midscale internationally branded hotel at the V&A Waterfront in Cape Town (2014/2015);
• Market and financial feasibility study for a large combo-hotel development involving a 300-room mid-scale and a 200-room upper mid-scale hotel in Cape Town, South Africa (2014);
• Market and Financial Feasibility for a midscale business hotel in Menlyn, Pretoria (2014);
• Market and financial feasibility study for a midscale internationally branded hotel in Hatfield, Pretoria (2014);
• Market and financial feasibility study for a 130-room midscale hotel in Malelane near the Kruger National Park (2014);
• Market and financial feasibility study for an international standard mid-scale hotel in Bedfordview, Johannesburg (2014);
• Market and financial feasibility study for an international standard midscale hotel in Tygervalley, Cape Town (2013);
• Transaction advisory and operator contract assistance for a large 5-star hotel in Cape Town (2013);
• High level market and financial assessment for a 3-star and a 4-star hotel development in Cape Town (2013);
• Market and financial feasibility study for an airport hotel at King Shaka International Airport, Durban (2011);
• Multi-site Market and Strategic Assessment in South Africa for an international operator (Johannesburg, Pretoria, Cape Town and Durban) (2011);
• Provided management contract advice for a client who was seeking to appoint a large international brand, on their project at the Cape Town Waterfront (2010);
• Market and financial feasibility study for a 250-bedroom 5-star hotel in Sandton, Johannesburg (2010);
• Market and financial feasibility study for a 4-star hotel outside of Cape Town (2010)
• Market and financial feasibility study for a business and conference hotel near the OR Tambo International Airport, Johannesburg (2010);
• Market and financial feasibility study for a 4-star deluxe, 200-room hotel attached to an existing upmarket, exclusive shopping centre development in Bedfordview, Johannesburg, South Africa (2009);
• Conceptualization, packaging and investment brokerage for a 70-bedroom 3-star hotel onto an existing shopping centre in northern Johannesburg, South Africa (2009);
• Market feasibility study for a 100 bedroom, 3-star hotel attached to a shopping centre in Mafikeng, South Africa (2009);
• Market and financial feasibility study for a 5-star, 53-room boutique hotel in Sandton, Johannesburg (2009);
• Preliminary market and financial feasibility study and valuation for 140-unit apartment hotel in Sandton, Johannesburg;
• High level financial viability and valuation for a 100-unit apartment hotel in Eastern Johannesburg;
• Valuation and business plan for a 100-unit apartment hotel in Eastern Johannesburg;
• Market feasibility study for a business hotel in Sandton, Johannesburg;
• Asset management advice for 6 years for a 140-room 4-star hotel, conference and wedding venue outside of Pretoria with revenues in excess of R 50 million annually;
• Market and financial feasibility study for a 4/5 star hotel development as part of an existing shopping centre development in Eastern Johannesburg;
• Market feasibility study for a 200-bedroom upscale business hotel, attached to a shopping centre in Bedfordview, Johannesburg;
• Market and financial feasibility study for a 80-bedroom up market business hotel on the Cape Town foreshore;
• Market and financial feasibility study for a luxury business hotel and international convention centre in Mpumalanga;.
• Market and Financial feasibility study for a 4-star deluxe green hotel and conference facilities development as part of a mixed use development in Sandton Johannesburg;
• Project conceptualisation and market feasibility study for an integrated resort in Mpumalanga, South Africa, incorporating a luxury private game reserve, commercial and private lodges, golf course, hotels and residential real estate.
• Market and financial feasibility study for a mixed-use development including a five-star hotel, an international convention center and a lifestyle center in Victoria Falls, Zimbabwe (2016);
• Market and financial feasibility study for a hotel and conference centre in Harare, Zimbabwe (2015);
• Market and financial feasibility study for hotel and conference centre in Harare, Zimbabwe (2014);
• Management contract negotiation for a mixed use development including a five star hotel, retail and commercial in Harare, Zimbabwe (2014);
• Market and financial feasibility study for an international standard conference hotel in Harare, Zimbabwe (2013);
• Market and financial feasibility study for an integrated development including a five star hotel, retail and commercial in Harare, Zimbabwe (2013)
• Management contract negotiation with an international management company for a 5-star hotel in Harare (2010);
• Market and financial feasibility study for a business hotel in Harare (2010);
• Market feasibility for an internationally branded mid-scale hotel in Swakopmund, Namibia (2015);
• Market feasibility for a 150-room internationally branded mid-scale hotel in Windhoek, Namibia (2014);
• Brokering the sale of a 150-bedroom, 4-star waterfront hotel in Swakopmund, Namibia;
• Market feasibility for a leisure hotel in Swakopmund;
• Analysis of the tax policies, structures, operational issues and investment constraints in the tourism and hotel sectors in Namibia.
• Market research for a fair valuation of a 5-star hotel in Lusaka, (2016);
• Owners representation for internationally branded upscale 82-room apart-hotel in Lusaka, (2016);
• Management contract negotiation for an internationally branded upscale 82-room apart-hotel in Lusaka, (2016);
• Market and financial feasibility study for a 4-star hotel in Ndola, (2016);
• Market and financial feasibility study for the redevelopment of the Savoy Hotel in Ndola (2016);
• Market and financial feasibility study for a 2-star hotel in Kasama (2016);
• Market and financial feasibility study due diligence for a business hotel in Lusaka, Zambia (2011);
• Market and financial feasibility study for a 4-star hotel in Ndola and for the redevelopment of the Savoy Hotel in Ndola (2012);
• Market feasibility study for a mid-market hotel in Lusaka, Zambia (2008);
• Analysis of the tax policies, structures, operational issues and investment constraints in the tourism and hotel sectors in Zambia.
• Management contract negotiation on a 130-key internally branded hotel in Mbabane, Swaziland (2015);
• Market and financial feasibility study for an international standard hotel in Mbabane Swaziland (2014).
• Market and financial feasibility study for a leisure resort on Lake Malawi (2016)
• Management contract review and negotiations for a hotel and branded residence in Gaborone, (2015);
• Market and financial feasibility study for an upscale hotel development in Gaborone, (2015);
• Market and financial feasibility study for a mixed-use development in Gaborone, (2015).
• Analysis of the tax policies, structures, operational issues and investment constraints in the tourism and hotel sectors in Lesotho.

• Travel, Tourism & Hospitality ›
• Accommodation

Hotel industry in South Africa - statistics & facts

Post-pandemic recovery of hotels, income increased gradually, most hotel reservations were booked online, key insights.

Detailed statistics

Contribution of travel and tourism to GDP in South Africa 2005-2021

Number of people employed in tourism in South Africa 2019-2021

South Africa's visa openness to African visitors 2021

Editor’s Picks Current statistics on this topic

Average daily rate of hotels in South Africa 2012-2023

Overnight stays in hotels in South Africa 2012-2023

Growth of hotel room revenue in South Africa 2012-2023

Further recommended statistics

UK hotel industry market size 2013-2024

Market size of the hotel industry in the United Kingdom from 2013 to 2023, with a forecast for 2024 (in billion GBP)

Global hotel and resort industry market size worldwide 2022-2023

Market size of the hotel and resort industry worldwide in 2022 and 2023 (in trillion U.S. dollars)

Market share in the hotel industry of leading OTAs in Europe 2023

Relative market share of major online travel agencies (OTAs) in the hotel industry in Europe in 2023

Market value of biggest global hospitality and recreation companies 2024

Leading hospitality and recreation companies worldwide in 2024, by market value (in billion U.S. dollars)

Median full-time salary in tourism and hospitality industries in the UK 2023

Median annual gross salary for full-time workers in tourism and hospitality industries in the United Kingdom (UK) in 2023, by industry (in GBP)

Market size of the tourism sector worldwide 2011-2024

Market size of the tourism sector worldwide from 2011 to 2023, with a forecast for 2024 (in trillion U.S. dollars)

Market value of biggest global hotel and resort companies 2024

Leading hotel and resort companies worldwide in 2024, by market value (in billion U.S. dollars)

Expected revenue of hospitality industry in the UAE 2021-2028

Forecasted revenue of the hospitality industry in the United Arab Emirates from 2021 to 2028 (in billion U.S. dollars)

Expected revenue of hospitality industry in Saudi Arabia 2021-2028

Forecasted revenue of the hospitality industry in Saudi Arabia from 2021 to 2028 (in billion U.S. dollars)

Expected revenue of hospitality industry in the GCC 2021-2028

Forecasted revenue of the hospitality industry in the Gulf Cooperation Council from 2021 to 2028 (in billion U.S. dollars)

Expected revenue of hospitality industry in the GCC 2022-2028, by country

Forecasted revenue of the hospitality industry in the Gulf Cooperation Council in 2022 and 2028, by country (in billion U.S. dollars)

U.S. hotel and motel industry market size 2012-2022

Market size of the hotel and motel sector in the United States from 2012 to 2022 (in billion U.S. dollars)

Hotel and motel industry market size in Canada 2010-2022

Market size of the hotel and motel sector in Canada from 2010 to 2022 (in billion U.S. dollars)

Global hotel and tourism industry operating profit margin Q1 2021-Q3 2022

Operating profit margin of the hotel and tourism industry worldwide from 1st quarter 2021 to 3rd quarter 2022

Global hotel and tourism industry gross margin Q1 2021-Q3 2022

Gross margin of the hotel and tourism industry worldwide from 1st quarter 2021 to 3rd quarter 2022

Median hourly pay in tourism and hospitality industries in the UK 2023

Median hourly gross pay in tourism and hospitality industries in the United Kingdom (UK) in 2023, by full-time and part-time (in GBP)

Global market size of the hospitality industry 2023-2029

Market size of the hospitality industry worldwide in 2023, with forecasts for 2024 and 2029 (in billion U.S. dollars)

U.S. boutique hotel industry market size 2022-2023

Market size of the boutique hotel sector in the United States in 2022 and 2023 (in billion U.S. dollars)

Leading hotel and restaurant companies in India 2023, by market capitalization

Leading hotel and restaurant companies in India as of 2023, based on market capitalization (in billion Indian rupees)

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PRE-WRITTEN BUSINESS PLANS FOR SOUTH AFRICA (PDF, WORD AND EXCEL): COMPREHENSIVE VERSION, SHORT FUNDING/BANK LOAN VERSION AND AUTOMATED FINANCIAL STATEMENTS

Posted by BizBolts | All Articles , Business Plans

We have several payment methods which you can use to buy the business plans.

Payment Method 1 (Visa card, Mastercard, Credit card, Debit Card) – R500

To purchase the business plans using Visa Card/Master Card click here: Business Plans Store . After you have purchased, you will instantly see the download link for the business plan package on the screen. We will also email you the download link. Click the button below to purchase business plans using Visa Card/ Mastercard.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

Payment Method  2 – (Instant EFT – FNB, Absa, Standard Bank, Nedbank, CapitecBank, Investec, TymeBank and African Bank. )

Other Payment Methods

• Cash deposit into our FNB Company Bank Account
• EFT Transfer to our FNB Company Bank Account

Call/Whatsapp us on +27606334830 for the other payment methods. (Whatsapp us by clicking the link https://wa.me/27606334830 ). Email: [email protected] .

Testimonial 5

The BizBolts poultry business plan led us down the path from start to finish. Contact details of suppliers of key requirements were included in the business plan. It helped us crystallize our strategy, and the business plan was well received by the bank.

Testimonial 3

The business plan has a highly professional look and feel. The research really helps me look deep into the market that I am targeting, it’s well suited for the South African market. The business plan clearly outlined everything I need to start the business and the costs. It’s now easier to budget and plan. Thank you very much.

Testimonial 2

I am extremely pleased with the business plan and financial statements. The business plan is very detailed & it meets my requirements. I feel better equipped with tools that can help me secure funding.  I would have no hesitation of recommending your business plans to other people.

Testimonial 6

It is with excitement and pleasure to inform you that I have been successful in securing a loan from my bank. This would not have been possible if not for the BizBolts Business Plan. Thank you for your help, my dreams are now coming true.

Testimonial 1

Many thanks to the BizBolts team for putting together a fantastic business plan, I could not have done this business plan on my own. I managed to get funding from investors to start my butchery business using your business plan.

Testimonial 4

The business plan was very helpful, you did a great job of taking ideas and putting them into words as well as pointing out other aspects of the business plan I wouldn’t have thought of. I got funding using your business plan and it’s now 4 months since I started my poultry business, and everything is going well.

Testimonial 7

Thank you BizBolts for the business plan. I received the business plan immediately after payment, it was money well spent ! I was able to easily edit the business plan. After using the BizBolts business plan, I can wholeheartedly recommend their products and skills.

About the Business Plans

We decided to introduce the South African business plans after noting that many South Africans were venturing into businesses without a full understanding of the industry, market, how to run the businesses, the risks involved, profitability of the businesses and the costs involved, leading to a high failure rate of the start-ups.

Our business plans will make it easier for you to launch and run a business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as the business plans will lay out all the costs involved in setting up and running the business. They are designed uniquely for the South African market.

USES OF THE BUSINESS PLANS (PDF, WORD AND EXCEL)

These business plans can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your business
• As a project proposal
• Assessing profitability of the business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

CONTENTS OF THE SOUTH AFRICAN BUSINESS PLANS (PDF, WORD AND EXCEL)

All our pre-written plans include, but not limited to:

• Market Analysis
• Industry Analysis
• 5 Year Automated Financial Statements [ Income statements, cash flow statements, balance sheets, monthly cash flow projections (3 years monthly cash flow projections, the remaining two years annually),break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortisation]
• Marketing Strategy
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some South Africans in that type of business fail, so that you can avoid their mistakes
• Ways to raise capital to start your business in South Africa

All our agriculture pre-written business plans include technical aspects of how to keep and rear the animals / farm the crops. They also include a mini-directory with contacts which will prove to be helpful in launching and running the business. E.g. for broiler poultry we will provide the contact details for South African suppliers of feeds, equipment, day old chicks, abattoirs, training companies etc)

The Business plan package consist of 4 files

• Business Plan – PDF file (Comprehensive – Between 70-105 pages)
• Business Plan – Editable Word File (Comprehensive – Between 70-105 pages)
• Business Plan Funding Version – Editable Word File (Short version for applying for a loan – between 35-50 pages)
• Business Plan Automated Financial Statements – (Editable Excel file)

The financial statements are automated. This implies that you can change an item eg unit price, and all the other financial statements will automatically adjust to reflect the change.

About The Author

BizBolts (Pty) Ltd is a business research company based in Johannesburg, South Africa. We sell prewritten business plans for various industries including livestock production, crop farming and retail businesses. BizBolts also publishes articles on business ideas, business news, business tips, personal finance, and entrepreneur profiles.

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Hospitality outlook: 2019-2023

9th Annual edition: Unparalleled experience

PwC’s team of hotel specialists provide an unbiased overview of how the hotel industry in South Africa, Nigeria, Mauritius, Kenya, Namibia and Tanzania is expected to develop over the coming years.

of total hotel room revenue was accumulated by three-star hotels in South Africa.

increase in number of four-star-hotels rooms in 2017-18.

per room will be the average cost of a five-star hotel room in 2023.

Overall room revenue in South Africa, Nigeria, Mauritius, Kenya and Tanzania rose 7.4% in 2018, up from the 1.9% increase in 2017, principally reflecting a 28 percentage point turnaround in Kenya, a 15.4 percentage point turnaround in Tanzania, as well as a 7.2 percentage point improvement in Nigeria. Mauritius continued to grow at double-digit rates in 2018 but room revenue growth in South Africa fell to only 0.5%.

In South Africa, concerns about the water shortage in Cape Town led to a drop in guest nights and slower growth in ADR (average daily rate), continuing the trend from 2017. 

We project South Africa to be the slowest-growing market with a 3.3% compound annual increase in room revenue. This relatively modest increase will reflect the expectation of low ADR growth, as growth in online booking and the increasing use of travel sites promotes price shopping. At the same time, we look for an improvement in guest night growth as tourism increases during the latter part of the forecast period.

(Main picture: Montecasino - Image courtesy of Tsogo Sun)

Image courtesy of Tsogo Sun

• Online travel sites are allowing visitors to become more price conscious, which will dampen ADR (average daily rate) growth. 
• South Africa is becoming more aggressive in bidding for MICE  (meetings, incentives, conferences and exhibitions) business, supporting growth in international tourism.
• Growth in domestic tourism and adventure tourism will benefit mid-market hotels appealing to millennials.
• Airbnb growth will compete at the low end of the market but will not have much of an impact at the high end.

Hotel room revenue

Hotel room revenue for the five markets as a group will increase at a 5.8% compound annual rate to R50.6 billion in 2023 from R38.1 billion in 2018.

Tourism Amendment Bill 2019

The Tourism Amendment Bill 2019 was issued in the Government Gazette on 12 April 2019. The Bill’s stated aim is to provide for the development and promotion of sustainable tourism for the benefit of South Africa, its residents and its visitors; to provide for the continued existence of the South African Tourism Board, and to regulate the tourist guide profession. The most controversial aspect of the Bill is its proposal to regulate ‘short-term home rentals’ under the Tourism Act. This means home-sharing apps such as Airbnb and their hosts will soon be regulated in South Africa.

The proposed legislation would empower the minister of tourism to determine ‘thresholds’ regarding these short-term home rentals and enforce limits on, for example:

• The number of nights booked through these apps;
• The upper limit on the value of a night stay; or 
• The income earned for each Airbnb owner.

The thresholds would apply to ‘non-businesses’ that do not operate on a full-time basis. The Bill does not specify the exact thresholds that the Act will enforce. The bill was open for public comment until 11 June.

The economy

The South African economy weakened in 2018 with real GDP edging up only 0.8%, down from the 1.4% rise in 2017, which was itself a lacklustre performance. The economy continued to falter in early 2019 and we expect economic growth to drop to 0.4% for the year as a whole. We then expect modest improvements but the economy will remain sluggish. Growth for the entire forecast period will average an estimated 1.1% compounded annually, matching the 2014-18 period.

Consumer price inflation moderated to 4.7% in 2018, down from increases of 6.4% and 5.3%, respectively, in 2016 and 2017. With the economy remaining relatively weak, we look for inflation to drop to 4.0% in 2019. Then, as economic growth picks up a bit, we look for inflation to pick up as well, although price increases will remain moderate compared with recent years. For the forecast period as a whole, we project consumer price inflation to average 4.4% compounded annually.

Tourist arrivals

Growth in foreign tourism dropped to 1.7% in 2018, down from the 2.4% gain in 2017 and the 12.8% increase in 2016. The slowdown in large part reflected concerns about the drought in Cape Town and the possible approach of Day Zero when Cape Town would run out of water. It turned out that citizens of Cape Town did a remarkable job in conserving water, reducing city usage per day to 507 million litres in 2018 from 600 million litres in 2017. That effort, together with the good rains in 2018 helped avert Day Zero, however the drop in tourist numbers was felt throughout the rest of 2018 and early 2019.

The rainy season in 2018 produced good rainfall and reservoirs have risen to 70% capacity. Although the threat of a Day Zero has been alleviated, we don’t expect a rebound in foreign tourism in 2019.

Another development in 2018 was the increase in tourism from Africa, which offset declines from Europe and Asia-Pacific. More flights and visa waivers that went into effect in late 2017 made it easier for people in the rest of Africa to visit South Africa. The number of visitors from Africa rose 3.0% in 2018, while visits from Europe fell 2.5% and Asia-Pacific was down 1.9%. Declines from the UK, Germany, France and the Netherlands contributed to the drop from Europe, while India, China, and Australia posted decreases from Asia-Pacific. 

Recent developments

Guest nights dipped 0.7% in 2018, principally reflecting a decline in visitors to Cape Town due to the drought, although Johannesburg and Durban also recorded modest declines. We expect guest nights to stabilize in 2019 and to grow at somewhat faster rates in subsequent years as tourist arrivals pick up. For the forecast period as a whole, we look for the number of guest nights to increase at a 1.8% compound annual rate.

The number of available rooms rose 2.3% in 2018, the largest increase during the past six years. This increase was the result of a full-year’s benefit of the 13 hotels that opened in 2017, including three Radisson hotels, two Sun International hotels, an AHA, a StayEasy and Sun Square by Tsogo Sun, an Onomo and The Silo Hotel, among others. There were eight additional hotels that opened in 2018, including a Marriott, a Sun International, and an Onomo hotel.

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Pietro Calicchio

Hospitality, Gaming and Leisure Leader, PwC South Africa

Tel: +27 (0) 11 797 5292

Basheena Bhoola

Associate Director, PwC South Africa

Tel: +27 (0) 11 797 5687

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How to Start a Guest House Business in South Africa

By: Author Tony Martins Ajaero

A guest house is a commercial accommodation that offers between 4-16 bedrooms (a business with more than 16 bedrooms is called a hotel), and which has, as its primary source of business, the supply of tourist accommodation. Breakfast and dinner are made available to guests, particularly where the latter is not readily available in the vicinity of the business.

A lot of guests choose guest houses because of their cozy and welcoming feel which is often lost in large hotels. In this business first impression really matters. If you have a sign, always make sure it’s accurate in displaying whether you have vacancies or not. Always maintain your garden to make sure it’s neat and tidy as this shows to your guests that you take pride in your guesthouse and the interior is likely to be well arranged.

Clean, high quality bedding is a necessity as comfort should be at the forefront of your aim as the owner of a Guest House. Make it a point of duty not to forget the small things which need cleaning, and always ensure that everything’s pristine and make a checklist if it helps you to remember every single aspect of the room which needs cleaning. We also suggest that you add a touch of luxury to your guest rooms by laying out dressing gowns, towels and slippers for your guests.

All these small gestures show your guests that you care about them staying. In the hospitality business, customer service is very important, particularly in guest houses, small hotel and B&Bs. A lot of guests choose these options because they enjoy the personal service and often enjoy liaising with the small team of staff.

This is why you always have to show interest in your guests’ lives and activities. Also, giving out tourist advice is a nice touch as you’ll more than likely be well acquainted with the area, and make maps available on request too. We also believe that creating a massive online exposure for your new business is very crucial to your success. In order to continually increase your customer base, you will need to make more people aware of your new guesthouse.

Leveraging social media to promote your business can really help to spread the word. Hosting competitions online can help you gain more fans and followers. When you must have built a concrete fan-base, engage with them to sustain their interest and post any news and events which are to take place at your guesthouse.

Always make it your major main aim to make your guests feel welcome and comfortable in their stay. If you have good food, cleanliness and great service standards, you are more likely to get return customers.

18 Steps to Starting a Guest House Business in South Africa

1. understand the industry.

Indeed South Africa’s hospitality sector is expected to growth more in the next five years on the back of rising room rates and growing tourism numbers. Reports project the overall occupancy rate across all sectors in south africa to rise to an estimated 58.4% in 2018, with total room revenue expected to reach R28.7-billion.

Occupancy rates in South Africa’s hotels are expected to grow from 58.9% in 2013 to 71.1% in 2018, overtaking guest houses, bush lodges and guest farms to become the leading category once more.

Experts believe that one of the most significant developments in 2013 in the South African hospitality industry was the rise in average room rates, which increased 8.4%, well above the 5.9% rate of inflation. Even with the recent economic uncertainty, the total number of foreign overnight visitors to South Africa rose by 3.9% in 2013, down from the 10.2% increase in 2012, but still reflecting continued growth in foreign travel to South Africa.

Without doubt tourism is considered to be a key element in South Africa’s economy, and is recognized in the National Development Plan as a very important driver of economic and employment growth. We believe that the growing tourist numbers in the country will fuel growth in the accommodation industry across the African continent during the next five years.

Reports have it that the overall spending on rooms of all categories in South Africa rose by 14% to R17.3-billion in 2013, showing an increase in “stay unit nights” and an 8.4% rise in the average room rate. Stay unit nights for hotels rose 4.8% in 2013, whereas stay unit nights for guest houses and guest farms fell 4.5%.

The overall occupancy rate across all sectors rose to 52.6% in 2013. Even though guest houses and guest farms had the highest occupancy rate at 60.5%, it was the only category to show a decline in 2013, having posted an occupancy rate of 65.3% in 2012.

Hotels accounted for 71% of total accommodation revenue in 2013, with experts believing this share would rise to 73% by 2018. Have it in mind that the pick-up in hotel occupancy rates has put into place a new activity in South Africa’s hospitality industry, with a lot of major hotel chains in the process of upgrading facilities, renovating their properties or making plans to open new hotels.

We believe there are about 63, 600 hotel rooms available, up from 60, 900 in 2013. It’s very important to also state that South Africa’s overall room capacity is expected to grow at a 1.3% compound annual rate to 123, 400 in 2018, from 115, 700 in 2013. Guest houses are expected to be the fastest-growing category in respect of the availability of rooms, averaging 3.7% compounded annually, with slower growth in other areas.

2. Conduct Market Research and Feasibility Studies

• Demographics and Psychographics

You can’t just wake up and decide to start this business. First and foremost, you will have to go through a hard core planning stage, and that includes researching the type of guests you can attract and planning how you’ll attract them. Below are typical target markets you can possibly attract in this business. If you can pull in two, or several, that’s great. But you’ll need to attract at least one, or get creative and come up with something else that will bring ample visitors.

Everyone enjoys a romantic gateway and it is a sizable market in South Africa. When people gateway for a romantic weekend or moment, it creates a target market you can attract when done right.

• College or university

If your guest house is located in a college town, it provides you with a built-in market, at least during certain times of the year. Football games, homecomings and graduations, not to mention new student orientations and parents’ weekends, conferences and other academic or public events can bring visitors in droves. Don’t forget that your business will be seasonal unless you can augment it with another target market.

• Locals’ extra bedroom

People around you can also be a potential client to your business. You can develop a tidy additional market by promoting yourself to locals as “your extra bedrooms.” Somebody is always having a wedding, family reunion or other event for which they invite lots of out-of-town visitors, and then have nowhere to put them up. You can fill the gap.

These are vacationers who are out to have real fun and enjoy themselves. Visiting amusement parks, national parks and museums, beachcombing, boating, skiing, sightseeing and, of course, shopping are their modus operandi. So if you’re close to any sort of natural or man-made attraction that brings people in, you’ve got a great market. The tourist market can be extremely seasonal, but it all depends on your location.

• Business travellers

Be it traveling salespeople or company presidents, business trippers account for a lot of lodging stays. South Africa can indeed boast of one or two large corporations that generate a lot of income, and a fair amount of business travel. As an added bonus, business travel, unlike the tourist trade, isn’t seasonal.

3. Decide Which Niche to Concentrate On

Customers in this industry are always looking out for a great personal touch, so plan on offering services that will make their stay more comfortable. Have it in mind that vacationers at Guest houses typically look for relaxation, so you could build a secluded outdoor area for guests to lounge.

Some guest houses usually don’t offer things like gyms or restaurants, but you could include these as well. Just keep in mind that every extra service you decide to offer is an additional financial cost, both to build and maintain.

Be sure to budget carefully to avoid losing money on these ventures. Customers and target audience are basically what differentiate the paths businesses take in this industry. Be sure to research carefully before you start this business, as your location will be a major determinant in this business.

The Level of Competition in the Industry

Just like we stated above, tourism is a major contributor to the South African economy, as well as a significant source of foreign exchange revenues, contributing to 9.3% of country’s GDP. South Africa is a developing, young country with a median age of 25.9 years and has a population of 52.98 million. It has a well-developed constitutional democracy.

The country has brought economic reforms, which have led to macroeconomic stability and one of the largest stock exchanges in the world. The country has a well-developed transport infrastructure, sound macro conditions and robust financial and legal framework.

South Africa is among the top developing nations but faces problems like skills deficit, poor labour relations, lack of electricity, violent crimes, corruption, unemployment and immigration laws. But to attract foreign investors, the government has initiated simple tax rules, investment incentives, protection of intellectual rights, and better regulatory policies through foreign investment grant, skills support program, the Protection of Investment Act, and the strategic industrial project programs.

South Africa has great potential for foreign investors as it is largely a free market economy, has a transparent regulatory framework, a large population, access to raw materials and political stability, with the country being the third largest FDI recipient in Africa with most of it going to the telecommunications sector.

The government is taking steps to curb the unemployment rate and provide continuous electricity. It has a large English-speaking population and hence is a popular choice for foreign investment, which in turn heightens the fight for market share in the hospitality industry.

4. Know Your Major Competitors in the Industry

• Amazulu Lodge
• Battlefields Country Lodge
• Aberni on sea
• Le Manior de Brendel Estate
• Southern light country house
• The woodpecker House
• Monto Christo Country Lodge
• Hyde Park villa
• L’Auberge country hideaway

Economic Analysis

You need to understand that the very best guesthouses start up with solid business models and practices. Prices at these places are usually higher than competitors, not lower. A strong Business model, professional practices, and higher prices allow the owner to continually update, refresh and maintain the facilities, and pay staff well.

Note that a virtuous cycle develops for guesthouses that function professionally, while a quickly degenerating cycle develops for guesthouses that operate without care for facilities, staff, and guests. This is why getting the business model “right” for a specific town, city, and country situation is necessary. The recipe will be a bit different in each place but there are some foundation pieces that seem to be universal.

The business model of a guesthouse is solely focused on the quality of the room, the overall facility, and owner’s manner of running the place, which is why to maximize profits, the guesthouse owner provides a social, non-party atmosphere, cozy comfortable rooms with character, and excellent facilities.

A Guest House is a “safe sanctuary” from which to explore a city and area, place to return to at the end of a day of exploring to share experiences with others, get advice, rest, refresh, feel emotionally safe, and get culturally grounded. In exchange for crafting this experience, the guesthouse owner can charge much more than a hostel and have longer-staying and better guests.

5. Decide Whether to Buy a Franchise or Start from Scratch

When thinking of starting this business, you have to decide if you will buy an existing guest house or build a new one. This is the first decision you’ll have to make when you settle on a town. You could either find a guest house an owner is looking to sell, or you could build a new one from scratch. But then there are positives and negatives to each option that you should weigh carefully before making your decision.

If you decide to buy an existing guest house it will probably be cheaper than building a new one, unless the property needs major renovations. You may also be able to keep some of the staff, which will simplify your employment hunt later on. But if the hotel you’re buying has a bad reputation, your profits may suffer. Also when you buy an existing guest house, you will have to work hard to advertise that the hotel is under a new management.

It will be more expansive to build and start your guest house business from the scratch, but you will be able to build it the exact way you want, which means you could design it for a specific niche or market. But then if you build a new hotel, you’ll have to work hard to advertise your grand opening to get customers. Also make sure that when building a new hotel you check to make sure the area is zoned for hotels and guest houses.

6. Know the Possible Threats and Challenges You Will Face

When starting a guest house, you’ll probably need to get startup capital from either a bank or private investor. Either option will want to see a business plan to determine if your business is worth investing in. A good business plan is beneficial for you to organize your goals for your guest house and get a clear picture of how to make it a success. The possible challenges of starting this business includes…

• Choice of Location
• Getting experienced workers
• Attracting customers
• Industry competition
• Lack of steady electricity
• High cost of electricity

7. Choose the Most Suitable Legal Entity

Choosing your legal entity might be the hardest decision you will have to make. It’s very important to wisely choose the entity that’s best for your business, make changes when necessary, and take advantage of the benefits of your business structure. The following issues could have a major impact on your entity decision:

• The amount of your earnings and deductions
• Tax planning to avoid paying too much self-employment tax
• Liability exposure from your product, services, or location
• Whether you have a partner or investor in the business
• Where you live and are conducting business
• Business goals and marketing plans
• The administrative costs and demands of setting up certain entities

When it comes to your guest house business, you may be registered as a sole proprietor, or your business may be registered as a Private Limited Company (Pty) Ltd or close corporation (CC). Chambers of Commerce are a good contact through which to obtain details of organizations that can give advice on the structuring of your business.

8. Choose a Catchy Business Name

• Entrada Resort
• Fountainhead Reserve
• Papuan Beach Lodge
• Historic guest House
• The Houstonian Hotel
• Kahala guest House
• The Lakefront
• South Sands
• Knights Inn
• Land’s End Lodge
• Cedar Guest House
• Crescent Lodge
• Denali Resort
• Enchanted Isle
• Sunset’s View
• The Hot Springs Lodge

9. Discuss with an Agent to Know the Best Insurance Policies for You

The insurance you will need for this business is a unique type of insurance, falling in a category between personal and business insurance. The owners of guesthouses, Bed And Breakfasts and even Boutique Hotels are faced with some rather unique perils, and they need to find the correct insurance to cover them against these perils. Note that an excellent guesthouse insurance should be tailored to each individual guesthouse, meeting both the needs and the budgets of the owners.

• Insurance to cover damage to buildings and structures
• Insurance to cover appliance maintenance and household maintenance services
• Insurance to cover threats to business / operational wellness
• Insurance to cover transportation risks
• Insuring contents
• Insurance to cover threats presented by guests
• Insurance to cover damage caused by employees

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

You need to understand that intellectual property system is applicable to the tourism sector. Developing and exploiting brands is particularly appropriate to the service sector and thus to the tourism sector. Core to developing and exploiting a brand are trademarks, geographical indications (certification marks, collective marks or a sui generis system) or industrial designs as well as other intellectual property rights.

Trademarks are any sign capable of distinguishing the goods or services of one business from another. Today even sound, shape or smell could amount to a trademark provided they function as trademarks in the marketplace. We believe that intellectual property system protects such marks, allowing the owner to have exclusive use of that mark and providing him the right to prevent anyone else from using that mark with respect to the same or similar goods.

You need to understand there are other categories of trademarks which are very important. Collective marks are owned by an association whose members use them to identify themselves with a level of quality or other requirements set by the association.

Examples of such associations would be those representing accountants, engineers, or architects. Certification marks are given for compliance with defined standards, but are not confined to any membership. They may be granted to anyone whose goods or services meet certain established standards.

A geographical indication (GI) is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that origin. An appellation of origin (AO) is a special kind of GI.

Note that an industrial design is the ornamental or aesthetic aspect of an article. The design may consist of three-dimensional features, such as the shape or surface of an article, or of two-dimensional features, such as patterns, lines or colour.

11. Get the Necessary Professional Certification

The hospitality industry is becoming increasingly competitive not only in South Africa, but all over the world and professionals are always under pressure to differentiate themselves from the competition. If an individual has gone through the process of obtaining professional certification, having the credentials at hand will give them an advantage over other businesses without the certification when looking to attract customers.

12. Get the Necessary Legal Documents You Need to Operate

Just like we stated above, a guest house is a commercial accommodation business offering between 4-16 bedrooms which has, as its primary source of business, the supply of tourist accommodation. Just like other countries, there policies you need to adhere to in South Africa if you hope to achieve success in this industry.

A Draft Policy prepared by the Provincial Planning and Development Commission (PPDC) states that the following standards should be adhered to regarding guest houses:

• Land Use Zoning – Approach the Local Municipality to establish whether the Town Planning Scheme permits the activity on the site  you have chosen;
• The establishment of a new enterprise in which the present use is substantially changed and may require a scoping report to be prepared in terms of the National Environmental Management Act (107 of 1998). The Provincial Departments of Agriculture, Environmental Affairs and Rural Development should be consulted in this regard;
• In the case of the establishment of a new enterprise, special consent in terms of the Planning and Development Act (5 of 1998) must be obtained from the Local Council prior to establishment;
• Licensing and Registration – Approach the Town Planning Department of the Local Council for permission to go ahead with your plans. Once permission has been obtained, register with the District Municipality;
• A trading license must be purchased from the Business Licensing Department of the Local Council at a cost of R200 for the sale of perishable food;
• Your application for a trading license will be circulated by the Local Council to the Health, Fire and Building inspectors, the Town Planning Department, and, in some cases, the Development Services Board (DSB). These bodies will ensure that your plans comply with their regulations before the application can be approved;
• You must register your establishment with your provincial tourism authority, in this case, TKZN.
• Neighbours are to be advised about the proposed business
• Any objections received from neighbours must be motivated by the person objecting (complainant). A special consent application can then be made in terms of the Development and Planning Act, by the owner, to the Local Council. For:
• Group Housing/Cluster Area Applications – the owner is to obtain consent from the Body Corporate or the Home Owner’s Association, prior to submitting an application to the Local Council;
• Title deed conditions/restrictions become applicable only when the predominant use of the land is other than that of the current usage;
• Road and directional signage is to be in line with the existing character of the locality and to adopt the signage policy of the Local Council, or any other regulations that exist. Signage erected on state roads in rural areas will be subject to the policy of the Provincial Department of Transport;
• Neon lighting shall be in line with the existing character of the locality.

13. Raise the Needed Startup Capital

With a good business plan, you’ll be able to explain whether your guest house will be a lucrative venture, which will convince investors to provide you with the money you’ll need. You have two choices for acquiring capital, and may end up using a combination of both.

First you can get a loan from a bank for a few months to a few years, but it all depends on the type of loan. This can cover your opening costs and your first few months of operating expenses.

• Private investors

We believe that these can be friends, family, or other business owners interested in making an investment. Always ensure you define whether these people are just providing a loan that you will pay back with interest, or if they’re actually buying into your company. It would be helpful to draw up a contract defining the terms of your agreement and having it notarized to prevent problems in the future.

14. Choose a Suitable Location for your Business

Just before you start getting bothered about exact locations, you’ll have to think more broadly and decide what city or town you want your guest house in. At the minimum, you’ll have to consider what the tourism industry in a given area is like.

Since you are building a guest house and not a chain, your ideal customers will be vacationers and sightseers instead of employees on business trips. So we suggest you choose an area that people would want to visit. When it comes to zoning and land planning usage, we suggest you consult with TKZN whether you have enough space to cope with the number of people you wish to accommodate. The following questions should be asked:

• Is the site you have chosen quiet enough for people to sleep undisturbed?
• Are the streets well-kept and maintained?
• Is the site free from unpleasant odors?
• Is the site easy to find for people using their own transport or using public transport?

The Local Municipality controls the erection of any signs. If new access onto streets is needed, the Local Municipality will usually construct them at the cost of the developer. Permission must be obtained from the Provincial Department of Transport to construct new access points onto main roads outside of Local Municipality areas.

15. Hire Employees for your Technical and Manpower Needs

In this business, the size of your staff will greatly depend on the size of your guest house. A guest house with multiple rooms, even small ones like yours, usually need a team of workers to keep them running smoothly.

• A maintenance worker

We believe that one or two maintenance workers should be enough for a Guest house. They need to be general-purpose workers who can perform a large range of tasks like plumbing, painting, repair work, electrical, etc. That way you can let your maintenance men take care of smaller tasks and if they can’t handle something, you can hire a professional to do a comprehensive job.

You will need at least one cook for your guest house. Guest houses ideally offer breakfast, so you may only need to have the cook in for a few hours a day.

• Housekeepers

To succeed in this business, you need to make cleanliness your number one priority. We all can agree that a dirty guest house will get a bad reputation quickly and customers won’t come. It all depends on the size of your guest house; you may need only one housekeeper or a team. A housekeeper can usually cover about 10-15 rooms per day, so keep this in mind when hiring.

Guest houses are always expected to have someone on the front desk at all times. You could do this yourself during some hours, but you’ll need a team to staff the desk 24 hours a day.

The Service Delivery Process of the Business

You need to know that your prices will determine your level of profit in this business. Your nightly rates will vary depending on local competition, your operating costs, the season, and a myriad of other factors. Note that the general rule when setting prices is to keep them low enough to attract customers and high enough to earn you a profit. There are a number of things to keep in mind when coming up with prices.

• Outline your costs

We advise you calculate exactly how much it will cost to keep your guest house open every day. Then multiply this to find out how much it will cost to run your hotel on the monthly basis. Your income will have to at least cover your monthly expenses or you won’t be able to stay open.

• Adjust prices based on the season

We suggest you adjust price during busy season, you can afford to make prices higher because more people are looking to go on vacation. In slower seasons, make your rates lower to attract off-season customers.

• Cut costs when necessary

You need to understand that even with good financial management; your guest house will almost certainly experience slower times. This is why you should analyze your costs regularly and decide which ones are necessary and which ones you can do without. In slow times, cut out unnecessary costs to save money.

• Know what customers are willing to pay

Indeed it will take some trial and error. At that point when you’re just starting out, your only guideline may be your operating costs. But after a few months when you notice that your rooms are constantly booked, you can afford to raise prices. If you’re having trouble getting customers, lower your prices. You can also survey customers after they stay and ask if they found the room rate fair.

16. Write a Marketing Plan Packed with ideas & Strategies

The best guesthouses have some pretty clear principles that make them successful. It’s not just enough to operate professionally, in a friendly manner, and with awesome service; you have to market and promote your business to let people know where you are and what you offer. Marketing Principles for your Guesthouse may include…

Amazing service

• Customers are communicated with over the internet in a rapid time frame when they contact the guesthouse with a query or reservation booking. Best: Within 12 hours. At worst, within 24 hours. In some countries, 12 hours might even seem long, but we must recognize that guests may be inquiring from other time zones and no guesthouse owner is expected to answer emails 24 hours a day.
• Customers are greeted warmly upon arrival by the owner or a staff. 100% of the time. No excuses for less than 100%. This is the first time the customer may be in the country, city, and culture. They are hyper-sensitive to everything.
• Customers are shown personally to their rooms and are given a full introduction to the guesthouse, making them both feel at home and safe.
• Guests are supported fully with their travel information, comfort, and social needs during the stay. Guesthouse owners and staff learn very quickly how to personally and professionally manage guest social needs.
• Guests are treated just as well when they leave as when they arrive. This cements the relationship and creates the natural opportunity to ask them for a Trip Advisor rating and referrals.

Establish mutually beneficial relationships with other hospitality service providers in the area

• It is almost ridiculous how well some highly successful guesthouses integrate with other hospitality service providers, including local restaurants, shuttle operators, and tour guides. Note that everyone doesn’t just earn a commission on bookings in both directions, but guesthouse owners are in the perfect position of trusted advisors to the guest, building their own credibility and customer satisfaction from awesome integrated guest experiences.

17. Develop Iron-clad Competitive Strategies to Help You Win

Competition in this business is intense and the ever growing population of South Africa coupled with the growing tourism rate are not helping issues at all. Policies to put in place to ensure you come out on top in this industry may include…

Make your customers feel welcome, safe, certain, comfortable, and relaxed in your guesthouse

• The owner or a staff member speaks the local language and usually at least one other, such as English.
• Customers of all ages, sexes, and styles of being are welcomed and made to feel at home.
• The owner has good welcoming skills.
• The owner is friendly and hospitable.
• The owner is available during the day to greet, settle, and help travellers.
• Staff are managed well, treated like family, and paid well. This results in the staff, and not just the owner, being friendly with guests.
• Staff have a clear and professional system for doing their jobs. They are clearly trained and empowered to feel part of the success of the guesthouse.
• The owner and staff are culturally adept and adaptable, meeting the needs of different traveller profiles.
• The owner and staff have good problem solving skills.
• Staff are able to take initiative in meeting guest needs and in managing guest expectations proactively and in response to issues that arise.
• Staff have uniforms, making it clear that they are staff.
• The guesthouse handles online booking queries promptly, professionally, and personally, creating a relationship with potential guests before they even arrive.

Make your rooms intimate, safe, comfortable, and private

• A locking door that provides proper noise, light, and intrusion protection.
• Windows with natural light coming in. Thick, full curtains or blinds.
• Comfortable, newer mattresses.
• Mattress covers and full sized higher quality bed sheets. Both are new and in excellent condition
• Generous blanket options, for people who need more warmth.
• At least 2 full sized, thick, new pillows per double or large sized bed.
• Decorated – the room has some character.
• Warm coloured paint
• No fluorescent lighting in the room. The room is well lit with incandescent, halogen, or full spectrum LED bulbs.
• A side table with a reading lamp.
• Storage space such as a shelf, dresser, luggage stand and/or closet.
• Wood that adds to the feeling of warmth in the room.
• Recently painted
• Very well maintained. Everything works in the room.
• Simple but strong, solid furniture. Not clunky, tiny, or worn out.
• Double pane windows for quietness, if in a noisier and colder area. At least solid single pane windows in places where double pane are either not available or are prohibitively expensive.

Your bathrooms are sanitary, nurturing, available, and certain .

• Very clean. If shared, cleaned 2 or more times a day.
• 24×7 hot water.
• Sufficient water pressure.
• A spacious shower stall
• Well lit with warm, bright, incandescent lighting.
• Instructions posted for anything unusual or potentially unclear about the bathroom facilities.
• Well stocked with toilet paper and hand towels.
• Bath towels provided for guests.
• Ventilated with an exhaust fan.
• No drain smells. Plumbed properly.
• If shared, a locking door that provides full privacy protection.
• Sufficient space to move around and change clothing when showering.
• Ceramic tiled throughout.
• Modern fixtures.
• Well maintained – paint, appliances and fixtures, tile grout, lighting.
• Decorated – with some character.
• A shelf for belongings. Hooks for clothes. Bars for towels. Soap shelf in the shower. Vanity or shelf for toiletries. Little details such as these are important!

Spacious, friendly, comfortable, welcoming, and social common area(s).

• Common area is separate from the bedroom area to protect from noise transference.
• Contained space (intimate) but open and bright.
• Quiet spaces and social spaces.
• Variety of seating options, including couch, hammock, armchair, and table & chairs available.
• Chairs have cushions.
• Lots of plants.
• Optimal: A rooftop terrace, patio, or lounge in a warm climate country. Even better: With a nice view.
• Non-smoking
• Decorated – character.
• Books and games.
• Guests feel free to be themselves – not being watched suspiciously by staff.
• Not a thoroughfare for staff.
• No fluorescent lighting. A mix of festive, functional incandescent, halogen, and full-spectrum LED lighting.
• Lit well at night.
• Lots of electrical outlets for computer and smartphone users.
• Good Wi-Fi service in common area(s).

Offer extra value and special character

• Organize social events
• Free breakfasts that are both tasty and generously portion-sized.
• Towel service for rooms and local beach (if applicable)
• Internet computer station with printer.
• Free filtered water access.
• Beer, soft drinks, juices, and snacks for sale.
• Kitchen for guests to use.
• Wi-Fi service throughout the guesthouse.
• “Above and beyond” service from the owner and staff.
• Bicycle, boat or other rentals available at low cost to guests.

18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

Have it in mind that it’s not enough to just get a license and a good staff to run your guest house business. We believe that the most important preparation to make is how to get your business to potential customers, to let them know that you exist. You can do this by advertising.

• Décor and food

You need to understand that look and feel are pleasing factors in the hospitality industry. Ambiance of the room and other parts of the hotel like lobby, meeting rooms will help you distinguish from other hotels. Is your hotel room well decorated? What special food/drinks do you offer in the restaurants?

• Packages and deals

Note that travellers look for various packages and deals while booking their stay. If you offer them a spa package along with the booking or any add-on service for direct booking, it will definitely help in sealing their decision to choose your hotel. Add some value to the packages and use it to differentiate from your competitors.

• Online marketing

Also note that being present on search channels and listings is very crucial to set you apart from your competitors, especially if a few of them still don’t have a website. With effective SEO, you can make sure that your guest house website will be discoverable by the travelers easily, and participating in the local listings will help travelers identify you without going through the OTAs.

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Download a Free Business Plan Template

What is a business plan.

The written plan of goals you want to achieve with your business, and how you want to achieve them, is called a business plan. It is a decision-making tool used when beginning or extending a venture.

Any new business requires a business plan to ensure that the business can make a profit. Fund-seeking entrepreneurs use a formal business plan to convince investors to contribute towards the capital of the business.

Existing businesses – looking to expand or change the business – also use business plans to prospect for new business, attract key employees or deal with suppliers. By revising their business plan regularly, existing companies can devise strategies to manage their companies better.

Most commonly, a business plan is used to apply for a bank loan to fund a business. To learn how to create a business plan for a bank in South Africa, see FNB and Standard Bank’s business plan guidelines. You can also download Standard Bank’s free business plan template in Word or PDF format.

A business plan consists of three primary parts:

• The business concept – details about the industry, the structure of the business, the product or service and the strategy for the success of the business.
• The marketplace section – an analytical description of potential customers and the strategy for achieving success against competitors.
• The financial section – the income and cash flow statement, balance sheet and other financial information.

The length of a business plan varies depending on the nature of the business and the purpose of the business plan. Typically, a business plan is 15 to 20 pages long. It usually details the goals for the business for the next three to five years.

An important part of compiling a business plan is in-depth research into the market and industry. Try to gain as much insight into the market you are targeting by talking to business owners, suppliers, potential customers, existing customers, staff members, business experts, etc. Also, research the industry online.

Business plan format

Although there are several types, the key components of all business plans are essentially the same. The format varies based on who the intended reader of the business plan is. Here is an example of a standard business plan format:

1. Table of Contents (1 page)

The table of contents page should include the correct page numbers of the sections of the business plan. Therefore, it is best to write this page last. In addition to the table of contents page, the plan must also have a cover and a title page.

2.  Executive Summary (2 pages)

The purpose of the executive summary of a business plan is to entice the reader to read the rest of the plan. The executive summary is an overview of the key aspects of the plan. It should be compelling but also concise.

The executive summary should include:

• the business concept (a description of the business, product, market and target market);
• key financial aspects (sales, profits, cash flows, investment returns and capital requirements); and
• a short company overview (type of company, date formed, owners and key personnel and achievements).

3. Company Overview (1 – 2 pages)

This section is a high-level overview of the company and the industry in which it operates. It is a description of the business, the product and the industry.

The following should be included in the company overview:

• The name of the company and the type of ownership and registration;
• Details about the business location (address, zoning, reason for choosing location, monthly rentals, etc.)
• Significant assets and financial contributions to the business;
• The mission statement of the business;
• Company objectives and goals;
• The main features of the industry in which the business will operate;
• The most important company strengths and core competencies;
• An explanation of the product, target market and profitability of the plan.

4. The Opportunity, Industry and Market Description (2 – 3 pages)

The research you conducted will come into play in this section. This section offers a detailed explanation of the market and industry and the business’ position therein.

They key is to determine who your target market is through a market analysis. Then clearly explain how your products/services will fulfil the needs of your target market. A market analysis also helps to determine pricing, distribution strategies and growth potential within the industry.

Describe the following:

• The opportunity – the gap in the market;
• The industry – the forces affecting the industry (i.e. obstacles to entry, customers, suppliers, substitute products and competition); and
• The market – insights into the target market (i.e. size, growth and trends).

5. Strategy (1-2 pages)

Detail your positioning strategy and how the business will compete in the chosen market. In other words, what is unique about your product/service and how will the target market benefit from what you have to offer.

6. Business Model Explanation (1 page)

The business model depicts how the business will make money/profit. A business model covers the following aspects:

• Sources of revenue;
• Costs involved in generating the revenue;
• The profitability of the business (revenue minus costs);
• The investment required to get the business up and running; and
• Success factors and assumptions for making the profit model work.

7. Management and Organisation (2 pages)

The biographies of the members of your management team and their roles in the business. Who will be responsible for running the business and why are they well-suited to the task?

This section should include:

• The founders of the company and their qualifications and experience;
• The day-to-day management team and their individual competencies and responsibilities;
• The type of support staff needed to run the business; and
• An organisational chart to show the management hierarchy.

8. Marketing Plan (2 – 3 pages)

The marketing plan is a comprehensive explanation of your marketing strategy. In other words, how will you sell your service/product to your target market?

Your marketing plan should include:

• The value of your product/service to customers;
• A detailed description of the target market;
• How you want your target market to perceive your product/service;
• The pricing strategy for the product/service;
• Sales and distribution channels that will be used to get the product/service to the customer; and
• The promotion strategy (budget, public relations activities, promotions, advertising, etc.).

9. Operational Plan (2 pages)

The operational plan is a description of how the business will function. Include a description of the following:

• The operating cycle – how the business will deliver the service or create and sell the product;
• How skills and materials will be sourced;
• Which tasks will be outsourced and how business relationships will be managed; and
• The cash payment cycle of the business.

10. Financial Plan (3 – 5 pages)

A very important part of any business plan is the financial plan. It is a reasonable projection of the company’s financial future.

A good financial plan will determine how much capital the business needs to launch and/or grow. This section is especially important to potential investors and banks – who will determine the odds for the continued survival of the company based on this information.

A financial plan should include:

• Start-up expenses and capital: What it would cost to start/grow the company and how the money will be generated.
• Profit and loss projections/income statement : Financial sales and expenses projections (i.e. income, cost of goods, gross profit margin, net profit, total expenses, etc.).
• Cash flow projection: Reflects how much cash will be needed to cover expenses and when it will be needed. The cash flow projection amounts to a profit or loss at the end of each month or year.
• A balance sheet: A summary of the business’ equity, assets and liabilities.
• A break-even calculation

Income statements and cash flow projections must be generated for every month of the first year, every quarter of the second year and annually for every year thereafter. The balance sheet is only generated on an annual basis.

Short summaries of the analyses of the income statement, cash flow projection and balance sheet must also be included. Do not include too much detail in this section. Additional projections, charts and calculations must be added to the Appendix.

11. Appendix

Additional reference documents are included in the appendix. This could include:

• Brochures and advertising materials;
• Industry studies and market research;
• Plans and blueprints;
• Photos and maps of location;
• Magazine or other articles;
• Detailed lists of equipment owned or to be purchased;
• Copies of leases and contracts;
• Letters of support from future customers;
• List of assets available as collateral for a loan; and/or
• Detailed financial calculations and projections.

Find more business plan examples and templates from Entrepreneur Magazine .

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Business Plan Template for Small Businesses

This Business Plan template can help you with the following – formulate a clear statement of your business mission and vision, put together a roadmap and timetable for achieving your goals and objectives and clear description of your marketing strategies. (Courtesy: New Discovery Business Solutions)

Your business plan is the blue-print of your business and provides a roadmap for future development. Your business plan holds a clear statement of your business mission and vision and provides a roadmap and timetable for achieving your goals and objectives

Download the Business Plan template to:

• Test out a new idea to see if it holds real promise of success
• Help you obtain financing and attract potential investors
• Identify and arrange strategic alliances

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BUSINESS PLAN FOR THE PROPOSED JUSTEMA SAFARI LODGE

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What Hospitality Design Architects Do Best

The reference to Hospitality Architecture covers a broad spectrum of business and leisure hotels and resorts as well as theme parks, food and drink outlets, and transportation. As one of the leading Hospitality Architectural and Interior Design firms in Africa, Bentel Associates International’s team of hospitality design architects understands that providing an extraordinary guest experience is key, whilst operational planning is as important in making sure that these areas are adequately serviced. However, a hotel is not designed linearly or solely on the basis of aesthetics and functionality; on the contrary, proper design takes into consideration all aspects of the visitor’s stay, both tangible and emotional. And, of course, it ends with one key goal: to create unique experiences for the traveler.

Now faced with the recent global pandemic, hospitality designers are redefining existing projects and beginning new ones, with a focus for the future on social distancing and contact-free systems. That means we can expect to see fundamental changes to hotel meeting spaces, lobbies, guest rooms, and food and beverage options in the near future. In particular, multifunctional and flexible spaces will be incorporated and conference rooms will ideally require a direct connection to the outdoors, and more natural and ecological solutions.

In form and function, hotels are very different from other types of real estate and while even the most experienced hotel Architect or Interior Designer will not fully understand the operational aspects of the property, repeated experience working alongside hotel managers is fundamental to providing an efficient and effective project. A hotel design professional, especially those in the creative phases of concept and interior design, must be able to provide a portfolio of at least ten related hotel projects that match the property segment, type, scale, and geography. Compromise on the professional experience will cause time delays where the operator’s technical team has to explain and educate, or repetitively ask for adjustments and resubmission. The inefficiency of the hotel property in the design process will have a fourfold impact on the investment, due to (i) elevated cost of the build, (ii) increased operating costs during the lifetime of the property, (iii) reduced or lost revenue potential of the hotel operations, and (iv) reduced value of the asset.

Therefore in selecting an Architectural firm for a project, the most important aspect is experience – past experience as well as the brand experience. The firm must be able to demonstrate a reputable portfolio of work. Hospitality design has a multitude of aspects to coordinate during the design process, and the best Architectural firm for the project will be one that understands the process and complexities required to successfully deliver a project from inception to handover, final commissioning, and brand sign-off.  Another aspect is the team structure – the firm must be able to showcase, firstly, that the team of Architects involved is experienced enough. This includes seasoned professionals, but also young Architects with fresh perspectives. No matter where the hotel is being built, it’s important to provide consideration to the prospective Architectural firm and how their various hotel and resort projects integrate with the environment and how the design complements its surroundings. Design process and understanding is an important consideration.

Bentel has the requisite skill set and experience to design well-planned and aesthetically pleasing hotels and resorts, having successfully completed numerous projects in South Africa, as well as across Africa, the Indian Ocean Islands, and the Middle-East.

When one considers Bentel’s long history in hospitality design, some of the key projects in South Africa, and across the African continent, include: Montecasino Entertainment complex (Sandton), The Palazzo (Sandton), Hilton Sandton (Sandton), Da Vinci Hotel (Sandton), Michelangelo Towers (Sandton), Johannesburg Marriott Hotel Melrose Arch (Johannesburg), Marriott Executive Apartments Johannesburg Melrose Arch (Johannesburg), Southern Sun OR Tambo (Johannesburg), Radisson Hotel and Convention Centre Johannesburg, OR Tambo (Johannesburg), Stay Easy Pietermaritzburg (Pietermaritzburg), Stay Easy Lusaka (Lusaka, Zambia) and Le Meridien Hotel Accra (Accra, Ghana).

Some frequently asked question about Hospitality Architecture and Design include the following:

• How does an Architect start designing a hotel or a resort?
• How do Architects design for hospitality with the future in mind?;
• Which is the best Architectural firm to appoint?;
• Why is context so important when designing a hotel or resort?;
• Which is more important – the guest experience or the back-of-house and service areas?;
• What makes for a successful hotel or resort project from an Architectural perspective?;
• What is the relationship between Architecture and Interior Design in a hospitality project?;

We have been privileged to have been given the opportunity by our numerous hospitality Clients to participate in some exceptional projects, which have been recognized by various award platforms. Awards are not our motivation, rather the recognition that we are positively contributing to the urban environment and designing responsible and well-planned hotels and resorts.

A number of Bentel’s hospitality projects have received recognition over the years, with the awarding of industry awards for excellence in the field of hospitality Architectural and Interior Design. Some of our recent awards include the winning of a 2018 African Property Award for Best Hotel Architecture ‘Un-Built’ in South Africa for the 390-key Marriott Hotel and Marriott Executive Apartments in Johannesburg. The same project received a 2020 Africa Property Award, also for best Hotel Architecture, but this time for ‘Built’ in South Africa.

In a conclusion, it is apparent that it is important for a Client to consider the prior experience and relevant expertise that a firm has when appointing an Architect or Interior Designer for a hospitality project. Simply put, this type of project requires the ‘best firm for the job’, so-to-speak across a number of criteria.  In Africa, hospitality is not a mature asset class, when compared to other countries or regions across the world. This offers a unique opportunity for the variety of local Africa-based professionals to participate in the growth of tourism across the region.

Our extensive portfolio includes retail architecture , residential architecture , commercial architecture and much more.