How to start a hotel business

A business with en-suite profit. Read our guide to see if you're suited to the busy and potentially lucrative hotel business...

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Identifying a market with growth potential is key to a successful business; so why not set up in the hotel trade and tap into the burgeoning tourism market?

According the British Hospitality Association (BHA), the hospitality industry now supports more than 2.7 million people. The hotel industry represents a hugely important part of it, with more than 45,000 establishments across the UK responsible for jobs in hotels and related services.

Total combined turnover for the hotel industry is estimated to exceed £40bn – a significant portion of the £127bn tourist economy.

By 2025 this figure is forecast by accountancy firm Deloitte to rise to £257bn, which is around 10% of the UK’s GDP. It will support 3.8 million jobs at that point, which is around 11% of the UK workforce.

Actual tourism spending in 2013 reached £113bn, with £24bn via international visitors and £89bn from domestic residents. And for every £1,000 generated directly from tourists into the industry, a further £1,800 goes into the economy via the supply chain and consumer spending, Deloitte’s report Tourism: jobs and growth states.

This suggests that despite threats of terrorism, flooding, and bad summer weather in recent years, which have undoubtedly hampered the UK tourism industry, there has been strong growth, particularly following some key international events.

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In 2011, overseas tourists spent £8.6bn in London alone, and this figure increased further in 2012, with the Royal Wedding triggering a honeymoon period in Britain’s hotel and leisure industry.

The 2012 London Olympics boosted the tourism industry further yet, and there is hope that its success will trigger a sustained increase in the number of people spending their holidays in the UK.

And while London predictably accounts for the lion’s share of all inbound visitor spend at 54%, the rest of England at 33%, Scotland at 8% and Wales at 2% generate billions of pounds each.

For other figures on the tourism economy, it’s worth visiting the Visit Britain website, which regularly updates industry data.

So if you enjoy meeting people and have a passion for quality of service, running a hotel could be just the type of business you’re looking for.

What is a hotel business?

David Stanbridge, formerly head of quality of the English Tourism Council (ETC, nowVisitEngland), told us: “A B&B [will] only provide breakfast and it is usually someone’s home, whereas a hotel generally offers all meals and is not a residential property. Guesthouses purely provide facilities for their own guests, while hotels can also offer extra services for non-guests.”

The crux of the hotel business is, of course, the provision of accommodation. The size of the establishment can vary widely, from just a few beds to a Las Vegas-style skyscraper, and while beds are a prerequisite, a hotel owner can also choose to incorporate a range of add-on services, such as a restaurant, conference facilities or health and spa amenities.

Ready to get started? Find out everything you need to know about how to start your own business here.