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Entering the hotel business : opening an establishment

29 Aug, 2019

As the leading tourist destination, France welcomes more than 80 million travellers a year. This trend is benefiting the hotel sector, as the hotel occupancy rate has been steadily increasing over the years. This is why some individuals decide to go into the hotel business by opening an establishment. Although this project requires a large investment, this market can be very lucrative in the long term. If you want to get started on this adventure, take a look at our article full of tips and tricks.

Choose the type of structure and location 

If you wish to open a hotel, there are two solutions:

  • Open a hotel or an independent. This option offers the most freedom. The operator is free to manage his establishment as he wishes. However, it may face strong competition from hotel chains well known to travellers. Therefore, this solution should be considered if the hotelier wishes to open his establishment in an area without too many competitors in the surrounding area.
  • Open a hotel franchise. By choosing this solution, the hotelier benefits from the notoriety of the franchisor’s brand but also from the tools put in place (website, reservation centre, etc.). However, its autonomy in the management of the institution is quite limited.

Once the type of hotel has been defined, the hotelier must choose the location of his establishment. This decision depends on the targeted clientele. Business travellers prefer an establishment close to airports or train stations, while young people prefer to be close to the city centre to go out safely in the evening. If the location of the hotel varies according to the type of traveller, the establishment must be easily accessible and served by public transport.

Comply with the law

Before opening a hotel, certain administrative steps must be taken. The hotelier must announce the existence of the future establishment via a declaration to the prefecture of the department. A health declaration is also necessary to prevent hygiene risks. If work is to be carried out, the hotelier must obtain a building permit from the town hall.

The operation of a hotel is considered to be a commercial activity in its own right, so the manager must register with the RCS to obtain registration of his establishment. Following this step, he or she must choose a legal status in order to carry out his or her activity legally. If the hotelier embarks on this project on his own, he can opt for a self-employed status, an EIRL or an EURL. To open a hotel with several people, you will have to choose between a SARL or a SAS. Each legal status has its own advantages and disadvantages, the choice is made at the discretion of the hotelier, according to his expectations regarding the project.

Since a hotel is considered as an ERP (establishment receiving the public), the hotelier must ensure that it complies with safety standards (alarm system, fire detector …). In addition, since 1 January 2015, a hotel must be able to accommodate travellers with a disability (motor, mental or visual). Accessibility standards have been put in place, particularly with regard to the layout of the rooms but also the signage in the hotel corridors.

Market its offers

Once the establishment is open, the hotelier can start marketing the rooms. For this it is essential to have your own website. In an increasingly connected world, nearly 80% of travellers book their stay online. By creating their own website with booking software, travellers can book live in just a few clicks. A major time saving for hoteliers, they can concentrate on their core business: hospitality.

In order to stand out from his competitors, the hotelier can ask for the ranking of his establishment. Depending on the facilities, infrastructure and services offered, the hotel owner can claim a classification between 1 and 5 stars. The procedure is done on the Atout France online platform. Having your establishment classified is an optional but highly recommended step to gain the confidence of travellers and attract foreign customers.

Promoting a hotel is a fundamental step. Today, digital marketing has revolutionized the way companies communicate. This trend also applies to the hotel sector. It is therefore in the hotel operator’s best interest to develop its presence on social networks in order to gain visibility among the new generation of travellers. Instagram, the image-based social network, is an effective communication tool. Thanks to the published photos, the traveller can discover the interior of a hotel even before staying there. It is important to highlight the assets of the establishment: the view, the setting, the breakfast buffet… Elements that will make travellers want to stay in the hotel.

The opening of a hotel is an expensive project that can scare some individuals. This is why the departments and regions have set up grants to help hoteliers with creation, renovation or modernisation work. In Limousin, the maximum amount of the grant is set at EUR 381 000. This financial assistance can be invaluable for small organizations seeking funding.

29 Aug, 2019