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Creativity is the key to exceptional success in a hotel business

07 September 2023
The hotel industry, often viewed as a realm of tradition and established practices, is ripe for a transformation that only creativity can bring. As travel tastes evolve and consumer expectations rise, standing out in a crowded market becomes an ever-growing challenge. In this environment, creativity isn't just a luxury; it's a necessity. But how can creativity manifest at every stage of establishing a hotel? From understanding the magnetic allure of a destination to aligning stakeholders, from financial planning to conceptual development, creativity can turn a hotel from a mere place to stay into a memorable experience—perhaps even a destination in itself.
This blog post will outline how each crucial step of developing a hotel can be infused with a creative touch. We will guide you through a transformative journey that starts with meticulous research and culminates in a fully realized, imaginative hotel concept designed for financial sustainability and exceptional guest experiences. Whether you're an investor, a stakeholder, or someone intrigued by the evolving landscape of the hospitality industry, this overview offers insight into how creativity can be the secret ingredient for success in your hotel venture. Let's go ahead and start with the destination where you want to build your hotel.

Understand the Destination

Investing in a hotel is a significant decision that requires thorough research and planning. Understanding the destination is crucial as it will affect every aspect of your business. Here are some essential points you should consider about the destination.
  • Attraction: Identify what makes the destination appealing, such as natural scenery, historical landmarks, cultural events, festivals, business hubs, etc.
  • Seasonality: Understand how the destination's appeal varies during the year to understand seasonality by studying occupancy rates and room revenue.
  • Economy and the future: Understand the current economic conditions and forecasts, including changes in demand drivers.
  • Connectivity: Study the infrastructure precisely how easy it is to reach the destination by air, train, road, and sea.
  • Supply: Identify the number and types of accommodation, including traditional hotels, Airbnb, hostels, etc.

Research and Identify Target Groups

Understanding your target group is crucial for making an informed investment decision for your hotel. The starting point here is also why they come to the destination, and once this is clear, you need to understand their financial capacity, behavior, and demographics. Here is an extensive list of what you need to know.
  • Interests: What attracts the target group to this destination? Is it nature, adventure, relaxation, etc.?
  • Amenities Desired: What type of facilities and services do they expect? Spas, guided tours, adventure packages?
  • Accommodation Preferences: Do they prefer budget-friendly options, luxury accommodations, or something in between?
  • Budget Constraints: What is the average spending capacity of the target group? This can guide you in pricing and amenities.
  • Willingness to Pay: Are they willing to pay extra for unique, high-quality experiences?
  • Booking Channels: Where does this group typically book their accommodations? Directly, travel agents, online platforms?
  • Duration of Stay: How long do they typically stay, and does this vary by season?
  • Activities: What activities do they engage in during their stay? Do you think this requires partnerships with local businesses?
  • Peak Seasons: Are there specific times of the year this group prefers to visit?
  • Off-Season Behavior: Do they visit during off-seasons, and if so, what attracts them during this time?
  • Age, Gender, and Family Structure can affect room types, activities, and amenities preferences.
  • Psychographics: Lifestyle, values, and attitudes that might influence their choice of hotel.
  • Current Market Size: Is the target group large enough to sustain the business?
  • Growth Trends: Is the target audience growing? Are more people from this group starting to visit the destination?
  • Unmet Needs: Are there gaps in the market that your hotel could fill?
  • Substitutes: Could alternative accommodations or activities sway this group away from your hotel?
  • Customer Reviews: What are people within this target group saying about existing options? What are the common pain points?
  • Social Media Behavior: What do they share or comment on? This can provide insights into their preferences and experiences they value.
For instance, if the destination mainly attracts nature lovers, a luxury hotel might not be the best fit unless it creatively incorporates natural elements that this group values. You could consider eco-luxury concepts that offer a plush experience, enabling guests to connect deeply with nature.
Knowing your target group inside and out will allow you to tailor every aspect of your hotel— from concept development to marketing— to better meet their needs and expectations, thereby increasing your chances of success.

Financial Feasibility

Financial feasibility is critical in deciding whether to invest in a hotel. This is a first attempt to determine if the project is feasible and a checkpoint to determine if it is viable to continue. It helps you gauge whether the project is possible financially, allowing you to understand the scope of the investment. Here's what you need to include and understand.


What investment will be needed to differentiate the hotel from the competition to meet the needs of the potential underserved guest segments? This step is a preliminary first attempt to
  • Land Acquisition: Cost of the land or the existing building.
  • Construction or Renovation Costs: Estimated cost to construct new facilities or renovate an existing one.
  • Licensing and Permits: Costs associated with obtaining all necessary licenses and permits.
  • Initial Marketing and Branding: Costs to establish the brand and attract initial customers.
  • Debt Financing: If loans are being considered, terms and conditions, interest rates, and payback period.
  • Equity Financing: Amount of owner's investment and any external equity financing.
  • Grants and Subsidies: Any governmental or non-governmental grants or subsidies that could offset costs.
  • Capital Appreciation: Expected increase in the value of the property.
  • Income Returns: Expected annual income as a percentage of the investment.

Cash Flow from Operations

This part is about understanding how much cash the hotel can generate from operations.
  • Room Revenues: Expected income from room bookings.
  • Additional Revenue Streams: Income from restaurants, event spaces, spas, etc.
  • Seasonal Fluctuations: How revenue is expected to vary throughout the year.
  • Staff Salaries: Cost of hiring and maintaining staff.
  • Utilities and Maintenance: Ongoing costs for utilities like electricity, water, and general maintenance.
  • Marketing and Sales: Budget for continued marketing and sales activities.
  • Supplies and Inventory: Costs of maintaining an inventory of necessary supplies like food, toiletries, etc.
  • Monthly Cash Flow: Projected cash flows for the first year.
  • Annual Cash Flow: Projections for subsequent years.
  • Break-even Analysis: When the hotel is expected to cover all costs and start making a profit.
Understanding these elements will allow you to assess the financial viability of your hotel project, informing whether it's wise to proceed with the investment. It also prepares you for various scenarios, helping you build a resilient business model.

Aligning Stakeholders

Aligning stakeholders is a critical and often complex part of investing in a hotel. This step ensures everyone is on the same page, reducing potential conflicts and facilitating a smoother development and operational process. It starts by identifying the stakeholders and involving them in the vision for the hotel. You have to show each stakeholder how they benefit from a new hotel at the destination. Here are a few ideas on how to align all stakeholders.
  • List All Stakeholders: Investors, board members, local authorities, community representatives, potential employees, and suppliers.
  • Define Roles and Interests: Clearly outline each stakeholder's role and what they have to gain or lose from the project.
  • Initial Briefings: Hold informational meetings to present the overall concept, financials, and potential benefits.
  • Regular Updates: Keep stakeholders updated regularly to build trust and transparency.
  • Two-way Communication: Allow stakeholders to voice concerns, ask questions, and offer suggestions.
  • Vision Statement: Develop a clear and compelling vision statement that aligns with the interests of most stakeholders.
  • Collaborative Workshops: Use workshops to collaboratively explore ideas, resolve conflicts, and build a shared vision.
  • Community Outreach: Conduct sessions to understand and address community concerns and expectations.
  • Sustainability Plans: Share how the project will be environmentally sustainable, addressing concerns necessary to local authorities and the community.
By aligning all stakeholders, you not only pave the way for smoother implementation but also gain valuable insights that can enrich the project as a whole. This alignment can ultimately be a critical factor in the success of your hotel investment.

Concept Development

Developing a concept is a pivotal step before investing in a hotel. It is the blueprint for your hotel's design, service, amenities, and other vital elements. Injecting creativity into the development process can give your hotel a unique edge and help distinguish it from competitors. Here's what you should consider and how to add a creative touch to each step.

Research and Ideation

  • Location Context: Take into consideration the unique aspects of the location, whether it’s urban, rural, near a beach, etc.
  • Trends and Innovations: Consider global and local trends, such as sustainability or technology integration, that could make your concept more appealing.
  • Idea Jams: Hold brainstorming sessions with people from diverse backgrounds to generate fresh perspectives.
  • Experience Immersion: For fresh insights, team members immerse themselves in various hospitality experiences, even those outside the hotel industry.
  • Storytelling: Develop a compelling narrative or story for your hotel. This could be historical, fictional, or thematic. The story will guide the architecture, interior design, and guest experience. This will set the hotel apart from competitors.
  • Multi-sensory Experience: Design the hotel to engage all senses, incorporating unique sounds, smells, and textures.
  • Technology Elevates the Experience: Will you employ smart rooms, mobile check-in, or other technology to enhance the guest experience?
  • Green Tech: Use advanced technology like rainwater harvesting and solar power to be sustainable and educate guests about it.
  • Local Sourcing: Consider sourcing food and materials locally to support the community and reduce your carbon footprint.
  • Crowdsourced Features: Open up certain aspects of the concept for crowdsourcing ideas and run a public competition for specific design elements.
  • Feedback Loop: Collect feedback from the focus groups, pilot tests, and stakeholders to refine your concept.
  • Iterations: Be prepared to go back to the drawing board to make revisions until the concept aligns with financial feasibility, target market needs, and stakeholder expectations.
  • Documentation: Prepare a comprehensive document detailing all aspects of the concept for presentation to stakeholders for final approval.
  • Interactive Document: Instead of a traditional presentation, create an interactive digital platform where stakeholders can explore the concept non-linearly.
The concept serves as the cornerstone of your hotel project. A well-thought-out and researched concept will attract guests and guide your team in creating a cohesive and compelling experience.

Final thoughts

Adding a layer of creativity to the development process allows you to turn your hotel into a place to stay and a destination. The goal is to make every aspect of the guest's experience memorable, shareable, and uniquely tied to your hotel's offerings. No more plain, boring, and generic hotels.